Page 20 - ATR 1 2013

“The legislaTioN proTecTs The small busiNess owNer by eNsuriNg his
sales Tax exempTioN oN equipmeNT remaiNs while shifTiNg The burdeN
To Those compaNies ThaT operaTe iN oTher sTaTes.”

—laNe Kidd,
presideNT, arKaNsas TrucKiNg associaTioN

million per year in 2003, but this mea- other states offer—so the board voted to “The legislation protects the small
sure proposed a full exemption, costing defend it on its merits.” business owner by ensuring his sales tax
another $4 million per year from the Kidd said the organization main- exemption on equipment remains while
Arkansas Highway and Transportation tained a position, however, that the shifting the burden to those companies
Department’s (AHTD) administra- exemption should be paid for in other that operate in other states,” said Kidd.
tive budget. Legislators passed the sales ways. So he met with AHTD officials Kidd also thinks that once the sales
tax exemption but decided rather than to work on a legislative package that tax exemption on equipment is assured,
approve the diesel tax increase they will make the department financially some of the major fleets headquartered
referred it to a statewide referendum. whole, protect the small trucking com- in Arkansas may decide to start register-
However, when results from a panies in Arkansas that benefit from ing new equipment in their home state.
statewide public opinion survey by the exemption, but could also fill an “If we can bring our largest Arkansas
Governor Mike Beebe’s (D-Ark.) poll- industry need: A partnership with trucking companies home, we can see
ster showed overwhelming opposition to AHTD to ensure the improved safety of thousands of trucks and semitrailers
a diesel tax, Beebe decided not to place commercial trucks operating on state bearing an Arkansas license and that
it on the ballot. Beebe further indicated highways. Secondly, the partnership will reap a nice public relations benefit
that since there would be no diesel tax could also provide the trucking industry to the state.
increase, legislators should repeal the and highway officials with new ways to “But convincing those companies
sales tax exemption that had been part work together on research and funding to register in Arkansas will require the
of the package ATA supported. The ATA for the state’s infrastructure and other state provides the same level of custom-
Board of Directors voted to support the programs to improve highway safety. er service that states like Indiana and a
repeal if the legislature requested it. “The first thing that Arkansas handful of others are doing to encour-
But in the fiscal session of the trucking company owners should age registrations there,” said Kidd.
Arkansas General Assembly that fol- know is we are going to protect their
lowed in January 2012, Beebe failed to sales tax exemption on new and used oWNEr-opEraTorS
persuade enough senators to repeal the trucks and semitrailers,” said Kidd. Designed to protect the status of
exemption. The sales tax exemption In exchange for keeping the sales tax owner-operators and the carriers that
took effect in June 2012 and the ATA exemption that helps small trucking enter into lease agreements with them,
Board of Directors subsequently voted companies, Kidd said the legislation ATA supports legislation that will offer
to defend the exemption against any will propose that trucking companies owner-operators the same workers’
further attempts to repeal it. operating in interstate commerce pay a compensation insurance its employees
“There’s never been a question that 15 percent increase in their apportioned enjoy, without jeopardizing the driver’s
we were willing to support the sales registration fee they pay under the independent status.
tax exemption’s repeal up to a point,” International Registration Plan (IRP). In turn, trucking companies will
explained Lane Kidd, ATA president. Kidd said that trucking companies be protected from having the state
“After the exemption became law, registered in other states and pay an arbitrarily grant injury claims filed by
though, the benefits began accruing apportioned fee to Arkansas for mileage owner-operators if they have refused
to small trucking companies by saving generated through the state will also
them on purchases—the same as 38 pay a slightly higher fee. 

20 arKanSaS truCKing report | issue 1 2013