The House on Wednesday voted to exempt from used cars up to $7,500 from state sales tax.
House Bill 1342 by Rep. John Payton, R-Wilburn, proposes increasing the threshold for levying sales and use tax on the sale of automobiles in Arkansas.
Under current law, vehicles sold for less than $4,000 are exempt from sales tax, and HB1342 would increase that to $7,500.
Payton said the bill, which passed 84-1, would provide some relief to working families that need reliable transportation. The tax cut would reduce state revenue by about $12.6 million and lower revenue to cities and counties by about $700,000, according to the Department of Finance and Administration.
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The bill recoups some revenue by removing a current sales tax exemption for new trailers purchased for less than $4,000, extending the benefit only to used trailers.
The legislation now heads to the Senate for consideration.
-- Hunter Field