Revenue & Taxation- House

The latest sale of an item at a special event that's all it does so let's see what is an isolated sale that turned a little bit misleading I'm I'm not so latest sale is a sale of something that's not sold from an inventory that was intended for sale it's not sold by a person who sells items in that category what an isolated sale this is this it's a cell between two individuals. Now I'm gonna use example. I am hobby aside restore old cars I have a lot of all car parts all right you can come to my house and if you want to get a. Rally will for sixty eight Camaro I could sell you that there would be no taxes charge that is an isolated sale that's what it is now what this bill looks to do is to say that if I'm not a special event like the paging bounds what may which draws a lot of people into it if you were to buy that permit that's what made I would have to charge you sales tax. So what this bill attempts to do is to eliminate our allow isolated sales and special events now. Number to be quick about this girl you guys have a lot here the today so. If you take an isolated sale. And that's what makes so let's talk about what happens I think we all would agree that the more people that we can bring into the slot meets the more the better it is now this bill does not affect vendors at these meets like if there's a person there that's sales Camaro parts then they would pay sales tax their vendor that's not an isolated sale the person who sells a six dollar corn dogs that's not an isolated sale that that that that would charge someone who would actually make something some kind of custom piece for a vehicle that's. Not an isolated sale it's just the sale that could have occurred the day before outside of that special event with nonsense activity perfect the judgment and not have the sales tax that's all the stuff sold really. Why is that important all right. I can tell you that I've been on the mountain that's what made several times in an and the the conversations that you have up there are people come up and they'll see that part for that Camaro over there or something and they'll say this guy knows come in they'll start questioning me talking to me about maybe they're doing a project or why they're gonna do and so on so forth so that's ninety nine ninety eight percent of of what I do what you talk about it there is that type of discussion hi the other thing that happens is you'll see people to come up and I'll occasion take a car up there and you know I this is really not for sale I'm just showing it kind of showing it off and go look at that car and that type of thing. But the important thing is is why we should look at this is this the people who come to these events I would argue and say that they come because of the hobbyists like myself lots of hobbies today it's people they can talk to while they're there do they buy the six dollar corn dog sure they did they possibly buy something from the the vendor that is tax or maybe this customized part type thing sure sure thank you very will do that so I would argue that. The hobbyist are the ones that that you want they're they're the ones that bring the crowd and guess what our neighboring states know that all right in in. And I have to apologize because I might get the state wrong here but one of our neighboring states allows hobbies to sales two thousand dollars with the parts tax rate there's another state that says if you go to a special event you can sell two hundred fifty dollars with the parts without that so there's all different but Arkansas already has in the statute a great tool it's the isolated sale it's of well defined in statute is exactly what an isolated sale is and so if we use that already in statute all this thing will do is allow that is special event so what's the costs associated with that definitely says that it's about two hundred and seventy thousand dollars annually if you consider all of the special events this is not just car swap meets guys these are both shows this could be I think Benton it has a big of model training It gets. Only the hobby is that are there the isolated cells would be exempt so that would bring them in Ark are as I said earlier the states around us have there have recognizes and they don't that now. These events attract people from out of state on paging now there's are a lot that at that may there are a lot of people from out of state there well we need to entice them to come to Arkansas think of the tourism dollars that they bring with them when I can Arkansas plus the fact like I said they very well could be buying parts from those those vendors that that around or some with that. I think I'll take any questions thank sure you quit Krishnadas you're recognized her. Thank you thank you for that thank you mention thought about something man and set you that in that in case that already with the isolated sale it sounds like it's it's a you start by the singles the sale of a single item somewhere that's actually in statute it is to find the F. and I has it is defined as exactly what that is what is not one of things I mention was it's is to be an isolated sale you can you cannot be an item that sold out of an inventory so in other words if you're a mentoring items for sale in your songs that that's not an isolated sale there's a there's a lot of different things but it's very well defined easy to understand so we should in my opinion we should use that statute that's already there that was actually recommendation D. F. and I did to use that statue that's already there. In the. Thank you Sir general questions. Richey garni recognized yeah I just wanted to ask if there is no limit on this one though there's no financial limited just any isolated sale so they can so as a hobby as you might have five thousand dollars worth of. You you you could I what is your ride on the high side so there's but there's some things remembers that sell could occur the day before it's two hundred seventy five thousand dollars for all of the special events that occur in Arkansas in the year there's not a lot of this I would argue with you that I think definitely I don't know if there's someone here that would well that will be at but I think they would they would argue I think that would probably agree with you now it's a hard tax to collect right if they think about hard it would be to quantify this you know there's a a guy used to work with the said you know on some items you know the juice is just not worth the squeeze in this might be one of those force I think it it actually hurts as I want I want to bring those tourist dollars in serving my district and and into our state I think this is a great what we can do that. Thanks for the question. Full. Mr off. Thank you Mr chairman read let me see if I understand this completly. If the. I cleaned out my garage because pams had her way with me and I fell off my truck with all my treasures. And taken to Petty genes Salem is that then they would be exempt of tax. Except as is yes because the one time because I'm not taking to a. What. The other possibility there's she might not determine those treasures as not being but that's another story yeah someone that we clean out there there's no and take up there yes okay thanks. Regionalists recognizer. I just can't imagine that much that taxes being collected anyway. Hi you know. Again the day after the special event the the the item can be sold legally without any taxes on the. You've got to play markets for entertainment not ever saw sales tax collected so okay I think maybe this makes the right as law abiding citizens more law abiding if we. Thank you. General questions. If you wanna. Thank you Paul. Good afternoon thank you Mr chair members of the committee Paul guarantee of thank. D. if they did prepare a fiscal impact statement for house bill ten fifty four with the projected effective date of being October one of twenty one that result in eight months of reduced tax collections on the state side of a hundred and eighty thousand dollars in state sales tax for a full fiscal year collections we projected the lost revenue for state sales tax would be two hundred and seventy thousand dollars with that would be happy to answer any questions about the revenue impact. Would. Paul again. Hello. Hello to come up with the impact statement. Search two hundred seventy thousand dollars. I mean was it being handled now owes people getting sales tax permits. But thank you represent Wooten as indicated in the fiscal impact statement the excise tax section they utilized in the system statistical data that is kept within our heirs tax system for special event promoters that are registered with us to collect tax. So this revenue impact is based upon reported information that we have from Within our tax system. How many do you have. The No. We we can get that number of how many special event providers are in our system that a registered click Tax you have to provide that to the committee. Thank you thank you Mr thank you. Resume questions. Thank you Paul. Any anybody Nigel speak against the bill thanks for the bill. Regular clothes we will. Well of and as I said I I think if it in some of the members have said here I think it's a hard tax to really capture because of this way it is transaction is actually occur I do think it's a good thing for Arkansas to getting out for tourism dollars and you know let us be events in like I said our artists of our surrounding states have adopted policies that of contract people away from our bench and we certainly don't want that thank you Sir thank you the research common I think you got a good bill strongly the we talk about a little bit later session okay thank you thank you Committee thank you. All right members I think represent Bentley's waiting on Amendment house bill fourteen forty three one skipped out reserve brownie you're ready to go on your your bill now I think there's a amendment for your bill correct yes there is. Stachel pass out amendment for your bill first and I want to buy just amendment will start ma'am you don't care. Thanks to president ram V. okay recognize yourself ma'am you're gonna sit next to you and feel free to sit on your amendment. Thank you very much representative Carolyn brown District forty one and I have with me Mister grant Wallace and I'll let him introduce himself great Wallace chief deputy treasurer for treasure Milligan. You for for the proceed now thank you today colleagues I'm presenting House Bill fifteen oh nine which is that that concerning the Arkansas tax deferred Division tuition savings program. basically this bill incorporates. MM just real quick you know we're talking about the members of the bill the Amendment use me it was just some language it was a typo basically. You remember your bill correct yes Sir. We have a motion any debate on favor. Okay see what your bill amount thank you okay we're talking about the of what's typically called the I. five to nine plan it's education savings plan and the bill basically incorporates the changes to the federal tax code that Arkansas needs to a. Incorporate to be in line with our federal tax code that's that's most of the bill but the other portion of the bill that is is not that is the title change in we we want to To add change the title of the of the plan to the Arkansas brighter future plan and their their reasons for that the child to go through quickly the Arkansas brighter future plan can be used to say four accredited postsecondary education including college university trade or vocational school K. through twelve education at a private or parochial school and with this update we're adding apprenticeship programs and the ability to pay on your existing student loan debt. contributions to the plan can be made by virtually anyone that a contributions grow tax deferred and withdrawals are tax free for qualified education expenses additionally Arkansas allows a state tax deduction of up to five thousand dollars for an individual or ten thousand for couples each year on the state taxes I am really proud to bring the bill in twenty seventeen to make Arkansas one of only seven states that allow employers to include the plan as part of their employee benefits package where in employers can provide a state tax deductible match of up to five hundred dollars for each employee who has opened an account. As of February twenty twenty one Arkansas our Kansans have funded forty six thousand three hundred and seventy accounts with six hundred and eight of those receiving employer matching dollars as of today there is over one point one billion dollars in the are in the Five to nine plan now we began our Arkansas five to nine plans in nineteen ninety nine but as of twenty fifteen we have doubled our The money that's in there so we went. From what is it five hundred million to one to over one billion in just a few years and I'm I think that's exciting and and the reason that these plants are so important is that to children with college savings plans were any. Post secondary education the. Even if they have savings of as little as five hundred dollars if it's savings of just five hundred dollars they're twenty five percent more likely to enroll in post secondary education and sixty four percent more likely to graduate from the child that does not have a savings plan so With that I'd like to ask Mister Wallace if there's anything he would like to contribute to this discussion. Miss Wallace it just appreciate this chamber in and deal with work that the legislature of stunned with the treasurer's office over the past six years to really be able to impact that doubling and we're now seeing more Arkansans being able to fund their college in post secondary education than ever before so we are really setting a great foundation for the future of our state in the in the children in our state we are sincerely appreciate that and the work that you all done with us over the last six years thank you Sir members of a neglected say will go this does have fiscal impacts will be held on this bill as well with the objections Jenny questions members. Anybody else will speak against the bill I studied I need a question. We have a we give you questions don't. He won't speak against the bill for the bill DFAT or same thing about this the fiscal impact. Because yesterday. Thank you Mr chair Paul hearing members of the committee debated issue of a record revenue impact for house bill to fifteen oh nine the FY twenty one fiscal impact was twenty eight thousand six hundred sixty dollars be happy to answer any questions. Usually questions. Thank you Paul thank you Mr welcome Russian Braniewo close rebuild them I'm close to thank you very much and once again thank you got a good bill and will be put in the mix and see how this thing plays out towards in the session okay okay I think we can afford twenty eight the thanks no problem thank you ma'am. The chairman of the budget said. Version Bentley did you have your moment the members showed up yet now. If not we still represent value ago. Members will take a look at house bill fifteen forty three and and this bill will be open for a. The with the approval of the committee so we can let this out the north committee was due. Thank you thank you Mr chair is it okay if I invited guests at the table absolutely. Sure. Thank you Mr chair and members of the committee I'm standard call your the director of assessment coordination division of DFA. It will remember back about four years ago is it okay if I remove this Mister chair yes ma'am thank you about two thousand seventeen I think that's what we decided there was a. Increase on chicken house taxes that made everybody a level playing ground but first time it was a gigantic leap and for others it was not such gigantically I think there was some that was paid in well below what they would have been paying and others playing way higher into get it even the assessment coordination and decided to make it all the same all the way across the state and less than that am I explaining that correctly. suck my guess was the tax assessor at the time by the way just so you'll notice that she went through this so our assessors went through a whole lot of turmoil when this happened because they thought the assessor's themselves actually raise the taxes on them What happened though was we had some assessors who had not kept up with the times and so and that's mine they had this gigantic leap. I think a lot of people understood FOR I stood on that because I felt like a lot of farmers went without a voice at the table it wasn't anything that we actually been hired and so we wrote this bill or my new friend here help me write this bill amends lands they help me about this bill and so we can start getting reports yearly report sports that say how much taxes collected in each division if they've not done something in ten years then it would tell us what it's going to go up to be they will not be S. raising taxes but it be them informing us about what's going on and I'll let you add or take away I hope I didn't mess up anything. Thank you I just want to say to all the members that I am so grateful to represent a Vaught for allowing my team and it made to help with this we are so excited about the process that we think this will lead to not only will it allow us as of the Division to keep all of you informed about things that need to be addressed or changed but I think it's also can be a wonderful tool to let you know just what's happening in property tax on the county level for the schools and what a great job sisters are due and I work really really hard with a lot of a grief sometimes and not a lot of bragging so we are really excited about this I'm grateful to her and I'll take any questions if you have any questions. Mr revision would. Yes. What what what are we talking about. Kamarck. Commercial property residential property and personal property. All of it yes Sir it would it would be all it was all ready legislation in the Senate over five years we had during the recess yes Sir there is re appraisals that are required by Act eleven eighty five of nineteen ninety nine but this would just be an annual report to all of you about what has transpired what the values are showing a break break it down by county by category so that you will have that information. Well are you saying that the sensors have not been doing what they're supposed to do no. No Sir it's not and not three appraisals that those are or what we have rules that we audit those and we know that they are but there are certain species of property that ever so often because they're not all you know very calm it's not like of the grocery store that's you know out everybody has so there are certain species of property that sometimes do get overlooked for several years and the right to do not get brought up to the the standards I should be as you know for inflation and building cost and that kind of thing so those would be the ones that we would make sure that you have a special part of that report that let you know that we've identified that property and that this was what we thank the plan should be for us to correct it. Mr. Give me an example well we thought about checking them the poultry houses is a great example of that though the rates weren't the that a lot of the assessors were using that we're still using rights from nineteen ninety five and and so at the time assessment coordination attempted to bring them up to what the cost is you know and and so it was just because it had been so long it It call some shockwaves. I understand that because I remember the ninety nine fiasco when we are whenever we started re doing some amount of property when at seven hundred percent mind paying taxes will limit I'm not real clear what we're saying about the failure of the assessors what if we're checking the house is not a part of that re appraisal law and program. Yes Sir they were but however ACT had not updated the rates that we had given the assessors to use. And so if you're familiar than was to actually wasn't here that well being well we did have we had assessors who took the initiative and I actually went out and did their own cost analysis and set rates that they thought were fair for their County not every assessor was using the old right. So you all didn't update the rights to give to this answers to use as a model of what you're going to have. We had not done it since nineteen ninety five the Division had not done it yes. That's amazing thank you very much thank you Mr chairman look for review million recognized yeah the house is doing this to keep an eye on the toes or we don't have any surprises yes yes Sir okay. Person doing. Kind of follow what Bridget Miller Milligan said what we're doing this is mainly to rope report and inform. To this committee and not that we're going to be a session because we're not a session correct we're going to get a rope report and informed of what shall be done on a annual basis is that right yes Sir okay thank you in all those lines this segment who whom well as long as and almost put the words in the sponsors math but I think she's going to dress the lands for this bill gets to the Senate is that correct ma'am adcenter stand that we need to do some non codified showing representative Jane that it's not as that will be raising taxes this is just for report only and if we need to non codified that that's what I'm willing to do. Just so the constituents won't think that it's as raising taxes. You or someone. The What what are you all to have you corrected yes I reckon that how you're gonna handle that hence forth it forward I mean. Yes Sir we are actually in the process right now of going back through every thing that we have to see if there is any other of the types of property that we need to address of for the most part everything is up to date it is just if but with there is so many types of property in the state that we are currently reviewing that follow up one quick user you not answer to quit okay is that okay our user market values to work off of yes Sir we're mandated by the constitution market value thank you thank you Mr. Welcome Sir. General questions. Permanent. So what type of property are excluded from being assessed and. Required pay livestock. Had to be assisted this bill really doesn't address that so I'm not quite sure how we would answer that since this isn't what's in the bill I don't know so this is real property. Well the report would cover all property that is subject to taxation. Second subject this tax that. The house is this okay. The sale. Yes the center I'm assuming that this bill was to pass you want to tell all the sensors seventy five counties that the General Assembly is not responsible for property taxes that correct yes are there going to be mad at me. That's my job. If we if we have to change something that they have to go to their taxpayers and tell them that their change and then it will come through me yeah well I tell you what just tell everybody just give landings telephone number and tell everybody to call. Members in the questions. Anybody else will speak against the bill. For the bill. I'm sorry. Resemble your clothes reveal now yes Sir and I can I can put in here and non codified language if we can go ahead and pass it out today because I know we're on a tight time frame and I don't have anymore time shall meet if I could go ahead and get it moving I will get with you And representative Jane and we can get some non codified that says that the legislature is not responsible for assessing are county taxes. Members your motion. I have a motion to pass spending of eight members. All in favor say aye. Opposed. Relish number thank you Committee and thank you Mr chair you're welcome ma'am. will represent Bentley left I thank you and take a vote we're not everyone should have a much longer wait I think with that members I take the. Over the weekend I sent out Jennifer Tuesday the basement a couple bills or on Tuesday send those out but I don't have those one of bills not filed yet to have a number yet but we'll get it filed in Bali rentals twos instrument tax fairness