Revenue & Taxation- House
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Bills discussed (13)
| Bill | Title | Sponsor | Status |
|---|---|---|---|
|
HB1190
· 5 mentions in chapter, transcript, agenda
Matched: “HB1190 Ray TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO PROVIDE…”
|
TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO PROVIDE A COST-OF-LIVING ADJUSTMENT FOR THE … | Ray | Died in House Committee at Sine Die Adjournment |
|
HB1023
Act 873
· 3 mentions in chapter, transcript, agenda
Matched: “HB1023 Lowery TO AMEND THE SALES TAX LAWS CONCERNING SPECIAL EVENT…”
|
TO AMEND THE SALES TAX LAWS CONCERNING SPECIAL EVENTS; AND TO EXCLUDE CERTAIN SCHOOL FUNDRAISERS … | Lowery | Notification that HB1023 is now Act 873 |
|
HB1030
· 2 mentions in chapter, agenda
Matched: “HB1030 Jett TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE…”
|
TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE WHOLESALE SALES TAXES ON MOTOR FUEL AND … | Jett | WITHDRAWN BY AUTHOR |
|
HB1034
Act 732
· 2 mentions in chapter, agenda
Matched: “HB1034 Jett TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE…”
|
TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE DISCLOSURE OF TAXPAYER INFORMATION; AND TO … | Beaty Jr. | Notification that HB1034 is now Act 732 |
|
HB1035
· 2 mentions in chapter, agenda
Matched: “HB1035 Jett TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE.”
|
TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE. | Beaty Jr. | Recommended for study in the Interim by Joint … |
|
HB1038
· 2 mentions in chapter, agenda
Matched: “HB1038 Jett TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED…”
|
TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED AND REMITTED ON DELIVERY CHARGES … | Jett | WITHDRAWN BY AUTHOR |
|
HB1043
Act 719
· 2 mentions in chapter, agenda
Matched: “HB1043 Jett TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON…”
|
TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS; AND TO … | McClure | Notification that HB1043 is now Act 719 |
|
HB1044
· 2 mentions in chapter, agenda
Matched: “HB1044 Jett TO AUTHORIZE THE ESTIMATED ASSESSMENT OF TAX IF A TAXP…”
|
TO AUTHORIZE THE ESTIMATED ASSESSMENT OF TAX IF A TAXPAYER FAILS OR REFUSES TO PROVIDE … | Jett | Died in House at Sine Die Adjournment |
|
HB1046
· 2 mentions in chapter, agenda
Matched: “HB1046 Jett TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRET…”
|
TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRETARY OF THE DEPARTMENT OF FINANCE … | Jett | WITHDRAWN BY AUTHOR |
|
HB1047
· 2 mentions in chapter, agenda
Matched: “HB1047 Jett TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST…”
|
TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST ON BEHALF OF A TAXPAYER … | Jett | WITHDRAWN BY AUTHOR |
|
HB1048
Act 718
· 2 mentions in chapter, agenda
Matched: “HB1048 Jett TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX D…”
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TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX DELINQUENCY WHEN A FINAL … | Milligan | Notification that HB1048 is now Act 718 |
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HB1049
Act 283
· 2 mentions in agenda, chapter
Matched: “…DELINQUENCY WHEN A FINAL ASSESSMENT OF TAX HAS BEEN ISSUED. HB1049 Jett TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEM…”
|
TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEMPLOYMENT COMPENSATION BENEFITS AND UNEMPLOYMENT INSURANCE … | Jett | Notification that HB1049 is now Act 283 |
|
HB1065
· 1 mention in agenda
Matched: “AGENDA (Revised 2/1/21 at 3:22 pm) Moved HB1065 from Regular Agenda to Referred Items List House Committee…”
|
TO EXEMPT FEMININE HYGIENE PRODUCTS FROM SALES AND USE TAX. | Pilkington | Died in House Committee at Sine Die Adjournment |
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We're going to start our meeting today. Just a reminder that we'll not be taking a motion on these bills, but Representative Ray and Representative Lowry wanted to present the bills. And with that, Representative Ray, you ready to go, sir? I'm sorry? Oh, I'm sorry, members. It's House Bill 1190. House Bill 1190. representative ray if you don't care sir uh tell us who you are and you're good to go
Representative David Ray
Unverified
0:33
representative david ray house district 40. thank you mr chairman and members of the committee for allowing me to present house bill 1190 today it certainly takes a little bit of pressure off running your first bill in committee when you know that it's not going to be voted down on the spot so but thank you for this opportunity the house bill 1190 would index arkansas standard deduction to inflation it's a very simple bill it's just two pages actually a page and a quarter but there's
three primary reasons why we should index our standard deduction to inflation the first of the first reason primarily is that inflation acts as sort of a stealth tax increase because it increases the proportion of a taxpayer's income that is subject to taxation even if that taxpayer doesn't see an increase in earnings. Policy analysts and economists will sometimes refer to this as bracket
creep. You may have heard that phrase before. So by failing to index our tax measures for inflation, we'll have unintended and unlegislated tax increases as a result of that. The second reason that we should index our standard deduction to inflation is that indexing is widely accepted as a best practice, both in state and federal taxation. If you look at the standard deduction
at the federal level, it's already indexed to inflation. And likewise, our individual income tax brackets in Arkansas are indexed to inflation. Arkansas is actually one of only 10 states in the country that doesn't already index our standard deduction to inflation. You'll see in the bill, we use CPI as the measure to index. The reason for that is because it's consistent with the measure that we use both for our income tax brackets and the personal exemption. So this
just standardizes that across our tax code. And the third primary reason why this would be a good bill is because it's broad-based. A lot of the bills that you'll be asked to consider are bills that sort of single out one group or another maybe one industry or another for preferential tax treatment dfna estimates that in arkansas approximately 630 000 taxpayers take the standard
deduction and we have to remember that of those 630 000 a very large chunk of those are in the middle and low income brackets so i view this bill as being very consistent with the guidelines that the governor's laid out in terms of income tax relief that is aimed primarily at middle and lower income tax brackets and it has the added benefit of not just providing tax relief but it
also actually reforms our tax structure in a way that is sound tax policy so just to recap you know three reasons inflation acts as a stealth tax increase if you don't account for it indexing is widely accepted best practice for both federal and state taxation and improving our standard deduction would be a broad-based change that would affect over 600 000 arkansans and i'll close before I take any questions by saying you know this may seem sort of theoretical but if we were
to enter a period of increased inflation like we saw in the 1970s this is an issue that could become very practical very quickly for many Arkansans. So with that I appreciate you allowing me to present this bill today. I hope you'll keep it in mind as we move forward in the session and I'll be happy to take any questions. Thank you, sir. Representative
Wooten, do you have a question, sir? So
Representative Jim Wooten
Unverified
5:01
what we're doing here is really getting it in line with the indexing of the income brackets
relative to the, we're just applying this, what's already been in use in the income tax. Yes, we already index our
Representative David Ray
Unverified
5:18
individual income tax brackets to inflation. So this just carries
Representative Jim Wooten
Unverified
5:23
it forward to the standard deduction. That's right. And
Representative David Ray
Unverified
5:26
that's particularly important because we have, of all the states in the country that have a standard deduction, Arkansas is actually the second lowest in the country.
Only Iowa has a lower standard deduction than we do. Thank you, Mr. Chairman. Thank you, sir. Members, any other questions?
DFA, you want to give us your thoughts? Paul Gehring, Arkansas DFA.
Speaker 18
6:08
DFA. DFA did provide a fiscal impact statement for House Bill 1190. As Representative Ray indicated, this would impact approximately 630,000 taxpayers. We would anticipate, based on the past six years of inflation adjustments, this would result in the standard deduction of $2,200 being increased to $2,230. The annual revenue impact to state general revenues would be $900,000.
DFA would be happy to answer any questions from the committee. Paul, I'm assuming
if this was to pass, then on the forecast, Dr. Shelnut would probably forecast this back into the budget, I'm assuming? That would be correct, Mr. Chair. On the front
Speaker 22
7:01
end, right? That's correct. Okay. You have a question, Representative East? Thank you, Mr. Chair. So this would be the standard deduction. How do we handle dependence in
Speaker 23
7:07
this issue? Would it affect that at all? Do they still get the same
Speaker 18
7:12
whatever tax credit they get now? This would apply to the taxpayer individual deduction. So it would be
$2,200 currently for one taxpayer. Married taxpayers would have the benefit of the $4,400 if they are married filing joint, but this would only impact the standard deduction that a taxpayer takes. How do we handle dependents in Arkansas as far as the tax code goes? Is
Speaker 23
7:30
there a tax credit of a certain amount? I believe that is correct, but I just don't have that information in front of
Speaker 18
7:38
me. Just get it to me later if you don't care. I'd be happy to get that information to you. Thanks.
Members, any other questions? Thank you, Paul. Appreciate it. Thank you. Representative Ray, you want
Representative David Ray
Unverified
7:59
to close for your bill, sir? Thank you, Mr. Chairman and members of the committee for your time. I know there's not going to be a motion today, and I hope to be able to bring this bill back to you later in session when we have a clearer picture of what's ahead, and I just appreciate your thoughtful consideration today.
Thank you. Thank you. Just on a personal note, I like your bill.
I think it's a good bill. Thank you, sir. President Lowry, you ready to go, sir?
Yes, sir. Members, this is going to be House Bill 1023. Do you have
anybody? You going to bring somebody up now, sir? Rob, why don't you come first? Representative Lowry, you guys get ready to go. Just introduce yourself, and you're good to go. Thank
Speaker 30
8:45
you, Mr. Chair. You're welcome. And I am ready to go as long as I don't have to run a race.
this this uh boot is slowing me down considerably well i've got
20 bucks as i can beat
Speaker 30
8:55
you in a foot race i think you can i think i'll bet on you members um and mr chair thank you so much for the opportunity to come for you and make this presentation let me give you a little bit of background i uh have a charter school in maumel It's actually the first charter school that existed in the state of Arkansas, was first formed as Academics Plus.
Okay, it just had Academics Plus. It's now known as Maumelle Charter School. And I think this occurred maybe probably about three years ago. I got a call from the president of the PTO at Maumelle, and they were going to be conducting an event. Basically, it was like a carnival. And the gentleman called me and he said the lady that was actually operating it and putting it together, putting together sponsorships on it,
she was in tears because someone from DFA had come and told her that if you don't get all the paperwork in so that we can collect a tax from you on this, we're going to shut you down. We're not going to allow you to open. And the reason that they were so upset is that they know that they're a public school and that they know that exemptions like this already extend to public schools. But in us researching it, I'm working with the Arkansas Public School Resource Center,
and Mr. Brecht will provide some more testimony on this. We looked at it, and apparently there was an interpretation issue, and several of us also met with DFA, and it was that, and I'll let him explain better what this was, but that it seemed to only apply to a school district that had a tax number or had a status of being able to set a millage, to be a collection.
Charter schools don't have millages, and so there was this distinction, even though they are a public school. And so I'm going to, with your permission, I'm going to allow the superintendent of the Maumelle Charter School, Mr. McGill, to just give you a little bit of background on how this has impacted them, and then I'll have Mr. Brecht actually get into the specifics of what we're doing with the legislation. Absolutely. Mr. McGill, if you
don't care, recognize yourself, sir, for the record.
Speaker 33
11:39
Rob McGill, CEO of Academics Plus Charter Schools. We operate schools in Maumelle, Maumelle Charter School, and also Scott Charter School. I've been in education, traditional school districts, for my first 18 years of my career, and then the last 10 at the charter school. And this is the first time I've ever heard of an event that has been taxed. It was definitely a surprise to us when two days prior to the event, we get a phone call.
I didn't get the phone call, but the PTO got the phone call. Basically, volunteers, you're going to have to shut down because you haven't done the proper paperwork for this event. And we had no idea what they were talking about, figured it out, and they did allow us to go forward with the event. but it was a traumatic experience for my PTO treasurer, the main one. A young lady who's doing that had no idea of what she was getting into. But, you know, it just surprised me that,
and I thought there was no way that this is the truth because, like you said, been in 28 years, never had we paid taxes for an event that we had had before, but come to find out, we did. So we ended up paying on the $12,000 to $13,000 we received for the event, we paid $1,200 in taxes. And then the next year, of course, that was two years ago. It was actually the year prior to the legislative session.
And then last year, we again paid another $1,200, $1,300 for the second year. So, you know, our PTOs are doing exactly what traditional school districts do. They're out there trying to raise money for the students, whether it's equipment for the classroom, such as like the last few things that their PTOs purchased are computers for the classroom. Prior to that, they bought playground equipment. And then, you know, just they provide money for the teachers to buy additional classroom supplies.
So it's just it's the same type of organization, same type of function. but I don't understand why charter schools would be taxed. Traditional schools should not be taxed on it. I think that all schools should be exempt from that tax. So that's kind of where we're at and how we got here. Thanks, sir. Just taking on a personal note, I think my wife's cousin
actually works for your school. Ripson, Larry, have somebody else you want to discuss with that? Yes.
Robert Breck
Unverified
14:22
Please recognize yourself, sir. Thank you, Mr. Chair. Robert Breck, General Counsel for Arkansas Public School Resource Center. When this came to our attention that they were being asked to pay tax on the event, I did look into it. You have to get really, really technical with the rules to make this determination. There's actually a section in DF&A's sales tax rules that PTAs and PTOs are specifically exempt from fundraising activities.
I would have thought that would be sufficient, but they said, no, this is different because this is a special event. If you go to the special events section, it talks about charitable organizations are also exempt. Well, the PTO is a 501c3. They say in their rules, if you are a 501c3, you're presumed to be a charitable organization. But then they refer you to Section 39c of the rules, which then that refers you to Section 37e6 of the rules.
And so you finally get to the definition of a charitable organization that is actually in a section dealing with sales to hospitals and sanitariums. That's where you have to go to try to find this out. Obviously, it was our feeling that they are a charitable organization, that they did meet the rules. So we did ask for an official opinion from the tax division, and that's when they came up. And it was basically hinged on that they were not a charitable organization.
I disagree with that, but that's their determination. And so this bill is really meant to rectify that situation and ensure that they don't have to go through this. Just to give you an idea of what they do have to go through, once they determine they're going to have the special event, they have to sign up. They're given packets. Apparently, this is right out of the rule. They're given packets to give to each vendor. Each vendor has to keep up with their sales. They have to put in an envelope a check for the sales tax that comes from each vendor in the special event.
So I just asked Rob about this. they would have 5th graders selling cookies. The 5th graders selling cookies would have to keep up with their sales. Somebody would have to write a check, put it in an envelope, and then the promoter of the event, which I assume is the PTO, would have to gather all of these envelopes up and pay all those receipts to DF&A. So that's what they have to go through just to have an event to raise money for the school.
But it really comes down to whether or not your interpretation or what your view of your laws are, should a PTO be a charitable organization or not. Their determination is they are not. I'd take any questions that you might
have. Thank you, Robert. Appreciate it. Members, do you have any questions? Representative McClury, you recognize her? I want to make
Representative Rick McClure
Unverified
17:33
sure I understand this correctly. So they say that you're not a charitable organization.
That is the determination, yes, sir. Do you know of other private schools, ball teams, boys and girls clubs that have received any designation that says they're not a charitable organization? You'd have to ask them, but
Robert Breck
Unverified
17:55
I believe boys and girls clubs are specifically exempted. But PTAs and PTOs are also specifically exempted in one portion of their rules, but they say that doesn't apply to a special event. But there is a general exemption in their rules, dealing with PTOs, saying that they are exempt from sales tax.
But for purposes of a special event, apparently they are not a charitable organization, although they are a 501c3, and all of the proceeds went to the school. Thank you. Members, any other questions? Mr.
Gardner, you recognize, ma'am? Thank you. I just have one quick
Representative Denise Garner
Unverified
18:35
question. We're not talking about private schools. We're talking about public charter schools, right? This would be
Speaker 41
18:40
a public charter, any public school, a district. It wouldn't matter if they were a school district or a public charter school.
Representative Denise Garner
Unverified
18:46
Right, but this has nothing to do with private. Okay, thank you. President
Representative Jim Wooten
Unverified
18:53
Wooten, you recognize, sir? Mr. Chairman, you're going to have DFA over. I will. All right,
thank you, sir. President Lowry, you got anything you
Speaker 30
19:02
want to add to that, sir? Well, I think the example that Mr. Breck gave is a good one. You hear the, I'm sure some of you, when you heard the term vendor, it's like, well, that just makes sense. If you have a vendor, if you have a barbecue truck or whatever, in this case,
vendors are a fifth-grade class where the parents have baked cookies and have packaged them, and they're selling them to raise money for the PTO, for the school. you know it it seems I know if you look at the bill it looks like there's a whole lot of new language and there is but really this this particular exemption is not one that is not already granted in in some way to public schools what we've had to do is go in with language that
clearly states that this is something that is to extend to open charters a charter school should have the same benefit. And it is a fairness and an equity issue. I know DFA will probably have some background to tell you why they feel like there's such a significant, I think, $300,000 fiscal impact. But I'll just let you hear from them. And then I guess in closing, maybe Mr. Breck
will be able to give some better clarity on whether that is a figure that is, we were just talking about the charter schools. That's really all we're adding. There's only about 30 charter schools. So if you're talking about $1,200 in events at the largest, one of the largest charter schools in the state, you're really talking about less than $45,000 fiscal impact as opposed to $300,000. but there may be some other elements that they are looking at.
Paul, you come up, and I know it's going to be a hard job for DFA to
come up and explain this, please. And I guess my first question, Paul, is there a work around this solution without changing code to accommodate
these folks that you know of, DFA knows of, without
Speaker 18
21:28
actually having to change code to fix this for these folks? Thank you, Mr. Chair. Paul Gehring, Arkansas DFA. I would like to address the question that was posed by many members of the committee concerning the fundraising activities of charitable organizations in Arkansas.
So we have an exemption that exists in the code that provides that a charitable organization may engage in sales of tangible personal property at fundraising events, but they cannot compete with for-profit businesses. and how you do not compete with a for-profit business is that the charitable organization members of the organization must conduct the activity. All the proceeds from the charitable
sales of the tangible personal property must benefit the charitable organization, and you can only perform that charitable activity no more than three times per year. Now, the code does not provide a definition. Hold that thought for a second, Paul.
So is that for everybody, public schools too? They're going to do it three times a year
Speaker 18
22:35
for everybody? Under that particular exemption, yes. Okay, I'm sorry, go ahead, sir. Sure, thank you. But also, the code does not provide a definition of a charitable organization. But we do have a promulgated rule as to what constitutes a charitable organization.
For purposes of this exemption that is provided in the code, a charitable organization must have some type of benevolent or charitable or patriotic purpose, and the function of the organization must be a function that the government would be required to perform if the charitable organization did not perform that function. So, for example, the classic functions that would be required of the government to perform was providing the essential necessities of life for those individuals that were unable to provide for.
So if a child needs food, clothing, health care, things of that nature, those are things that generally are accepted that the government would provide to that individual in the event that that organization was not there to provide that and perform that exact same function. So we do get a number of opinion letters throughout the year from organizations that are nonprofit organizations that want to perform these charitable fundraising activities, but they have a challenge when it comes to meeting that definition that's provided in DFA's rulemaking for a charitable organization.
So, I mean, we have countless opinion letters that talk about and having to meet that specific test. So when this particular request came through for a PTA or a PTO, it's entirely possible that an organization might be able to meet that charitable purpose or charitable function test as long as they were doing something to help or fill in the void where the government would have to provide that need. So there are a lot of nonprofits that do a lot of
great things, but if it doesn't have that, meet that second part of the test to provide a function that the government would have to provide in absence of the charitable organization, they can't meet that definition. Revisor Wooten, you
Representative Jim Wooten
Unverified
25:05
have a question, sir? Thank you, Mr. Chairman.
I have several left for me. Mr. Gehring, you used the word estimate in the impact statement here.
How many applications do you get a year from public schools, from parent-teacher organizations? From parent-teacher organizations, there are not
Senator Lance Eads
Unverified
25:24
a tremendous amount of requests that we receive.
Speaker 18
25:29
How many? I would be happy to look and see how many opinion requests we receive for a PTA or a PTO. How much money do they pay each year? What we have in our fiscal impact statement, we have... No, no, no. That's not going to fly.
Representative Jim Wooten
Unverified
25:49
You say estimated based on $350,000. When you use the word estimate, you don't know for sure. You don't know for
sure how much money you're missing, do you? That's correct, and the reason for that is... Okay, let me ask you another question. How many school districts are in the state of Arkansas? According to the excise tax, 1,046. Sir, there is not.
There is not 1,046 school districts in this state.
There are about 300. There are maybe 1,046 individual schools, but there's not 1,046 districts.
Speaker 18
26:34
Well, I'd be happy to go back, Representative Wooten, and
Representative Jim Wooten
Unverified
26:39
see if it was the actual number of schools. There's approximately 340-odd districts in the state. And you're saying that you think you're missing $350,000 a year for a fifth-grade class, for an elementary school, to have a carnival, and they're going to have to do all that paperwork?
Speaker 18
27:06
This is an estimate that is a range of between $135,000 and $350,000. there isn't a tremendous amount of data because currently these purchases by the PTA and the PTO or a similar organization, that tax would be collected from the retailer that is selling either the goods or the services. And when the retailer reports those sales to DFA on their excise tax report, they do not break down by customer of who is purchasing the good or the service. Mr. Chairman, if I
Representative Jim Wooten
Unverified
27:40
mind, I submit to you. Mr. Gary, how much is our budget a year? How much is our revenue throughout the whole state? Federal, state, tax, everything? Six billion? I would have to get the exact number from
Speaker 52
27:54
our budget folks, Representative Wooten. Our Dr. Shelnut is also present here. I'd be happy to get that figure from Dr. Shelnut.
Dr. Shelnut, if you don't
Representative Richard McGrew
Unverified
28:23
care, so recognize yourself. John Shelnut, DFA. Thank you, sir. I think your question involved both federal and state, but I have the state general revenue number in front of me, and for FY21, the current fiscal year, the prediction is $5.687 billion. Mr. Schellinger, tell me
Representative Jim Wooten
Unverified
28:49
how much money we have, this outstanding debt that's owed to
the state of Arkansas. I don't have that number with me. I can tell you, it's $333 million,
and we're out here bugging the schools, the parent-teachers, and the organizations for money, for sales tax money. Mr. Chairman, I submit that's ridiculous. Thank you, sir. Thank you, Mr. Wooten.
Representative Hawks, do you have a question, sir? Yes,
Speaker 65
29:24
and I may be mistaken, but on the statement that the government would have to come in and provide this if it was not necessary,
and I could be wrong, is it not mandated in the Arkansas Constitution that the state government provide education to students? That
Speaker 18
29:48
would have to do that anyway. Oh, I agree. Yes, and it goes for purposes of the exemption, it applies to the organization that is providing the service. So the PTA is providing an organization, a support organization, but I'm not sure that the PTA is providing the education that the school is providing.
Speaker 65
30:08
But they're enabling, follow up? Would you not say that they're helping enable the education, that if they weren't there, that that would hinder the education of the
Speaker 18
30:19
students? I think that there's certainly an argument to be made, but I'm not sure the PTA is actually conducting the education of the students. Okay, thank you. Representative Heves.
Speaker 23
30:33
Thank you. This may be a little bit off topic, but you may can refresh my memory, Paul. Last session, I believe Senator Dismang ran a bill that dealt with a similar issue as related to concession stands.
Would that be in any way related to this, or did that just specifically deal with, I guess, recreational events or sporting events? Because we kind of had
Speaker 18
30:54
the same exact problem with that, right? Yeah, that's correct, Representative Eades. I do recall that bill that Senator Dismank sponsored in the last session. My recollection was that it was for concession sales at an athletic event or a recreational event. I'd be happy to provide a copy of that bill in the fiscal impact. No, that's okay.
Speaker 23
31:14
My thought was from the presentation that it sounded like they were selling the same kind of things, candy, cookies, I mean, I guess they buy them at Sam's and turn around and sell them, but that seems to be the same issue. I guess what I'm saying is last time we had to solve that issue with legislation, are we going to have to solve this issue with legislation as well? Because I understand that DF&A has to go by what we pass, and then you make your own rules. So is this something that we need a legislative fix for?
Speaker 18
31:43
like we did last time well and certainly i believe that that is a very similar bill to
this particular bill but the scope of that bill was much more narrow okay thank you president lynch you recognize sir
you have a question that's my question i
Speaker 71
31:58
remember that bill from last time and i didn't think you were taxing the concession yeah use your microphone sir
Representative Roger D. Lynch
Unverified
32:07
i had thought we had quit taxing the sales at concession stands at school events so uh yeah as and we had so yeah i got a film we're gonna clean this up same same question representative
Representative Rick McClure
Unverified
32:20
eve said thank you sir represent mcclure yes this is a little bit of follow-up to representative wooten's question Being a rookie, please help me in just a little bit. Where can I find an itemized line
Senator Lance Eads
Unverified
32:39
number of how many taxes were paid by PTAs
Speaker 18
32:44
and PTOs? I don't believe that we would have a line number, Representative, because when a PTA or a PTO purchases items of tangible personal property or services from a vendor,
vendor, the vendor will, in aggregate, report on their monthly sales and use tax report their total sales that were subject to sales tax. So we would not have specific data as to what a PTA or a PTO has paid in the past to
Representative Rick McClure
Unverified
33:13
a vendor. Okay. Let me, I'm sorry, let me clarify. What I'm looking for is how much sales tax has PTAs and PTOs collected from their sales and turned into DFA?
Senator Lance Eads
Unverified
33:28
I don't believe that we would have a figure on that because according to
Speaker 18
33:32
our sales tax rules, a PTA purchases items from a vendor for resale. And then when they sell the item, they do not collect tax on the resale. Okay. One more follow-up? Yes, sir. Members, you don't have
to ask for five minutes. We're just, I'm good to roll. You're on the line
Representative Rick McClure
Unverified
33:53
of questions, you keep hammering. Then please walk me through this revenue impact because you don't have a number that I understand that you say that they paid,
Speaker 18
34:07
a revenue loss. Okay. And because what this bill specifically does are two things. These are for sales to a PTA or a PTO, not sales by a PTA or a PTO, and this also exempts a fundraising event that would be conducted that would ordinarily be considered a special event, and it's currently under our law. a special event requires that the special event promoter that's going to allow vendors to be
come and make sales at the special event we have to make sure the law has to make sure that the promoter that the vendors that are at that special event collect and remit sales tax on their sales so if a for example if a PTA or a PTO were to have a special event and they were going to have private vendors come in and do food sales or merchandise sales at their special event that are not members of the that are not PTA or PTO those special event vendors are still going
to continue to have to collect and remit sales tax on those sales but those are going to be treated differently under this bill because the the PTA and the PTO would be exempted out
Speaker 75
35:26
of the special event requirement. Okay, I think I
Representative Rick McClure
Unverified
35:30
understand, but if I understand correctly, then we have thousands upon thousands of fundraisers in the state that are
Senator Lance Eads
Unverified
35:39
not in compliance. That's there. I couldn't speak to the
Speaker 18
35:42
thousands and thousands figure represented, but certainly
there are taxpayers that aren't aware of their obligation to comply with the special event law, but also right now we, as mentioned in our sales tax rules, we have the ability for a PTA to buy items and pay sales tax when they buy those items and then resell them and not have to collect sales tax on the resale. Thank you. Representative McGrew, you have a question,
Representative Richard McGrew
Unverified
36:15
sir? It's really just kind of a follow-up is to, because as vendors, we're talking about parents
that base cookies. So how would we track that? But moving on from that, definition of special events. So is there a definition of that in the code that qualifies this as a special event or what decides whether it's
Speaker 18
36:39
a special event or not? That is in 2652-518. It's not in the definition section of the bill.
But there is a definition of special event as well as special event promoter within the code, 2652-518. Members, any other questions?
Thank you, Paul. Appreciate it. Thank you, Mr. Chair. Mr. Larry, you want to close for your
Speaker 30
37:16
bill, sir? Yes, thank you, Mr. Chairman. several things come to mind as i've been hearing the testimony and i think back on the work that
i've done with the maumelle charter school uh they are certainly a charitable organization i mean you talk about some of the outreach that they've done and i know i've worked with mr mcgill our rotary club does an event at the maumelle charter school and and though a lot of it is pushed by the Maumelle Rotary Club, the main people involved are students at Maumelle Charter of boxing up canned goods at Christmas and handing out turkeys and other food items
and in some years toys to needy kids that have not been identified in all of the local public schools. The other public schools, Oak Grove, Pine Forest, Crystal Hill. And those kids work for four or five hours boxing up those goods. That's certainly a charitable function. But the other thing I would point out about the actual special event that Maumelle Charter runs and where we've run into this issue is that the parents that are baking these cookies,
they're having to buy or maybe they are reselling, but they have paid a sales tax. They don't have a sales tax exemption as a parent group. The sixth grade class at Maumelle Charter does not have a tax exemption if they go to Sam's and they buy cookies or they buy some product that they then resell or they make part of a raffle or whatever they do. Sometimes the vendor activity that they do may be a ring toss game.
Well, you know, where is the tax issue there? And then the other element of special event is that sometimes you do have vendors that are Popeyes, I think, that has a store there in Maumelle. They will set up, but they have to collect and remit sales tax on all the food that they sell. So there's tax being received coming and going.
The real concern here is cutting into what the PTOs are doing. I think Representative Hawk's point was very well made. You know, we have compulsory education requirement. These PTOs supplant, excuse me, they supplement that. Sometimes if they didn't have this money, teachers or the school would be having to pay for copy paper or having to pay for markers or pay for what are all the other things.
And if they didn't, it would come out of the budget of the charter school. So in that capacity, they are a charitable organization. They're giving back to their school. So thank you so much for the time that you've given me, and I appreciate all the positive comments we've gotten and hope that we will be able to fix this for the kids. Thank you, sir, for bringing this to us. And
I'll just tell you, if I'm not mistaken, or reading the mood of this committee, I think this committee wants to fix this. And I just bet I'll be guaranteed by the end of the session, you guys just stay patient with us.
We'll get this thing fixed. Thank you, Mr. Chairman. Thank you, members. All right, members. I think that our other guy was the other presenter. I think he's in the next room. I think he's doing some stand-your-ground build or something like that is what I'm told. I think the game plan here is right now we're going to meet – we talked about doing the syrup tax, but we're still working on some issues behind the scenes on that, on the syrup taxes. We're trying to find a dedicated revenue stream for that.
That's an ongoing discussion, so we're going to pull that back from Thursday. I told you guys we might be able to run that bill Thursday, but it looks like now we're not. But right now we're going to take a look at running maybe House Bill 1361. That's Representative Eve's bill, and that deals with the PPP program. We're going to meet with DFA here shortly. Anybody want to stick around to share what DFA has to say in an informal discussion? You're more than welcome to stick around and listen to this. But we're trying to get our hands wrapped around this PPP issue and the costs associated with it and the expenses of it.
So if it all works out, we might be running that bill Thursday. So you might want to do your homework on the 1361, and we'll come back around. Another thing on the unemployment tax, I know the Senate's going to crank up that Senate Bill 261, I believe what it is. As Senator Dismanian, my bill, it's to tax-exempt the unemployment. And I think they're going to run that tomorrow in committee. So we should have that back down on our end next Tuesday. And that's something we need to get out ASAP because these folks are starting to get 1099s,
and we need to get that cleaned up as soon as possible. Anybody have any questions? Representative Borton, you got anything to add, sir? OK. With that, members, we're adjourned.
Agenda
REGULAR AGENDA Number Sponsor Subtitle
HB1023 Lowery TO AMEND THE SALES TAX LAWS CONCERNING SPECIAL EVENTS; AND TO EXCLUDE CERTAIN SCHOOL FUNDRAISERS FROM THE SALES TAX LAWS REGULATING SPECIAL EVENTS.
HB1190 Ray TO AMEND THE INDIVIDUAL INCOME TAX LAWS; AND TO PROVIDE A COST-OF- LIVING ADJUSTMENT FOR THE STANDARD DEDUCTION.
DEFERRED BILLS Number Sponsor Subtitle
HB1030 Jett TO PREVENT UNEXPECTED REDUCTIONS IN REVENUES FROM THE WHOLESALE SALES TAXES ON MOTOR FUEL AND DISTILLATE SPECIAL FUEL BY AMENDING THE LAW CONCERNING THE CALCULATION OF THE WHOLESALE SALES TAXES.
HB1034 Jett TO AMEND THE EXCEPTIONS TO THE PROHIBITION AGAINST THE DISCLOSURE OF TAXPAYER INFORMATION; AND TO DESIGNATE THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION AS THE OFFICIAL CUSTODIAN OF CERTAIN RECORDS.
HB1035 Jett TO ADOPT RECENT CHANGES TO THE INTERNAL REVENUE CODE.
HB1038 Jett TO CLARIFY THAT SALES TAX IS REQUIRED TO BE COLLECTED AND REMITTED ON DELIVERY CHARGES FOR SALES BY A MARKETPLACE FACILITATOR.
HB1043 Jett TO AUTHORIZE THE WAIVER OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS; AND TO CREATE A STATUTE OF LIMITATIONS ON THE COLLECTION OF CERTAIN AD VALOREM TAXES ON UTILITIES AND CARRIERS.
HB1044 Jett TO AUTHORIZE THE ESTIMATED ASSESSMENT OF TAX IF A TAXPAYER FAILS OR REFUSES TO PROVIDE RECORDS.
HB1046 Jett TO CLARIFY THE ABILITY OF LEGAL COUNSEL FOR THE SECRETARY OF THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO REQUEST REVISION OF A HEARING OFFICER'S DECISION.
HB1047 Jett TO CLARIFY THAT A TAXPAYER'S AGENT MAY FILE A PROTEST ON BEHALF OF A TAXPAYER IF THE TAXPAYER PRODUCES A PROPERLY EXECUTED POWER OF ATTORNEY AT THE TIME OF THE FILING
.
HB1048 Jett TO AUTHORIZE THE OFFSET OF A TAX REFUND TOWARD A TAX DELINQUENCY WHEN A FINAL ASSESSMENT OF TAX HAS BEEN ISSUED.
HB1049 Jett TO ALLOW THE WITHHOLDING OF STATE INCOME TAX FROM UNEMPLOYMENT COMPENSATION BENEFITS AND UNEMPLOYMENT INSURANCE BENEFITS.
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — REVENUE & TAXATION- HOUSE, Feb 2, 2021 | Agenda | 2 | Official source ↗ |
Speakers
Representative Joe Jett Chair
Unverified
Representative David Ray
Unverified
Representative Jim Wooten
Unverified
Speaker 18
Speaker 22
Speaker 23
Speaker 30
Speaker 33
Robert Breck
Unverified
Representative Rick McClure
Unverified
Representative Denise Garner
Unverified
Speaker 41
Senator Lance Eads
Unverified
Speaker 52
Representative Richard McGrew
Unverified
Speaker 65
Speaker 66
Speaker 71
Representative Roger D. Lynch
Unverified
Speaker 75