006.05.212-GR-12.1. SALES TAX CREDIT FOR PRIVATE SALE OF A USED VEHICLE:
AR ADC 006.05.212-GR-12.1Arkansas Administrative Code
Ark. Admin. Code 006.05.212-GR-12.1
006.05.212-GR-12.1. SALES TAX CREDIT FOR PRIVATE SALE OF A USED VEHICLE:
3. “Sale” means the transfer of title to a used vehicle by a consumer (the seller) to another individual or business enterprise (the buyer) in exchange for cash or the equivalent of cash, such as a check or money order. A sale does not occur, and therefore no credit will be allowed, when the title to a damaged vehicle is transferred by a consumer to an insurance company in exchange for a cash settlement paid by the insurance company.
3. If the vehicle purchased by the consumer costs less than the proceeds received from the vehicle sold by the consumer in lieu of a trade-in, the consumer shall pay no sales tax on his or her newly purchased vehicle. However, the credit shall not exceed the price paid by the consumer for the newly purchased vehicle.
a. If the vehicle sold by the consumer in lieu of a trade-in is sold prior to the time the consumer registers and pays sales tax on his or her newly purchased vehicle, a bill of sale for the vehicle sold must be submitted to the Revenue Office at the time the newly purchased vehicle is registered. The bill of sale must be signed by both the consumer and the purchaser. The bill of sale must include name and address of purchaser and seller, vehicle description and VIN, sales price, and date of sale. (A Bill of Sale form and instructions can be found on the DFA website in the Motor Vehicle Section.) Failure to provide a bill of sale will result in the disallowance of the deduction.
b. If the vehicle sold by the consumer in lieu of a trade-in is sold after the consumer has already registered and paid sales tax on his or her newly purchased vehicle, a Refund Claim form, a copy of the newly purchased vehicle's registration certificate, and a copy of the bill of sale for the vehicle sold must be submitted by the consumer to the Department's Tax Credits and Special Refunds Section at the following address:
Arkansas Department of Finance and Administration
Revenue Division
Tax Credits and Special Refunds Section
P.O. Box 8054
Little Rock, AR 72203-8054
E. MULTIPLE SALES. If the consumer sells more than one vehicle within the forty-five (45) day periods prior to or after purchasing a vehicle, the consumer shall be entitled to claim all of the sales as sales “in lieu of a trade-in” for sales tax credit. However, the cumulative credit shall not exceed the price paid by the consumer for his or her newly purchased vehicle and shall not be carried forward and applied to the purchase of additional vehicles.
F. TRADE-IN. Consumers who make a trade-in on the purchase of a vehicle may also take a sales tax credit against the purchase price for any used vehicles sold by the consumer within forty-five (45) days either prior to or after the purchase. Any such credit shall be limited to the cash proceeds received by the consumer and shall in no event exceed the balance paid by the consumer for his or her newly purchased vehicle after receiving credit for the vehicle traded in.
1. Sale of used vehicle prior to new vehicle order: If a special order for a new vehicle is placed with a dealer after the used vehicle is sold and the customer is contractually bound to purchase the new vehicle when it is delivered, then the forty-five (45) day period is calculated using the date of sale of the old vehicle and the date when the purchaser was contractually obligated to purchase the new vehicle.
2. Sale of used vehicle after new vehicle order: If a used vehicle is sold after placing a special order for a new vehicle and the new vehicle is not delivered until after forty-five (45) days from the sale of the used vehicle, then the forty-five (45) day deadline is met if the sale of the used vehicle occurs within forty-five (45) days of placing a binding order for a new vehicle.
Credits
AUTHORITY: Ark. Code Ann. § 26-52-510
Current with amendments received through May 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.212-GR-12.1, AR ADC 006.05.212-GR-12.1
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