Sales Tax on Used Tractors and Cars in Arkansas: What You Need to Know

The majority of US states, including Arkansas, levy a sales tax on the acquisition of goods and services, including the purchase of motor vehicles like tractors and cars. In Arkansas, the sales tax rate varies from county to county, however it often falls between 6.5% and 13.5%. But it raises the question of whether used cars or tractors in Arkansas are subject to sales tax. The solution is complex and depends on a number of variables. Previously Owned Tractors Used tractors are regarded as farm machinery and equipment in Arkansas. If farm machinery and equipment is utilized only for agricultural purposes, they are exempt from sales tax, according to the Arkansas Department of Finance and Administration. Therefore, you might not be required to pay sales tax if you purchase a used tractor and intend to use it just for farming or agricultural activities. However, you might need to pay sales tax if you want to use the tractor for non-agricultural activities like building or transportation. Used Automobiles

On the other hand, used cars are subject to sales tax in Arkansas. You must pay sales tax based on the vehicle’s purchase price whether you are purchasing a new or used car. To the contrary, if you trade in your old car when buying a new or used one, the trade-in value will be subtracted from the purchase price, and sales tax will be computed based on the balance. Resale Certificate as well as Business License A resale certificate, which enables you to buy products for resale without paying sales tax, may be required of you if you own a business in Arkansas. You must apply to the Arkansas Department of Finance and Administration for a resale certificate and present documentation of your business registration and tax identification number.

You must also acquire an Arkansas business license in order to conduct business there. On the Secretary of State website for Arkansas, you can submit an online application for a business license. You must include information about your company’s name, address, industry, and ownership structure as part of the application procedure. Exemption from taxes

Nonprofit organizations, places of worship, and governmental entities are among the groups that can receive tax exemptions in Arkansas. You must submit an application for tax exemption along with verification of your organization’s eligibility to the Arkansas Department of Finance and Administration.

In conclusion, a number of elements, such as the usage of the vehicle and whether you are a business owner or a tax-exempt organization, determine whether you must pay sales tax on a used tractor or car in Arkansas. It is advised that you speak with a tax expert or the Arkansas Department of Finance and Administration if you are unsure of your tax obligations.