26-63-302. Rental vehicle tax.

26-63-302. Rental vehicle tax. (a)(1)(A) In addition to the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., there is levied a rental vehicle tax. (B) The rental vehicle tax is levied on the gross receipts or gross proceeds derived from the rental of a motor vehicle required to be licensed that is leased for a period of less than thirty (30) days. (C) The gross receipts or gross proceeds derived from a rental described in subdivision (a)(1)(B) of this section is taxable whether or not the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., was paid at the time of registration. (2) The gross receipts or gross proceeds derived from the sale of a motor vehicle to a person engaged in the business of renting a motor vehicle required to be licensed is exempt from taxation under the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any municipal or county sales taxes if the motor vehicle is used exclusively for the purpose of rentals for periods of less than thirty (30) days. (b)(1) In addition to the rate in subsection (c) of this section, the rental vehicle tax is levied at the rate of five percent (5%) and the rate of any applicable municipal or county taxes. (2) Except as provided otherwise in this section, the rental vehicle tax shall be collected, reported, and paid in the same manner and at the same time as prescribed by this chapter. (3)(A) The rental vehicle tax shall be remitted to the Secretary of the Department of Finance and Administration and, except for the amount equal to any municipal or county taxes, shall be deposited into the State Treasury as general revenues. (B) The amount of the rental vehicle tax which is based on the municipal and county sales taxes shall be remitted to the city or county in the same manner as for municipal and county sales taxes. (c)(1) There is also imposed an additional rental vehicle tax at the rate of five percent (5%) on the gross receipts or gross proceeds derived from the rental of a motor vehicle required to be licensed that is leased for a period of less than thirty (30) days. (2)(A)(i) The additional rental vehicle tax shall be remitted to the secretary, who shall deposit seventy-five percent (75%) of the net revenues derived from the additional rental vehicle tax into the Arkansas Public Transit Trust Fund. (ii) The moneys in the fund resulting from a deposit described in subdivision (c)(2)(A)(i) of this section shall be used by the Arkansas Department of Transportation for the purpose of acquiring federal matching funds for the purchase of public transportation vehicles, for public transit equipment or facilities, and for the operation of the Federal Transit Administration assistance programs. (B) The remaining twenty-five percent (25%) of the revenues shall be deposited into the Division of Elementary and Secondary Education Public School Fund Account to be used exclusively for teacher salaries. (d) Both the rental vehicle tax and the additional rental vehicle tax levied by this section do not apply to the lease or rental of: (1) A diesel truck leased or rented for commercial shipping; (2) Farm machinery or farm equipment leased or rented for a commercial purpose; and (3) A gasoline-powered or diesel-powered truck leased or rented for residential moving or shipping.