Arkansas Supreme Court Holds Auto Dealerships Liable for Sales Tax on Employee Vehicles

• Arkansas Supreme Court found auto dealerships liable for sales tax when providing vehicles for employees’ use
• Auto dealerships allowed employees and their families to use vehicles with dealer license tags
• Arkansas Department of Finance and Administration audited dealerships and found vehicles were subject to sales tax
• Circuit court initially reversed assessments, but Supreme Court of Arkansas reversed decision
• Court focused on Arkansas Code Section 26-52-322, which subjects tangible personal property withdrawn from stock to sales tax
• Court found vehicles were used and therefore subject to tax, rejecting dealerships’ argument
• Dissent focused on intent of legislature and argued tax does not come due until there is a sale

Source: jdsupra.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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