AR HB1966

Allows consumers to claim a sales tax deduction when a used motor vehicle, trailer, or semitrailer is sold to an insurance company as part of a settlement agreement rather than traded in, if a new or used vehicle of greater value is purchased within 45 days.

Tax is calculated on the net difference between the total purchase price of the new vehicle and the amount received from the insurance settlement, rather than on the full purchase price.

Requires consumers claiming the deduction to provide either a signed bill of sale or an insurance settlement agreement showing the total consideration paid at the time of vehicle registration.

Denies the deduction and requires full tax payment on the total purchase price if the consumer fails to provide the required documentation.

Effective date is the first day of the calendar quarter following the enactment of the bill.