006.05.97 Ark. Code R. § 004 - Gross Receipts Regulation - GR-12 Used Motor Vehicles Registered by Vehicle Dealers

This regulation is necessary in order to properly implement and administer Act 998 of 1997 which becomes effective on August 1, 1997, and to administer Ark. Code Ann. § 26-52-510(f).

Arkansas Gross Receipts Regulation GR-12 is amended to add a new section to read as follows:

G. USED MOTOR VEHICLES REGISTERED BY VEHICLE DEALERS
1. Act 998 of 1997 prohibits used motor vehicle dealers from assigning a motor vehicle using the Manufacturer's Statement of Origin (MSO). Used vehicle dealers are required to apply for title and registration to the vehicle before it may be transferred.
2. Ark. Code Ann. § 26-52-510(f) permits any motor vehicle dealer who has purchased a used motor vehicle for resale to register the vehicle for the sole purpose of obtaining a certificate of title to the vehicle without payment of gross receipts tax. No license plate is issued with this registration and the vehicle may not be operated upon the highway without a dealer's plate.
3. A used motor vehicle dealer may apply for title and registration to a vehicle which is assigned to the dealer on the vehicle's MSO without payment of gross receipts tax provided that § 26-52-510(f) otherwise applies to the transaction.
4. "Used motor vehicle" is defined as any motor vehicle which has previously been sold, bargained, exchanged, given away or the title thereto transferred from the person or corporation who first took title from the manufacturer, importer, dealer, or agent of the manufacturer or importer, or that is so used as to have become which is commonly known as a secondhand or previously owned motor vehicle. In the event of a transfer reflected on the statement of origin (MSO) from the original franchise dealer to any other dealer, individual, or corporation other than a franchise dealer of the same make of vehicle, the vehicle shall be considered a used motor vehicle.

FINDING OF IMMINENT PERIL AND STATEMENT OF REASONS

During the 81st General Assembly, the Arkansas Legislature passed Act 998 of 1997 prohibiting used motor vehicle dealers from assigning a motor vehicle using the Manufacturer's Statement of Origin (MSO). The law states that used vehicle dealers are required to apply for title and registration to the vehicle before it may be transferred. Arkansas law typically requires that gross receipts or use tax be paid when a motor vehicle is titled or registered in this state. Ark. Code Ann. § 26-52-510(f) permits any motor vehicle dealer who has purchased a used motor vehicle for resale to register the vehicle for the sole purpose of obtaining a certificate of title to the vehicle without payment of gross receipts tax.

Without this regulation, there will be confusion among car dealers attempting to comply with Act 998 because they will be unsure whether sales tax is due on the motor vehicles in question. This regulation is needed to prevent confusion over the application of this Act to transactions where motor vehicles are obtained by a used car dealer with an MSO. The provisions of this regulation will become effective on August 1, 1997.

Notes

006.05.97 Ark. Code R. § 004
7/24/1997

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