Opinion No.

The Honorable Ray Kidd State Representative 3718 Highway 463 Jonesboro, Arkansas 72404-9612

Dear Representative Kidd:

I am writing in response to your request for my opinion on the following question:

If an individual purchases a new vehicle, out-of-state, with a $6,000.00 rebate applied to the purchase; can the State of Arkansas require the individual to pay sales tax on the entire amount (price before rebate) if the state of purchase only taxes the actual purchase price after rebate.

RESPONSE

I must respectfully decline to answer this question. Your request merely seeks my advisory opinion on a general issue of state tax law. The Department of Finance and Administration, Revenue Division, is the appropriate authority to issue letter opinions on such questions. See Gross Receipts Tax Regulations GR-75 and -76 ("No opinion, whether formal or informal, issued by any other agency can be binding on the Department of Finance and Administration, Revenue Division."). I therefore suggest that you submit your question to the following office:

Revenue Division Arkansas Department of Finance and Administration P.O. Box 1272 Little Rock, AR 72203

I feel confident that the Revenue Division of DFA will provide a full and prompt response to your questions.

Without presuming to anticipate the Revenue Division's response to your request, I will point out that GR-12 contains the following provision:

B. CALCULATION OF TAX DUE

* * *

c. The term "Gross Receipts" or "Gross Proceeds" means the total amount of consideration for the sale of the motor vehicle or trailer, whether the consideration is in money or otherwise and including any manufacturer's or dealer's rebates and federal luxury excise tax, without any deduction therefor on account of the cost of property sold, labor service, interest paid by the retailer, losses or any expenses whatsoever. Federal manufacturer's excise taxes are not a part of the "Gross Receipts" or "Gross Proceeds" if the excise taxes are separately stated or separately billed to the consumer. The term "Gross Receipts" or "Gross Proceeds" includes the value of any property taken in lieu of or in addition to money as consideration for a sale.

(Emphasis added).

Assistant Attorney General Jack Druff prepared the foregoing opinion, which I hereby approve.

Sincerely,

MIKE BEEBE Attorney General

MB/JHD:cyh