1. (a)

   1. (1) In addition to the state and local sales and use tax, there is a long-term rental vehicle tax at the rate of one and one-half percent (1 1/2%) of the gross receipts or gross proceeds derived from the long-term rental of motor vehicles required to be licensed.
   2. (2) The tax is applicable only if sales or use tax was not paid on the vehicle at the time of registration.
   3. (3) This section should be read in conjunction with 26 CAR §§ 30-702 and 30-1002.

2. (b) The long-term rental tax does not apply to gross receipts from the long-term lease of the following:

   1. (1) A diesel truck rented or leased for commercial shipping;
   2. (2) Farm machinery or farm equipment leased for a commercial purpose;
   3. (3) A gasoline-powered or diesel-powered truck rented or leased for residential moving or shipping; or

   4. (4)

      1. (A) Special mobile equipment or other motor vehicles not required to be licensed, trailers, and semitrailers.
      2. (B) If, however, a motor vehicle is leased on a long-term basis with a trailer or semitrailer, then the long-term rental tax applies to the total consideration for the lease of the motor vehicle and trailer or semitrailer unless the consideration for the lease of the motor vehicle is separately stated from the consideration for the lease of the trailer or semitrailer.

3. (c) International Registration Plan.

   1. (1) The gross receipts derived from the long-term lease of a commercial truck or trailer in Arkansas is exempt from the long-term rental tax if the vehicle:

      1. (A) Will be used solely and exclusively for the transportation of goods in interstate commerce; and
      2. (B) Has been registered under the International Registration Plan in another state.
   2. (2) “International Registration Plan” means the International Registration Plan, Inc., the Uniform Vehicle Registration Proration and Reciprocity Agreement, or any other registration plan that provides for the apportionment of a commercial vehicle’s registration fee in a manner consistent with Arkansas Code § 27-14-501 et seq.

4. (d)

   1. (1) Whether a rental of a motor vehicle is considered long-term or short-term is dependent on the written contract and period for which payment is initially due.
   2. (2) If a vehicle is rented initially for fourteen (14) days with the rental contract reflecting a term of rental for fourteen (14) days and the customer subsequently decides to continue renting the vehicle for twenty-one (21) more days, the transaction is treated as two (2) short-term rentals, not one (1) long-term rental.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-63-304"