1. (a) If a motor vehicle is damaged or destroyed, a consumer shall be entitled to a sales tax credit equal to the amount of state and local sales or use tax paid at registration if:

   1. (1) The vehicle is damaged or destroyed within one hundred eighty (180) days of registering the vehicle in Arkansas and paying Arkansas sales or use tax;
   2. (2) The damage is caused by a catastrophic event resulting from a natural cause; and
   3. (3) As a result of the catastrophic event, the value of the motor vehicle is reduced to less than thirty percent (30%) of its retail value based upon the NADA Official Price Guide or other approved publication.

2. (b)

   1. (1) The vehicle owner must file a written request for credit with the Tax Credits and Special Refunds Section of the Revenue Division of the Department of Finance and Administration and establish his or her entitlement to the credit.
   2. (2) The claim must be filed within one (1) year of registration of the damaged vehicle.
3. (c) If the vehicle owner traded in a vehicle on the purchase of the vehicle that is subsequently damaged or destroyed, the vehicle owner is also entitled to an additional credit for the traded-in vehicle equal to the value of the traded-in vehicle and shall be treated as a trade-in for purposes of computing tax due on another vehicle.
4. (d) The credits are valid for six (6) months from the date of issuance and shall be applicable only on the purchase of another motor vehicle by the consumer to whom the credits were issued.

5. (e)

   1. (1) “Natural cause” means an act occasioned exclusively by the violence of nature where all human agency is excluded from creating or entering into the cause of the damage or injury.

   2. (2) Examples include:

      1. (A) Tornadoes;
      2. (B) Earthquakes;
      3. (C) Floods;
      4. (D) Tsunamis;
      5. (E) Volcanic eruptions; and
      6. (F) Hurricanes.

Codification Notes: “NADA” means National Automobile Dealers Association. This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-52-519"