An Arkansas legislator has filed a bill that would repeal fees based on water usage that apply to car wash operators.
In Senate Bill 9, filed on Monday, Nov. 23, Sen. Gary Stubblefield (R-Branch) proposed amending Arkansas Code § 26-52-401(41)(B), which governs sales taxes and fees for cash wash operators. The bill would repeal fees that cash wash operators pay that are based on water usage.
Under Arkansas Code Title 26, Chapter 57, Subchapter 16, a car wash operator that claims a sales and use tax exemption would be required to pay a fee in lieu of paying the sales tax required under the Arkansas Gross Receipts Act of 1941 and the compensating use tax under the Arkansas Compensating Tax Act of 1949. Car wash operators that were required to pay the fee were also required to register electronically with the Department of Finance and Administration secretary before making an automatic car wash or car wash tunnel commercially available.
These fees would be repealed by the new bill along with fees for using water from a public water system.
Under the current law, car wash operators that use water from a public water system are required to make a monthly payment to the Department of Finance and Administration based on their water usage. The formulate for determining the fee is multiplying the aggregate number of gallons used by all the car wssh tunnels by 0.8, and then multiplying this number by four-tenths of a cent. For automatic car washes, operators multiply the number of gallons of water used by the automatic car washes by 0.8 and then multiply this number by two-tenths of a cent. These funds are earmarked for general revenue and placed int eh State Apportionment Fund.
Stubblefield proposes eliminating the fees and making the bill effective on the first day of the calendar quarter after the bill is approved.
In the bill’s first section, Stubblefield proposes definitions of services and equipment that car wash operators can provide. The bill defines ancillary services to include “hand prepping any portion of a motor vehicle, vacuuming, hand drying any portion of a motor vehicle, waxing any portion of a motor vehicle, hand cleaning any portion of a motor vehicle and applying a protective or shine coat to any portion of a motor vehicle.” It also defines automatic car washes, car wash tunnels and self-service bays, using language found in Subchapter 15 of the Arkansas Code Title 26, Chapter 57, which Stubblefield has proposed eliminating.