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Arkansas Lawmakers Review Sales Taxes On Charitable Gifts

Sarah Whites-Koditschek
/
KUAR

Some Arkansas lawmakers are pushing for an end to sales taxes on donations to charity.  

A legislative committee Thursday reviewed a sales tax on some types of charitable gifts. 

Republican State Senator Alan Clark sponsored the study. Clark said he owns a hardware store and often can’t sell all his merchandise, including rugs and machine parts.

“You'd put them in the dollar bin and nobody was glad to take them. The Fire Department was glad to get them," he said.

"What's the state of Arkansas going to charge that retailer a sales tax for?” he asked.

John Theis, an Assistant Commissioner of Revenue from the Department of Finance and Administration, told lawmakers that current law requires business owners to purchase and pay taxes on items before donating them. He clarified that there are some tax benefits for businesses to give to charity in Arkansas. 

"When a business purchases those items tax free as a sale for resale the item becomes part of their cost for goods sold and is deductible on both their state and federal income tax return," he said.

"So there is some benefit just for having purchased that item, whether it's ever sold or not."

Representatives from the conservative values group, Arkansas Family Council, as well as the Arkansas Association of Educational Administrators spoke about charitable gifts and the fundraising challenge created by sales taxes on donations. 

Sarah Whites-Koditschek is a former News Anchor/ Reporter for KUAR News and Arkansas Public Media.