Arkansas Auto Dealer Owes Use Tax on Company Cars, Justices Say

Two Arkansas dealerships selling Fords and Toyotas are on the hook for sales and use tax on cars loaned to employees and family, the state high court ruled Thursday.

The loans constitute “withdrawals from stock” that prompt sales tax obligations, the Arkansas Supreme Court ruled in a 5-2 opinion.

“The statute does not require a permanent withdrawal from stock or consumption of the property at issue,” Justice Karen R. Baker wrote for the majority. “Rather, the plain language of the statute contemplates that the use of the tangible personal property of an established business for use by any person ...