Second Amendment sales tax holidays proposed in Tennessee and Arkansas

Update 5.25.2017: Neither Arkansas nor Tennessee approved the proposed Second Amendment sales tax holidays. Arkansas SB 126 failed on May 1 when the General Assembly adjourned sine die. Tennessee SB 1273 got held up in the Senate FW&M Revenue Subcommittee through the end of the session. 

Not many states specifically exempt guns and other hunting supplies from sales tax. Louisiana has held a Second Amendment sales tax holiday since 2009, and Mississippi has done the same since 2014. Now a tax-free period for guns and ammunition is under consideration in both Arkansas and Tennessee.

Arkansas Second Amendment sales tax holiday

Senate Bill 126 seeks to establish an annual “Second Amendment Appreciation Weekend” on the second Saturday and Sunday of September. During that time, the following items would be exempt from Arkansas state sales and use tax:

• Ammunition
• Any type of handgun, including a pistol or revolver
• Rifles
• Shotguns

Eligible items on layaway qualify for the exemption if either:

• The purchaser makes final payment on the layaway order and receives the goods during the exemption period
• The seller accepts the order for the goods (for immediate delivery) during the exemption period, even if delivery occurs after the sales tax holiday

Qualifying items purchased during the exemption period with a rain check are eligible for the exemption, regardless of when the rain check was issued. However, the issuance of a rain check during the sales tax holiday does not exempt goods from tax if they are purchased after the exemption period.

Tennessee Second Amendment sales tax holiday

Senate Bill 1273 would create an annual Second Amendment sales tax holiday, which would be held the first weekend of September. During that time, the following items would be exempt from Tennessee sales tax:

• Firearms, including pistols, revolvers, rifles, and shotguns (but not including explosive weapons)
• Firearm accessories, including clips, firearm cases and covers, grips, magazines, scopes, and suppressors
• Firearm ammunition, including bullets, cartridges, shots, and shotgun shells

The billed passed the Senate on its first consideration. If ultimately enacted, it would take effect July 1, 2017, “the public welfare requiring it.”

Compliance challenges

Sales tax holidays vary from state to state, so the two existing Second Amendment tax-free periods and the two proposed sales tax holidays differ in the details. For example, while both Mississippi and Louisiana allow an exemption for archery supplies, Louisiana exempts hunting clothing, and Mississippi does not. Neither of the proposed holidays allow an exemption for hunting clothing.

Such variations make sales and use tax compliance challenging, especially for businesses that make sales in multiple states. Tax automation software facilitates compliance for businesses of all sizes, in all states. Learn how it works.

photo credit: Madbuster75 via photopin cc