Shackleford, Phillips & Ratcliff, P.A. has joined PPGMR Law, PLLC.

call 501.603.9000 menu

Arkansas Legislature Overrides Governor's Veto of Tax Exemption for Fracking Material

The Arkansas Legislature has voted to override Gov. Mike Beebe's line-item veto of a tax exemption for sands and other materials injected into oil and gas wells during the fracking process. The exemption declares that sand injected into wells is "equipment" used in manufacturing and thus exempt from the state sales tax.  Gov. Beebe invoked the line-item veto for the tax exemption that was grafted into Section 16 of House Bill 1048, the appropriation bill for the Revenue Services Division of the Arkansas Department of Finance and Administration, based on his belief that the correct procedural steps were not taken for this bill to become law:

Substantive changes to Arkansas law that have no relation to appropriations, such as Section 16 of HB 1048, should rarely be considered during fiscal sessions.  If they are to be considered at all, it should be done through the process the people established in our Constitution, and not through "special language" amendments to unrelated appropriation bills.

By a vote of 55-41, the Arkansas House voted to override Gov. Beebe's veto on March 19, 2014, and the Senate followed soon after, voting 26-7 the same day.