Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 HOUSE BILL 1702
4
5 By: Representative Wooldridge
6 By: Senator J. Petty
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE SALES AND USE TAX EXEMPTIONS FOR
10 CERTAIN MACHINERY AND EQUIPMENT USED IN
11 MANUFACTURING; TO PROVIDE A SALES AND USE TAX
12 EXEMPTION FOR MACHINERY AND EQUIPMENT USED IN CLOSED-
13 LOOP RECYCLING; AND FOR OTHER PURPOSES.
14
15
16 Subtitle
17 TO AMEND THE SALES AND USE TAX
18 EXEMPTIONS FOR CERTAIN MACHINERY AND
19 EQUIPMENT USED IN MANUFACTURING; AND TO
20 PROVIDE A SALES AND USE TAX EXEMPTION
21 FOR MACHINERY AND EQUIPMENT USED IN
22 CLOSED-LOOP RECYCLING.
23
24 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
25
26 SECTION 1. Arkansas Code � 26-52-402(c)(2)(B), concerning the
27 machinery and equipment that is included in the list of machinery and
28 equipment that is used directly in the manufacturing process for purposes of
29 the sales tax exemption on certain machinery and equipment, is amended to add
30 an additional subdivision to read as follows:
31 (vii)(a) Machinery and equipment used to
32 mechanically recycle post-use materials in a closed-loop circular process,
33 including without limitation machinery and equipment:
34 (1) Used to identify, gather, transport,
35 and store post-use materials;
36 (2) Used to convert post-use materials
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1 into raw materials, work-in-process materials, or a finished product; and
2 (3) That convey converted post-use
3 materials directly to where it is reintroduced into the taxpayer's
4 manufacturing process.
5 (b) As used in this subdivision
6 (c)(2)(B)(vii):
7 (1) "Closed-loop circular process" means
8 a manufacturing process in which reclaimed post-use materials are converted
9 and reintroduced into the original process and become a recognized component
10 of the finished product;
11 (2)(A) "Mechanically recycle" means to
12 reclaim and convert post-use materials into materials that are recognized in
13 the finished product using a series of physical processes.
14 (B) "Mechanically recycle"
15 includes without limitation washing, drying, grinding, regranulating, and
16 compounding; and
17 (3) "Post-use material" means a material
18 that is:
19 (A) Generated and reclaimed
20 directly from the taxpayer's manufacturing process;
21 (B) Managed as an item of value in
22 a controlled manner;
23 (C) Intended to be mechanically
24 recycled into an item of raw materials, work-in-process material, or a
25 finished product;
26 (D) Not originated as a post-
27 consumer waste material; and
28 (E) Not mixed with any other solid
29 waste or hazardous waste onsite or during processing; and
30
31 SECTION 2. Arkansas Code � 26-53-114(c)(3)(B), concerning the
32 machinery and equipment that is included in the list of machinery and
33 equipment that is used directly in the manufacturing process for purposes of
34 the use tax exemption on certain machinery and equipment, is amended to add
35 an additional subdivision to read as follows:
36 (vi)(a) Machinery and equipment used to mechanically
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1 recycle post-use materials generated directly from the manufacturing
2 operation in a closed-loop circular process, including without limitation
3 machinery and equipment:
4 (1) Used to identify, gather, transport,
5 and store post-use materials;
6 (2) Used to convert post-use materials
7 into raw materials, work-in-process materials, or a finished product; and
8 (3) That convey converted post-use
9 materials directly to where it is reintroduced into the taxpayer's
10 manufacturing process.
11 (b) As used in this subdivision (c)(3)(B)(vi):
12 (1) "Closed-loop circular process" means
13 a manufacturing process in which reclaimed post-use materials are converted
14 and reintroduced into the original process and become a recognized component
15 of the finished product;
16 (2)(A) "Mechanically recycle" means to
17 reclaim and convert post-use materials into materials that are recognized in
18 the finished product using a series of physical processes.
19 (B) "Mechanically recycle"
20 includes without limitation washing, drying, grinding, regranulating, and
21 compounding; and
22 (3) "Post-use material" means a material
23 that is:
24 (A) Generated and reclaimed
25 directly from the taxpayer's manufacturing process;
26 (B) Managed as an item of value in
27 a controlled manner;
28 (C) Intended to be mechanically
29 recycled into an item of raw materials, work-in-process material, or a
30 finished product;
31 (D) Not originated as a post-
32 consumer waste material; and
33 (E) Not mixed with any other solid
34 waste or hazardous waste onsite or during processing; and
35
36 SECTION 3. EFFECTIVE DATE. Sections 1 and 2 of this act are effective
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1 on the first day of the calendar quarter following the effective date of this
2 act.
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4 03/05/2025 12:40:46 PM JLL207Every fact on this page links to its source, starting with the official bill record.