It’s ad valorem time in Arkansas
As the calendar flips over to 2024, truckers who run in and through Arkansas should keep an eye out for a form the state will want back by the end of March.
The form relates to a tax called ad valorem that the state of Arkansas charges any motor carriers who conduct for-hire transportation in or through the state. It applies to both Arkansas-based motor carriers and out-of-state motor carriers.
In January, any motor carriers registered with the state of Arkansas will receive an Annual Motor Carrier Report. This report will ask for things like:
- A list of equipment owned as of Jan. 1, including manufacture year
- Total for-hire miles
- Total Arkansas for-hire miles
That information is due by March 31, 2024.
The provided information is used to calculate the ad valorem tax owed for 2023. Failing to return the Annual Motor Carrier Report results in a penalty or a default assessment.
The ad valorem tax is calculated on the percentage of total for-hire miles in Arkansas, the value of the equipment owned by the motor carrier and a millage tax rate. A mil is 1/10 of a penny. So motor carriers with more expensive equipment and/or more miles in Arkansas will have a higher ad valorem tax than motor carriers with less expensive equipment and/or fewer miles in the state.
For carriers who did not run any miles in the state in 2023, make sure to report that on the Annual Motor Carrier Report. If you fail to return the form, you will receive a default assessment and penalty even if you didn’t run in the state.
But wait, there’s more.
Making the process slightly confusing is that the whole ad valorem process takes three years to complete. Miles traveled in 2022 were declared in early 2023 and will be billed in 2024. So later next year, you’ll be getting another notice from Arkansas. That one will be a bill for your 2022 miles traveled in the state. LL