Arkansas Laws and Incentives

Listed below are the summaries of all current Arkansas laws, incentives, regulations, funding opportunities, and other initiatives related to alternative fuels and vehicles, advanced technologies, or air quality. You can go directly to summaries of:

• State Incentives (4)
• Utility / Private Incentives (8)
• Laws and Regulations (12)

State Incentives

Bus Replacement Grants

The Arkansas Department of Environmental Quality (DEQ) offers grants for the purchase of new all-electric or alternative fuel buses to replace eligible diesel school and transit buses through the Advanced Bus and Clean Transportation Program. Eligible alternative fuels include compressed natural gas, liquid natural gas, propane, and electricity. The program is funded by Arkansas’s portion of the Volkswagen Environmental Mitigation Trust. Eligible applicants include public school districts and transit authorities. For more information, including additional eligibility requirements, see the DEQ Grant Programs Improving Air Quality webpage.

Clean Fuels Program

The Arkansas Department of Environmental Quality (DEQ) offers competitive grants for projects that repower or replace eligible medium-duty trucks, heavy-duty trucks, or buses with new lower-emitting alternative fuel technologies through the Clean Fuels Funding Assistance Program. Eligible alternative fuels include electricity, compressed natural gas, propane, and hybrid electric vehicles. Public, private, and non-profit entities are eligible. For more information, including additional eligibility and cost-share requirements, see the DEQ Grant Programs Improving Air Quality webpage.

Diesel Emissions Reduction Grants

The Arkansas Division of Environmental Quality (DEQ) provides U.S. Environmental Protection Agency Diesel Emissions Reduction Act funding for projects that reduce emissions from medium- and heavy-duty vehicles. Funding is available for projects that reduce diesel emissions by employing exhaust controls, engine upgrades, idling reduction technologies, engine replacements, or vehicle and equipment replacements. Additional terms and conditions apply. For more information, including how to apply, see the DEQ What is Go RED webpage.

Arkansas' National Electric Vehicle Infrastructure (NEVI) Planning

The U.S. Department of Transportation’s (DOT) NEVI Formula Program requires the Arkansas Department of Transportation (ARDOT) to submit an annual EV Infrastructure Deployment Plan (Plan) to the DOT and U.S. Department of Energy (DOE) Joint Office of Energy and Transportation (Joint Office), describing how the state intends to distribute NEVI funds. The submitted plans must be established according to NEVI guidance.

For more information about Arkansas’ NEVI planning process, see the ARDOT DEPARTMENT Electric Vehicle Infrastructure Deployment Plan website. To review Arkansas’ NEVI plan, see the Joint Office State Plans for EV Charging website.

Utility / Private Incentives

Black Hills Energy - Arkansas

Black Hills Energy is an investor-owned utility (IOU) that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Black Hills Energy website.

Residential Incentives

Non-Residential Incentives

Bolivar Energy Authority - Arkansas

Bolivar Energy Authority is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Bolivar Energy Authority website.

Residential Incentives

Non-Residential Incentives

Chicasaw Electric Cooperative - Arkansas

Chicasaw Electric Cooperative is a cooperative that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Chicasaw Electric Cooperative website.

Residential Incentives

Non-Residential Incentives

Covington Electric System - Arkansas

Covington Electric System is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Covington Electric System website.

Residential Incentives

Non-Residential Incentives

Empire District Electric Co - Arkansas

Empire District Electric Co is an investor-owned utility (IOU) that operates in Arkansas. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Empire District Electric Co website.

Residential Incentives

Non-Residential Incentives

Entergy - Arkansas

Entergy is an investor-owned utility (IOU) that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Entergy website.

Residential Incentives

Non-Residential Incentives

Memphis Light, Gas and Water - Arkansas

Memphis Light, Gas and Water is a municipal utility that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Memphis Light, Gas and Water website.

Residential Incentives

Non-Residential Incentives

Southwestern Electric Power Company (SWEPCO) - Arkansas

Southwestern Electric Power Company (SWEPCO) is an investor-owned utility (IOU) that operates in multiple states. This page provides a summary of the types of incentives provided by the utility related to alternative fuels and vehicles. For more information on these incentives, see the Southwestern Electric Power Company (SWEPCO) website.

Residential Incentives

Non-Residential Incentives

Laws and Regulations

Electric Vehicle (EV) and Automated Vehicle (AV) Support

The governor established the Arkansas Council on Future Mobility (Council) to support advanced mobility technology, including EVs and AVs. The Council must identify state laws that are prohibitive to EVs and AVs and provide recommendations on policies and incentives to promote their advancement. Additionally, the Council must identify future tasks and goals related to EV and AV education, workforce training, and economic development. The Council published a report of their recommendations in December 2022. Recommendations include:

• Increase the EV annual registration fee;
• Increase funding for existing state EV programs;
• Consider creating tax credits to fund the expansion of the state’s direct current fast charger (DCFC) network, and
• Create EV and automated vehicle career technical education training programs for high school and community college students.

(Reference Executive Order 22-06, 2022)

Hybrid Electric Vehicle (HEV) and Electric Vehicle (EV) Fee

HEV and EV owners must pay an annual fee in addition to other registration fees. The fee is $200 for all-electric vehicles, $100 for plug-in hybrid electric vehicles, and $50 for HEVs. Fees contribute to the State Highway and Transportation Department Fund. After July 1, 2024, the fees will also go to the County Aid Fund, and the Municipal Aid Fund. Vehicles that are registered with a military service and veterans special license plate with permanent decal pursuant to Arkansas Code 27-24-201 are exempt from the annual fee.

(Reference Arkansas Code 19-6-301, 27-14-614, and 27-24-201 and House Bill 1354, 2023)

Public Utility Definition

A person or corporation that supplies electricity to the public exclusively to charge electric vehicles is not defined as a public utility.

(Reference Arkansas Code 23-1-101(9)))

Automated Vehicle (AV) Programs

AVs may operate in Arkansas under an AV program established by the State Highway Commission if an exemption is granted by the Arkansas Department of Transportation. To participate in an AV program, AVs must have proof of insurance, comply with all traffic laws, be able to safely operate at a railroad crossing, and have safety mechanisms in place in the event of a driving system failure. AV program participants may operate an AV that is not equipped with seatbelts, a steering wheel, or a rearview mirror.

(Reference Arkansas Code 27-51-2002)

Alternative Fuel Vehicle Conversion Notification

Any individual or company who converts a vehicle to operate on an alternative fuel must report the conversion to the Arkansas Department of Finance and Administration (DFA) within 10 days of the conversion. An owner or operator who fails to report such a conversion may be subject to a penalty. For more information, including reporting forms, see the DFA website.

(Reference Arkansas Code 26-56-315 and 26-62-214)

Liquefied Natural Gas (LNG) and Propane Tax and User Permit

LNG and propane are subject to a per mile excise tax of $0.075 per gallon. In lieu of the excise tax, LNG and propane users must pay an annual flat fee for a special fuel user’s permit. The fee is based on the vehicle’s gross vehicle weight rating. For each vehicle fueled by LNG or propane, the vehicle owner must apply for and obtain a liquefied gas special fuel user’s permit from the Arkansas Department of Finance and Administration (DFA). For more information, including fees and applications, see the DFA website.

(Reference Arkansas Code 26-56-102, 26-56-301 and 26-56-304)

Alternative Fuels Tax and Reporting

Excise taxes on alternative fuels are imposed on a gasoline gallon equivalent (GGE) basis. The tax rate for each alternative fuel type is based on the number of motor vehicles licensed in the state that use the specific fuel, not including vehicles the federal government owns or leases. The Arkansas Department of Finance and Administration (DFA) and the Arkansas State Highways and Transportation Department must prepare an annual report with the number of alternative fuel vehicles licensed in the state and the tax revenue generated. The DFA must establish the tax rate annually by April 1. Licensed alternative fuel suppliers must pay alternative fuel taxes for product dispensed, sold to a dealer or user, or used in a motor vehicle owned or operated by the alternative fuel supplier. Alternative fuel suppliers must prepare a monthly report on the number of GGEs of alternative fuels sold and possess a sufficient number of credits to cover the alternative fuel sales tax.

(Reference Arkansas Code 19-6-301, 26-56-502, 26-56-601, and 26-62-201 through 262-62-209)

Natural Gas Metering

Individuals who use natural gas for residential or other tax-free purposes may not use natural gas in motor vehicles unless the natural gas is obtained through a separate meter which the alternative fuels supplier installed for such purposes.

(Reference Arkansas Code 26-62-203)

Alternative Fuel Definition and Specifications

An alternative fuel is defined as biofuel, ethanol, methanol, hydrogen, coal-derived liquid fuels, electricity, natural gas, propane gas, or a synthetic transportation fuel. Biofuel is defined as a renewable, biodegradable, combustible liquid or gaseous fuel derived from biomass or other renewable resources that can be used as transportation fuel, combustion fuel, or refinery feedstock and that meets ASTM standards and federal quality requirements for each category or grade of fuel. Biofuel includes biodiesel or renewable diesel, renewable gasoline, renewable jet fuel and naphtha, biocrude, biogas, and other renewable, biodegradable, mono alkyl ester combustible fuel derived from biomass. Ethanol is ethyl alcohol derived from biomass that meets ASTM Standard D4806-04a and federal quality requirements. Synthetic transportation fuel is a liquid fuel produced from biomass by a gasification process or other refining process that meets any applicable state or federal environmental requirement.

(Reference Arkansas Code 15-13-102 and 26-62-102)

Biodiesel Use Requirement

All diesel-powered motor vehicles, light trucks, and equipment owned or leased by a state agency must operate using diesel fuel that contains a minimum of 2% biodiesel (B2). For the purpose of this requirement, biodiesel includes renewable diesel and other renewable, biodegradable mono alkyl ester combustible fuel derived from biomass. The Department of Finance and Administration may grant waivers to the B2 requirement for state agency vehicles if the fuel is not available in certain geographic areas, the fuel price is at least $0.15 more per gallon then the petroleum equivalent, or compliance with the standard is not otherwise economically feasible.

(Reference Arkansas Code 15-13-101 and 15-13-102)

Low-Speed Vehicle Definition

A low-speed vehicle is defined as a four wheeled vehicle that has a maximum speed greater than 20 miles per hour (mph) but not more than 25 mph and has a gross vehicle weight rating less than 3,000 pounds.

(Reference 23-112-103)

Utility Electric Vehicle (EV) Charging Station Deployment Authorization and Requirements

Investor-owned utilities (IOUs) may install and own public direct current fast charging stations. IOUs must allow site hosts to install a metering device for measuring electricity sold at the EV charging station and choose the EV charging station equipment vendor and network service. IOUs must submit an annual report to the Public Service Commission on the construction and operation of the public EV charging stations.

(Reference Public Service Commission Docket No. 22-026-TF Order No. 8)