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:
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.
Idle Reduction Technology Loans
The Arkansas Department of Environmental Quality (ADEQ) provides small business loans to institute pollution control and prevention measures. Idle reduction technologies for heavy-duty trucking applications are eligible. The maximum loan amount is $45,000, with a $65,000 lifetime maximum for one business, with loan terms up to 10 years. An eligible business must employ 100 individuals or less and demonstrate proof of profitability and the ability to repay the loan. For more information, including a loan application, see the ADEQ Environmental Assistance Low-Interest Loans for Small Businesses website.
Electric Vehicle (EV) Charging Station Grants
The Arkansas Department of Environmental Quality (ADEQ) offers rebates to government, private, and non-profit entities for the construction and installation costs of Level 2 EV charging stations. Funding is available in the following amounts:
|Maximum Rebate (One Port)
|Maximum Rebate (Two or More Ports)
Rebates are awarded on a first-come, first served basis. The program is funded by Arkansas’s portion of the Volkswagen Environmental Mitigation Trust and the Arkansas EV Infrastructure Fund. For more information, including eligibility and how to apply, see the ADEQ Level 2 Rebate Program website.
Utility / Private Incentives
Electric Vehicle (EV) Infrastructure Support
Arkansas utilities joined the National Electric Highway Coalition (NEHC), committing to create a network of direct current fast charging (DCFC) stations connecting major highway systems from the Atlantic Coast to the Pacific of the United States. NEHC utility members agree to ensure efficient and effective fast charging deployment plans that enable long distance EV travel, avoiding duplication among coalition utilities, and complement existing corridor DCFC sites. For more information, including a list of participating utilities and states, see the NEHC website.
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)
Regional Electric Vehicle (EV) and Automated Vehicle (AV) Support
Arkansas joined Oklahoma (Signatory States) in signing a memorandum of understanding (MOU) to support advanced mobility solutions, including EVs, AVs, and battery manufacturing. Signatory States are committed to:
- Establishing a launch pad for research and commercialization of EVs, AVs, and battery manufacturing;
- Collaborating with industry leaders and fueling stations;
- Supporting workforce development opportunities; and,
- Coordinating EV, AV, and battery manufacturing economic development efforts across the region.
For more information, see the Arkansas Governor’s Office press release.
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.
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 27-51-1410)
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.
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.
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.
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.