Hardwick Pushes Tax Break For New Walton Museum

Wal-Mart heiress Alice Walton apparently wants to build a large art museum in Bentonville.

State Rep. Horace Hardwick, R-Bentonville, introduced a bill in the House of Representatives on March 3 that would exempt a $30 million museum with more than $100 million in artwork from having to pay state sales taxes on acquisitions or the sale of artwork.

“The gross receipts or gross proceeds derived from the sale of any tangible personal property or services to a qualified museum are exempt from the Arkansas Gross Receipts Act of 1941,” House Bill 2480 states.

Nonprofit 501(c)(3) organizations are already exempt from federal income taxes.

The state sales-tax exemption would apply to a museum of that size that opens sometime between Jan. 1, 2005, and Jan. 1, 2013.

The bill is co-sponsored by Rep. Bob Mathis, D-Hot Springs, and Sen. Steve Higginbothom, D-Marianna. It has been referred to the House Committee on Revenue and Taxation.

The proposed bill doesn’t name the “nonprofit organization” that wants to build the museum. But two sources close to the project, who both requested anonymity, said it’s the brainchild of Alice Walton. She’s the daughter of the late Sam Walton, who founded Wal-Mart Stores Inc. of Bentonville.

The nonprofit organization, most likely, would be the Walton Family Charitable Support Foundation.

Promoting Tax Break

Alice Walton, who lives in Mineral Wells, Texas, is an art collector who has owned an Andrew Wyeth painting among works by other well-known artists.

Alice Walton is also the richest woman in the world with a net worth of more than $20 billion, according to Forbes magazine.

That might explain why the bill’s supporters didn’t mention the name Walton in HB2480. Some legislators who are grappling with issues like education and roads might not like the idea of giving a tax break to the richest family in the world to build an art museum in Bentonville.

With Arkansas’ 6 percent state sales tax, the tax on $100 million for artwork would be $6 million.

Dr. Ellen A. “Nan” Plummer, executive director of the Arkansas Arts Center in Little Rock, said that museum currently pays the state sales tax for acquisitions.

Since the proposed museum would be a nonprofit entity and serve the public, the tax-exempt idea isn’t as far fetched as House Bill 1339 of 2001. That year, Rep. David Hausam, R-Bentonville, proposed a $2.3 billion sales-tax break for Wal-Mart to buy a $35 million long-range jet. But HB1339 encountered so much turbulence in the Legislature, it never took off.

So the sponsors of HB2480 are apparently taking no chances. They’re not saying much either.

Hardwick was as vague during a telephone interview with the Northwest Arkansas Business Journal as he was in his proposed bill.

When asked if only the Walton family had enough money to build a facility of that size in Arkansas, Hardwick noted that the Stephens family of Little Rock also supports the arts.

When asked if the project would be railroaded if HB2480 doesn’t become law, Hardwick said, “It might.”

“I think wherever it’s located, it’ll be great for the state of Arkansas,” Mathis said. “The bill just says it would be built somewhere in the state of Arkansas. I would love to have it in Hot Springs.”

Will it be built in Hot Springs?

“I doubt it,” Mathis said.

When asked if the sponsors of HB2480 would try to get the bill at least part of the way through the legislative process without mentioning the name of the nonprofit organization, he said “probably.”

“Right now, we’d just rather not say,” he added.

Alice Walton was instrumental in funding the construction of the Northwest Arkansas Regional Airport in Highfill, which was completed in 1998. The terminal is named for her, and a bust of Walton greets travelers who enter and leave the building.

In 1987, Alice Walton founded Llama Co., an investment banking firm, in Fayetteville. She dissolved the company and moved to Texas in 1998. She now raises cutting horses on her Rocking W Ranch in Texas.

Walton College Study

Besides Hardwick’s proposal, another group is studying the feasibility of a different museum for Northwest Arkansas. After the University of Arkansas Museum closed two years ago, a group of UA administrators and students in the Walton College of Business began “the museum project.”

Led by faculty advisor Pamela Schmidt, the students are looking at five hypothetical concepts: a children’s museum, aquarium, visual arts museum, history museum and an all-inclusive museum. If a visual arts museum opens in Bentonville, though, that could alter the area’s other museum project.

Participating in the UA project have been Fayetteville Mayor Dan Coody; John Lewis, former president of The Bank of Fayetteville N.A.; Don Bobbitt, UA dean of arts and sciences; John Hehr, UA associate dean of arts and sciences; and Eric Parkinson, owner of Hannover House, a DVD distribution company. Parkinson wants the new museum, which could be located anywhere in Northwest Arkansas, to be an affiliate of the Smithsonian Institution in Washington, D.C.

The group raised $30,000 for the study last year and expects to raise another $65,000 this year.

Cost of the entire project could vary considerably.

Although everything is still up in the air, the group is loosely shooting for a September 2009 opening for the proposed museum.