PocketLaw | Arkansas Code | Multistate Tax Compact. [Effective January

Multistate Tax Compact. [Effective January 1, 2021.]

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The “Multistate Tax Compact” is enacted into law and entered into with all jurisdictions legally joining therein, in the form substantially as follows:

MULTISTATE TAX COMPACT

ARTICLE I Purposes

The purposes of this compact are to:

(1) Facilitate proper determination of state and local tax liability of multistate taxpayers, including the equitable apportionment of tax bases and settlement of apportionment disputes;
(2) Promote uniformity or compatibility in significant components of tax systems;
(3) Facilitate taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration;
(4) Avoid duplicative taxation.

ARTICLE II Definitions

As used in this compact:

(1) “State” means a state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any territory or possession of the United States;
(2) “Subdivision” means any governmental unit or special district of a state;
(3) “Taxpayer” means any corporation, partnership, firm, association, governmental unit or agency, or person acting as a business entity in more than one state;
(4) “Income tax” means a tax imposed on or measured by net income including any tax imposed on or measured by an amount arrived at by deducting expenses from gross income, one (1) or more forms of which expenses are not specifically and directly related to particular transactions;
(5) “Capital stock tax” means a tax measured in any way by the capital of a corporation considered in its entirety;
(6) “Gross receipts tax” means a tax, other than a sales tax, which is imposed on or measured by the gross volume of business, in terms of gross receipts or in other terms, and in the determination of which no deduction is allowed which would constitute the tax on income tax;
(7) “Sales tax” imposed with respect to the transfer for a consideration of ownership, possession, or custody of tangible personal property or the rendering of services measured by the price of the tangible personal property transferred or services rendered and which is required by state or local law to be separately stated from the sales price by the seller, or which is customarily separately stated from the sales price, but does not include a tax imposed exclusively on the sale of a specifically identified commodity or article or class of commodities or articles;
(8) “Use tax” means a nonrecurring tax, other than a sales tax, which (a) is imposed on or with respect to the exercise or enjoyment of any right or power over tangible personal property incident to the ownership, possession, or custody of that property or the leasing of that property from another including any consumption, keeping, retention, or other use of tangible personal property and (b) is complementary to a sales tax;
(9) “Tax” means an income tax, capital stock tax, gross receipts tax, sales tax, use tax, and any other tax which has a multistate impact, except that the provisions of Articles III, IV, and V of this compact shall apply only to the taxes specifically designated therein, and the provisions of Article IX of this compact shall apply only in respect to determinations pursuant to Article IV.

ARTICLE III Elements of Income Tax Laws

Taxpayer Option, State and Local Taxes.

(1) Any taxpayer subject to an income tax whose income is subject to apportionment and allocation for tax purposes pursuant to the laws of a party state or pursuant to the laws of subdivisions in two (2) or more party states may elect to apportion and allocate his income in the manner provided by the laws of such state or by the laws of such states and subdivisions without reference to this compact, or may elect to apportion and allocate in accordance with Article IV. This election for any tax year may be made in all party states or subdivisions thereof or in any one or more of the party states or subdivisions thereof without reference to the election made in the others. For the purposes of this paragraph, taxes imposed by subdivisions shall be considered separately from state taxes and the apportionment and allocation also may be applied to the entire tax base. In no instance wherein Article IV is employed for all subdivisions of a state may the sum of all apportionments and allocations to subdivisions within a state be greater than the apportionment and allocation that would be assignable to that state if the apportionment or allocation were being made with respect to a state income tax.
(2) Each party state or any subdivision thereof which imposes an income tax shall provide by law that any taxpayer required to file a return, whose only activities within the taxing jurisdiction consist of sales and do not include owning or renting real estate or tangible personal property, and whose dollar volume of gross sales made during the tax year within the state or subdivision, as the case may be, is not in excess of one hundred thousand dollars ($100,000) may elect to report and pay any tax due on the basis of a percentage of such volume, and shall adopt rates which shall produce a tax which reasonably approximates the tax otherwise due. The Multistate Tax Commission, not more than once in five years, may adjust the one hundred thousand dollar ($100,000) figure in order to reflect such changes as may occur in the real value of the dollar, and such adjusted figure, upon adoption by the commission, shall replace the one hundred thousand dollar ($100,000) figure specifically provided herein. Each party state and subdivision thereof may make the same election available to taxpayers additional to those specified in this paragraph.
(3) Nothing in this article relates to the reporting or payment of any tax other than an income tax.

Taxpayer Option, Short Form.

Coverage.

ARTICLE IV Division of Income

(1) As used in this Article, unless the context otherwise requires:
1. (a) “Business income” means income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operation;
2. (b) “Commercial domicile” means the principal place from which the trade or business of the taxpayer is directed or managed;
3. (c) “Compensation” means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services;
4. (d) [Repealed.]
5. (e) “Nonbusiness income” means all income other than business income;
6. (f) “Public utility” means any business entity (1) which owns or operates any plant, equipment, property, franchise, or license for the transmission of communications, transportation of goods or persons, except by pipeline, or the production, transmission, sale, delivery, or furnishing of electricity, water, or steam; and (2) whose rates of charges for goods or services have been established or approved by a federal, state, or local government or governmental agency;
7. (g) “Sales” means all gross receipts of the taxpayer not allocated under paragraphs of this article;
8. (h) “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof;
9. (i) “This state” means the state in which the relevant tax return is filed or, in the case of application of this article to the apportionment and allocation of income for local tax purposes, the subdivision or local taxing district in which the relevant tax return is filed.
(2) Any taxpayer having income from business activity which is taxable both within and without this state, other than activity as a public utility or the rendering of purely personal services by an individual, shall allocate and apportion his net income as provided in this article. If a taxpayer has income from business activity as a public utility but derives the greater percentage of his income from activities subject to this article, the taxpayer may elect to allocate and apportion his entire net income as provided in this article.
(3) For purposes of allocation and apportionment of income under this article, a taxpayer is taxable in another state if (1) in that state he is subject to a net income tax, a franchise tax measured by net income, a franchise tax for the privilege of doing business, or a corporate stock tax, or (2) that state has jurisdiction to subject the taxpayer to a net income tax regardless of whether, in fact, the state does or does not.
(4) Rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties, to the extent that they constitute nonbusiness income, shall be allocated as provided in paragraphs 5 through 8 of this article.
(5)
1. (a) Net rents and royalties from real property located in this state are allocable to this state.
2. (b) Net rents and royalties from tangible personal property are allocable to this state: (1) if and to the extent that the property is utilized in this state, or (2) in their entirety if the taxpayer's commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.
3. (c) The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year. If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession.
(6)
1. (a) Capital gains and losses from sales of real property located in this state are allocable to this state.
2. (b) Capital gains and losses from sales of tangible personal property are allocable to this state if (1) the property had a situs in this state at the time of the sale, or (2) the taxpayer's commercial domicile is in this state and the taxpayer is not taxable in the state in which the property had a situs.
3. (c) Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer's commercial domicile is in this state.
(7) Interest and dividends are allocable to this state if the taxpayer's commercial domicile is in this state.
(8)
1. (a) Patent and copyright royalties are allocable to this state: (1) if and to the extent that the patent or copyright is utilized by the payer in this state, or (2) if and to the extent that the patent copyright is utilized by the payer in the state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in this state.
2. (b) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer's commercial domicile is located.
3. (c) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer's commercial domicile is located.
(9) For the tax year beginning January 1, 2021, all business income shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the total sales of the taxpayer in this state during the tax period and the denominator of which is the total sales of the taxpayer everywhere during the tax period.
(10) [Repealed.]
(11) [Repealed.]
(12) [Repealed.]
(13) [Repealed.]
(14) [Repealed.]
(15) [Repealed.]
(16) Sales of tangible personal property are in this state if:
1. (a) The property is delivered or shipped to a purchaser, other than the United States Government, within this state regardless of the f.o.b. point or other conditions of the sale; or
2. (b) The property is shipped from an office, store, warehouse, factory, or other place of storage in this state and (1) the purchaser is the United States Government or (2) the taxpayer is not taxable in the state of the purchaser.
(17) Sales, other than sales of tangible personal property, are in this state if:
1. (a) The income-producing activity is performed in this state; or
2. (b) The income-producing activity is performed both in and outside this state and a greater proportion of the income-producing activity is performed in this state than in any other state, based on costs of performance.
(18) If the allocation and apportionment provisions of this Article do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for or the tax administrator may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
1. (a) Separate accounting;
2. (b) The inclusion of one (1) or more additional factors which will fairly represent the taxpayer's business activity in this state; or
3. (c) The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.

ARTICLE V Elements of Sales and Use Tax Laws

Tax Credit.

(1) Each purchaser liable for a use tax on tangible personal property shall be entitled to full credit for the combined amount or amounts of legally imposed sales or use taxes paid by him with respect to the same property to another state and any subdivision thereof. The credit shall be applied first against the amount of any use tax due the state, and any unused portion of the credit shall then be applied against the amount of any use tax due a subdivision. For purposes of applying this credit by other states to Arkansas residents, the term “gross receipts tax” as applied to Arkansas residents by Title 26, Chapter 52 of this Code, shall be synonymous with the term “sales tax” as used by the state applying such credit.
(2) Whenever a vendor receives and accepts in good faith from a purchaser a resale or other exemption certificate or other written evidence of exemption authorized by the appropriate state or subdivision taxing authority, the vendor shall be relieved of liability for a sales or use tax with respect to the transaction.

Exemption Certificates, Vendors May Rely.

ARTICLE VI The Commission

Organization and Management.

(1)
1. (a) The Multistate Tax Commission is hereby established. It shall be composed of one (1) “member” from each party state who shall be the head of the state agency charged with the administration of the types of taxes to which this compact applies. If there is more than one (1) such agency the state shall provide by law for the selection of the commission member from the heads of the relevant agencies. State law may provide that a member of the commission be represented by an alternate but only if there is on file with the commission written notification of the designation and identity of the alternate. The attorney general of each party state or his designee, or other counsel if the laws of the party state specifically provide, shall be entitled to attend the meetings of the commission, but shall not vote. Such attorneys general, designees, or other counsel shall receive all notices of meetings required under paragraph 1(e) of this article.
2. (b) Each party state shall provide by law for the selection of representatives from its subdivisions affected by this compact to consult with the commission member from that state.
3. (c) Each member shall be entitled to one (1) vote. The commission shall not act unless a majority of the members are present, and no action shall be binding unless approved by a majority of the total number of members.
4. (d) The commission shall adopt an official seal to be used as it may provide.
5. (e) The commission shall hold an annual meeting and such other regular meetings as its bylaws may provide and such special meetings as its executive committee may determine. The commission bylaws shall specify the dates of the annual and any other regular meetings, and shall provide for the giving of notice of annual, regular, and special meetings. Notices of special meetings shall include the reasons therefor and an agenda of the items to be considered.
6. (f) The commission shall elect annually, from among its members, a chairman, a vice-chairman, and a treasurer. The commission shall appoint an executive director who shall serve at its pleasure, and it shall fix his duties and compensation. The executive director shall be secretary of the commission. The commission shall make provision for the bonding of such of its officers and employees as it may deem appropriate.
7. (g) Irrespective of the civil service, personnel, or other merit system laws of any party state, the executive director shall appoint or discharge such personnel as may be necessary for the performance of the functions of the commission and shall fix their duties and compensation. The commission bylaws shall provide for personnel policies and programs.
8. (h) The commission may borrow, accept, or contract for the services of personnel from any state, the United States, or any other governmental entity.
9. (i) The commission may accept for any of its purposes and functions any and all donations and grants of money, equipment, supplies, materials, and services, conditional or otherwise, from any governmental entity, and may utilize and dispose of the same.
10. (j) The commission may establish one or more offices for the transacting of its business.
11. (k) The commission shall adopt bylaws for the conduct of its business. The commission shall publish its bylaws in convenient form, and shall file a copy of the bylaws and any amendments thereto with the appropriate agency or officer in each of the party states.
12. (l) The commission annually shall make to the governor and legislature of each party state a report covering its activities for the preceding year. Any donation or grant accepted by the commission or services borrowed shall be reported in the annual report of the commission, and shall include the nature, amount, and conditions, if any, of the donation, gift, grant or services borrowed and the identity of the donor or lender. The commission may make additional reports as it may deem desirable.
(2)
1. (a) To assist in the conduct of its business when the full commission is not meeting, the commission shall have an executive committee of seven (7) members, including the chairman, vice-chairman, treasurer and four (4) other members elected annually by the commission. The executive committee, subject to the provisions of this compact and consistent with the policies of the commission, shall function as provided in the bylaws of the commission.
2. (b) The commission may establish advisory and technical committees, membership on which may include private persons and public officials, in furthering any of its activities. Such committees may consider any matter of concern to the commission, including problems of special interest to any party state and problems dealing with particular types of taxes.
3. (c) The commission may establish such additional committees as its bylaws may provide.
(3) In addition to powers conferred elsewhere in this compact, the commission shall have power to:
1. (a) Study state and local tax systems and particular types of state and local taxes;
2. (b) Develop and recommend proposals for an increase in uniformity or compatibility of state and local tax laws with a view toward encouraging the simplification and improvement of state and local tax law and administration;
3. (c) Compile and publish information as in its judgment would assist the party states in implementation of the compact and taxpayers in complying with state and local tax laws;
4. (d) Do all things necessary and incidental to the administration of its functions pursuant to this compact.
(4)
1. (a) The commission shall submit to the Governor or designated officer or officers of each party state a budget of its estimated expenditures for such period as may be required by the laws of that state for presentation to the legislature thereof.
2. (b) Each of the commission's budgets of estimated expenditures shall contain specific recommendations of the amounts to be appropriated by each of the party states. The total amount of appropriations requested under any such budget shall be apportioned among the party states as follows: one-tenth (1/10) in equal shares; and the remainder in proportion to the amount of revenue collected by each party state and its subdivisions from income taxes, capital stock taxes, gross receipts taxes, and sales and use taxes. In determining such amounts, the commission shall employ such available public sources of information as, in its judgment, present the most equitable and accurate comparisons among the party states. Each of the commission's budgets of estimated expenditures and requests for appropriations shall indicate the sources used in obtaining information employed in applying the formula contained in this paragraph.
3. (c) The commission shall not pledge the credit of any party state. The commission may meet any of its obligations in whole or in part with funds available to it under paragraph 1(i) of this article; provided that the commission takes specific action setting aside such funds prior to incurring any obligation to be met in whole or in part in such manner. Except where the commission makes use of funds available to it under paragraph 1(i), the commission shall not incur any obligation prior to the allotment of funds by the party states adequate to meet the same.
4. (d) The commission shall keep accurate accounts of all receipts and disbursements. The receipts and disbursements of the commission shall be subject to the audit and accounting procedures established under its bylaws. All receipts and disbursements of funds handled by the commission shall be audited yearly by a certified or licensed public accountant and the report of the audit shall be included in and become part of the annual report of the commission.
5. (e) The accounts of the commission shall be open at any reasonable time for inspection by duly constituted officers of the party states and by any persons authorized by the commission.
6. (f) Nothing contained in this article shall be construed to prevent commission compliance with laws relating to audit or inspection of accounts by or on behalf of any government contributing to the support of the commission.

Committees.

Powers.

Finance.

ARTICLE VII Uniform Regulations and Forms

(1) Whenever any two (2) or more party states, or subdivisions of party states, have uniform or similar provisions of law relating to an income tax, capital stock tax, gross receipts tax, sales or use tax, the commission may adopt uniform regulations for any phase of the administration of such law, including assertion of jurisdiction to tax, or prescribing uniform tax forms. The commission may also act with respect to the provisions of Article IV of this compact.
(2) Prior to the adoption of any regulation, the commission shall:
1. (a) As provided in its bylaws, hold at least one (1) public hearing on due notice to all affected party states and subdivisions thereof and to all taxpayers and other persons who have made timely request of the commission for advance notice of its regulation-making proceedings.
2. (b) Afford all affected party states and subdivisions and interested persons an opportunity to submit relevant written data and views, which shall be considered fully by the commission.
(3) The commission shall submit any regulations adopted by it to the appropriate officials of all party states and subdivisions to which they might apply. Each such state and subdivision shall consider any such regulation for adoption in accordance with its own laws and procedures.

ARTICLE VIII Interstate Audits

(1) This article shall be in force only in those party states that specifically provide therefor by statute.
(2) Any party state or subdivision thereof desiring to make or participate in an audit of any accounts, books, papers, records, or other documents may request the commission to perform the audit on its behalf. In responding to the request, the commission shall have access to and may examine, at any reasonable time, such accounts, books, papers, records, and other documents and any relevant property or stock of merchandise. The commission may enter into agreements with party states or their subdivisions for assistance in performance of the audit. The commission shall make charges, to be paid by the state or local government or governments for which it performs the service, for any audits performed by it in order to reimburse itself for the actual costs incurred in making the audit.
(3) The commission may require the attendance of any person within the state where it is conducting an audit or part thereof at a time and place fixed by it within such state for the purpose of giving testimony with respect to any account, book, paper, document, other record, property, or stock of merchandise being examined in connection with the audit. If the person is not within the jurisdiction, he may be required to attend for such purpose at any time and place fixed by the commission within the state of which he is a resident, provided that such state has adopted this article.
(4) The commission may apply to any court having power to issue compulsory process for orders in aid of its powers and responsibilities pursuant to this article and any and all such courts shall have jurisdiction to issue such orders. Failure of any person to obey any such order shall be punishable as contempt of the issuing court. If the party or subject matter on account of which the commission seeks an order is within the jurisdiction of the court to which application is made, such application may be to a court in the state or subdivision on behalf of which the audit is being made or a court in the state in which the object of the order being sought is situated. The provisions of this paragraph apply only to courts in a state that has adopted this article.
(5) The commission may decline to perform any audit requested if it finds that its available personnel or other resources are insufficient for the purpose or that, in the terms requested, the audit is impracticable of satisfactory performance. If the commission, on the basis of its experience, has reason to believe that an audit of a particular taxpayer, either at a particular time or on a particular schedule, would be of interest to a number of party states or their subdivisions, it may offer to make the audit or audits, the offer to be contingent on sufficient participation therein as determined by the commission.
(6) Information obtained by any audit pursuant to this article shall be confidential and available only for tax purposes to party states, their subdivisions, or the United States. Availability of information shall be in accordance with the laws of the states for subdivisions on whose account the commission performs the audit, and only through the appropriate agencies or officers of such states or subdivisions. Nothing in this article shall be construed to require any taxpayer to keep records for any period not otherwise required by law.
(7) Other arrangements made or authorized pursuant to law for cooperative audit by or on behalf of the party states or any of their subdivisions are not superseded or invalidated by this article.
(8) In no event shall the commission make any charge against a taxpayer for an audit.
(9) As used in this article, “tax,” in addition to the meaning ascribed to it in Article II, means any tax or license fee imposed in whole or in part for revenue purposes.

ARTICLE IX Arbitration

(1) Whenever the commission finds a need for settling disputes concerning apportionments and allocations by arbitration, it may adopt a regulation placing this article in effect, notwithstanding the provisions of Article VII.
(2) The commission shall select and maintain an arbitration panel composed of officers and employees of state and local governments and private persons who shall be knowledgeable and experienced in matters of tax law and administration.
(3) Whenever a taxpayer who has elected to employ Article IV, or whenever the laws of the party state or subdivision thereof are substantially identical with the relevant provisions of Article IV, the taxpayer, by written notice to the commission and to each party state or subdivision thereof that would be affected, may secure arbitration of an apportionment or allocation, if he is dissatisfied with the final administrative determination of the tax agency of the state or subdivision with respect thereto on the ground that it would subject him to double or multiple taxation by two (2) or more party states or subdivisions thereof. Each party state and subdivision thereof hereby consents to the arbitration as provided herein, and agrees to be bound thereby.
(4) The arbitration board shall be composed of one (1) person selected by the taxpayer, one (1) by the agency or agencies involved, and one (1) member of the commission's arbitration panel. If the agencies involved are unable to agree on the person to be selected by them, such person shall be selected by lot from the total membership of the arbitration panel. The two (2) persons selected for the board in the manner provided by the foregoing provisions of this paragraph shall jointly select the third member of the board. If they are unable to agree on the selection, the third member shall be selected by lot from among the total membership of the arbitration panel. No member of a board selected by lot shall be qualified to serve if he is an officer or employee or is otherwise affiliated with any party to the arbitration proceeding. Residence within the jurisdiction of a party to the arbitration proceeding shall not constitute affiliation within the meaning of this paragraph.
(5) The board may sit in any state or subdivision party to the proceeding, in the state of the taxpayer's incorporation, residence, or domicile, in any state where the taxpayer does business, or in any place that it finds most appropriate for gaining access to evidence relevant to the matter before it.
(6) The board shall give due notice of the times and places of its hearings. The parties shall be entitled to be heard, to present evidence, and to examine and cross-examine witnesses. The board shall act by majority vote.
(7) The board shall have power to administer oaths, take testimony, subpoena and require the attendance of witnesses and the production of accounts, books, papers, records, and other documents, and issue commissions to take testimony. Subpoenas may be signed by any member of the board. In case of failure to obey a subpoena, and upon application by the board, any judge of a court of competent jurisdiction of the state in which the board is sitting or in which the person to whom the subpoena is directed may be found may make an order requiring compliance with the subpoena, and the court may punish failure to obey the order as a contempt. The provisions of this paragraph apply only in states that have adopted this article.
(8) Unless the parties otherwise agree the expenses and other costs of the arbitration shall be assessed and allocated among the parties by the board in such manner as it may determine. The commission shall fix a schedule of compensation for members of arbitration boards and of other allowable expenses and costs. No officer or employee of a state or local government who serves as a member of a board shall be entitled to compensation therefor unless he is required on account of his service to forego the regular compensation attaching to his public employment, but any such board member shall be entitled to expenses.
(9) The board shall determine the disputed apportionment or allocation and any matters necessary thereto. The determinations of the board shall be final for purposes of making the apportionment or allocation, but for no other purpose.
(10) The board shall file with the commission and with each tax agency represented in the proceeding: the determination of the board; the board's written statement of its reasons therefor; the record of the board's proceedings; and any other documents required by the arbitration rules of the commission to be filed.
(11) The commission shall publish the determinations of boards together with the statements of the reasons therefor.
(12) The commission shall adopt and publish rules of procedure and practice and shall file a copy of such rules and of any amendment thereto with the appropriate agency or officer in each of the party states.
(13) Nothing contained herein shall prevent at any time a written compromise of any matter or matters in dispute, if otherwise lawful, by the parties to the arbitration proceeding.

ARTICLE X Entry Into Force and Withdrawal

(1) This compact shall enter into force when enacted into law by any seven (7) states. Thereafter, this compact shall become effective as to any other state upon its enactment thereof. The commission shall arrange for notification of all party states whenever there is a new enactment of the compact.
(2) Any party state may withdraw from this compact by enacting a statute repealing the same. No withdrawal shall affect any liability already incurred by or chargeable to a party state prior to the time of such withdrawal.
(3) No proceeding commenced before an arbitration board prior to the withdrawal of a state and to which the withdrawing state or any subdivision thereof is a party shall be discontinued or terminated by the withdrawal, nor shall the board thereby lose jurisdiction over any of the parties to the proceeding necessary to make a binding determination therein.
1. (a) Affect the power of any state or subdivision thereof to fix rates of taxation, except that a party state shall be obligated to implement Article III 2 of this compact.
2. (b) Apply to any tax or fixed fee imposed for the registration of a motor vehicle or any tax on motor fuel, other than a sales tax; provided that the definition of “tax” in Article VIII 9 may apply for the purposes of that article and the commission's powers of study and recommendation pursuant to Article VI 3 may apply.
3. (c) Withdraw or limit the jurisdiction of any state or local court or administrative officer or body with respect to any person, corporation, or other entity or subject matter, except to the extent that such jurisdiction is expressly conferred by or pursuant to this compact upon another agency or body.
4. (d) Supersede or limit the jurisdiction of any court of the United States.
1. Every taxpayer required to file an income tax return pursuant to provisions of the Income Tax Act of 1929, § 26-51-101 et seq., whose only activity within this state consists of sales and does not include owning or renting real estate or tangible personal property in this state and whose dollar volume of gross sales made during the last year within the State of Arkansas or its subdivisions, as the case may be, is not in excess of one hundred thousand dollars ($100,000) may elect to report any tax due the State of Arkansas on the basis of a percentage of this volume, and the Secretary of the Department of Finance and Administration is authorized to adopt rates which are calculated to produce a tax thereon which reasonably approximates the tax otherwise due under the laws of this state from these taxpayers.
2. In the event the Multistate Tax Commission shall adjust the one-hundred-thousand-dollar figure provided in this section in the manner authorized in the Multistate Tax Compact, § 26-5-101, the adjusted figure shall replace the one-hundred-thousand-dollar figure provided in this section.
1. The Governor, after consultation with representatives of local governments, may appoint a committee of three (3) persons who are representative of subdivisions of this state affected, or likely to be affected, by the Multistate Tax Compact, § 26-5-101.
2. The member representing this state on the Multistate Tax Commission, or any alternate designated by him or her to serve on the commission, shall consult regularly with these appointees, if they are named, in accordance with Article VI 1(b) of the compact.
1. The Department of Finance and Administration shall prepare an annual report detailing the activities of the Multistate Tax Commission and Arkansas's participation in the activities of the commission.
2. The report required under this section shall:
  1. Include without limitation the recommendations of the commission and any activity on Arkansas's behalf by representatives of the department; and
  2. Be filed with the President Pro Tempore of the Senate and the Speaker of the House of Representatives no later than September 30 or the next regular business day if September 30 falls on a weekend or legal holiday.
1. The Secretary of the Department of Finance and Administration shall employ one (1) or more attorneys for the Revenue Division of the Department of Finance and Administration if he or she deems it necessary and if a saving of money can be had by employing one (1) or more attorneys for the division.
2. Each division attorney may maintain and defend the interests of the division in matters before:
  1. Administrative bodies;
  2. Arkansas trial courts;
  3. The Court of Appeals;
  4. The Supreme Court;
  5. The United States Supreme Court; and
  6. All other federal courts.
1. 1. 1. The Secretary of the Department of Finance and Administration may:
      1. Institute and prosecute in his or her name as such all suits and other proceedings necessary for the collection of any taxes or fees collectible by him or her and which have become delinquent; and
      2. Defend all suits and other proceedings concerning taxes, fees, or licenses administered by the secretary.
    2. All suits and proceedings instituted by the secretary or defended by the secretary that concern taxes, fees, or licenses administered by the Revenue Division of the Department of Finance and Administration may be maintained or defended by an attorney authorized to represent the interests of the division pursuant to § 26-17-202.
  2. No deposits of advance cost shall be required of the secretary in any suit or proceedings, nor shall he or she be required to give bond for cost, indemnity, or stay as a condition to the institution of any suit or proceedings or to the issuance, service, or execution of any process in any suit or proceedings or ancillary to any suit or proceedings or to the appeal from any adverse action.
2. 1. The secretary shall not be required to advance or pay any court costs to any court clerk for the institution or prosecution of any suit filed in his or her official capacity.
  2. No bond shall be required of the secretary in obtaining restraining orders, injunctions, or any other cases in which a bond is required to be made by a litigant, including supersedeas bond upon appeal.
1. Any person, firm, or corporation found guilty of violating provisions of this subchapter and any person, firm, or corporation that shall willfully evade or willfully fail to pay any Arkansas tax except ad valorem taxes on real estate as provided by law shall be guilty of a misdemeanor.
2. 1. Any person convicted shall be fined in any sum not less than twenty-five dollars ($25.00) nor more than five thousand dollars ($5,000).
  2. Any person, firm, or corporation so convicted shall, as a part of the penalty of the conviction, pay to the state a sum equal to three (3) times the amount of taxes avoided.
  3. Any person or company official so convicted shall be punished by imprisonment in the county jail for a period of not to exceed six (6) months.
3. Each transaction shall constitute a separate offense.
1. If the Secretary of the Department of Finance and Administration, or any of his or her deputies or assistants shall collect or receive any tax, revenue, or funds by virtue of his or her official duties or position and shall neglect or fail to turn them over to the Treasurer of State within ten (10) days after the tax, revenue, or funds shall have come into his or her hands or possession, the offender shall be deemed guilty of a felony and be punished by confinement in the state penitentiary for a period of not less than one (1) year and not more than five (5) years.
2. The secretary shall be liable upon his or her official bond for all funds not turned into the Treasurer of State within ten (10) days after they may come into the hands of the secretary or any of his or her deputies or assistants.
1. The Secretary of the Department of Finance and Administration shall make daily deposits into the State Treasury of all moneys and checks collected by him or her.
2. The Treasurer of State shall promptly return to the secretary all checks which for any reason were not paid, and it shall be the duty of the secretary to collect all such checks.
1. 1. If any return, claim, statement, or other document required to be filed within a prescribed period or on or before a prescribed date under any state tax law is, after that period or date, delivered by the United States mail to the Secretary of the Department of Finance and Administration, the date of the United States postmark stamped on the cover of the return, claim, statement, or other document shall be deemed to be the date of delivery.
  2. Only the postmark of the United States Postal Service, rather than those of private postage meters, shall qualify for the provisions of this section.
2. When the last day prescribed under the authority of state tax laws for performing any act or instituting any suit falls on Saturday, Sunday, or a legal holiday, the performance of the act shall be considered timely if it is performed on the next succeeding business day which is not a Saturday, Sunday, or legal holiday.
1. Any taxpayer who willfully attempts to evade or defeat the payment of any tax, penalty, or interest due under any state tax law shall be guilty of a Class C felony.
2. Any person who willfully assists a taxpayer in evading or defeating the payment of any tax, penalty, or interest due under any state tax law shall be guilty of a Class C felony.
1. The Secretary of the Department of Finance and Administration shall:
  1. Administer and enforce the provisions of every state tax law and when necessary shall promulgate and enforce the rules;
  2. Audit and properly determine and compute the state tax payable by any taxpayer subject to taxation under any state tax law;
  3. Assess and collect any state tax; and
  4. Administer and enforce all state tax laws.
2. The secretary shall make available at cost to the general public all rules promulgated by the secretary.
3. The secretary shall provide forms, schedules, and returns for all state tax laws.
4. The secretary may accept electronic or digital signatures as binding, valid signatures on all reports, forms, or schedules required to be filed by state law.
1. 1. The Secretary of the Department of Finance and Administration shall keep and permanently preserve the original of all official rules, decisions, and orders and the effective date thereof.
  2. 1. A copy of a rule, decision, or order made by the secretary in the administration of any state tax law may be authenticated under his or her official seal.
    2. An authenticated copy is admissible in any court in this state under § 16-46-101.
    3. The secretary may charge a reasonable fee, not to exceed five dollars ($5.00), to cover the cost of authentication.
    4. Under no circumstances shall the secretary furnish copies of records which may by law be prohibited from being made public.
2. 1. The secretary may microfilm any returns, reports, records, or documents received or issued by him or her in the administration of any state tax law.
  2. The microfilm records shall be properly indexed for easy retrieval, and one (1) copy shall be placed in a fireproof vault.
  3. These records are admissible as evidence in any court in this state under § 16-46-101 and shall have the same weight and force as the original thereof.
3. If the secretary determines that a method for the reproduction of records is more practicable than the use of microfilm, he or she may use that method.
1. 1. The Secretary of the Department of Finance and Administration is the official custodian of all records and files required by any state tax law to be filed with the Secretary of the Department of Finance and Administration and is required to take all steps necessary to maintain their confidentiality.
  2. 1. 1. Except as otherwise provided by this chapter, the records and files of the Secretary of the Department of Finance and Administration concerning the administration of any state tax law are confidential and privileged.
      2. These records and files and any information obtained from these records or files or from any examination or inspection of the premises or property of any taxpayer shall not be divulged or disclosed by the Secretary of the Department of Finance and Administration or any other person who may have obtained these records and files.
    2. It is the specific intent of this chapter that all tax returns, audit reports, and information pertaining to any tax returns, whether filed by individuals, corporations, partnerships, or fiduciaries, shall not be subject to the provisions of the Freedom of Information Act of 1967, § 25-19-101 et seq.
2. The provisions against disclosures shall not apply to the following:
  1. Publication of statistics by the Secretary of the Department of Finance and Administration classified to prevent the identification of a particular taxpayer;
  2. Use of the information in records filed under any state tax law by the Secretary of the Department of Finance and Administration when conducting any audit or investigation of any taxpayer in regard to any state tax;
  3. 1. Disclosure of information to the Attorney General of this state, any prosecuting attorney, or any other individual who is empowered by law to prosecute criminal and civil violations of any state tax law when the Secretary of the Department of Finance and Administration initiates the investigation.
    2. If the prosecution is initiated by the Attorney General or a prosecuting attorney, the Secretary of the Department of Finance and Administration shall not disclose any information unless required by subpoena issued by a circuit court.
    3. Information may be introduced as evidence by the Attorney General, a prosecuting attorney, or other individual so empowered when the individual is prosecuting any civil or criminal violation of state tax law;
  4. Disclosure compelled by any Arkansas circuit court, the Supreme Court, the Court of Appeals, or by any federal court of information involved in any case or controversy before that court;
  5. Disclosure by the taxpayer or the taxpayer's authorized agent or by the Secretary of the Department of Finance and Administration, at the taxpayer's request, of any information which the Secretary of the Department of Finance and Administration has concerning that taxpayer;
  6. Disclosure by the Secretary of the Department of Finance and Administration, at the Secretary of the Department of Finance and Administration's discretion, of information from the records of any state tax law to comparable officials of any other state or the United States who are charged with the administration of a similar tax;
  7. Disclosure of motor vehicle titling and registration information, all licenses and permits issued to owners and operators of coin-operated amusement machines pursuant to §§ 26-57-402, 26-57-408 — 26-57-421, and 26-77-303, and tax records, files, and other information relating to sales of aviation fuel at airports and other aviation fuel outlets;
  8. Disclosure of information other than income tax information at an administrative hearing held regarding the issuance, cancellation, revocation, or suspension of licenses or permits issued by the Secretary of the Department of Finance and Administration or any other state agency or department;
  9. 1. Disclosure to the Student Loan Authority Division of the Arkansas Development Finance Authority, the Division of Higher Education, the Student Loan Guarantee Foundation of Arkansas, or any Arkansas public institution of higher education of the last known address or whereabouts or the last known employer of any person from whom these agencies are charged with collecting a student loan or other student indebtedness.
    2. In providing such information, the Secretary of the Department of Finance and Administration shall not allow the Student Loan Authority Division of the Arkansas Development Finance Authority, the Student Loan Guarantee Foundation of Arkansas, the Division of Higher Education, or any Arkansas public institution of higher education to examine the tax return;
  10. 1. In order to ensure proper payment to vendors by all agencies of state government or by county governments or city governments, information about the receipt or nonreceipt of sales tax permits by vendors must be made available by the Secretary of the Department of Finance and Administration upon request by these agencies of state government or by county governments or city governments.
    2. Therefore, notwithstanding any provision of this chapter or any other law to the contrary, in instances when state agencies, boards, commissions, and other branches of state government or county governments or city governments identify to the Secretary of the Department of Finance and Administration the identity of vendors receiving payments and ask the Secretary of the Department of Finance and Administration whether these vendors have been issued sales tax permits, the Secretary of the Department of Finance and Administration shall answer these inquiries;
  11. Disclosure of the name of any taxpayer and the amount of any tax credit, tax rebate, tax discount, or commission for the collection of a tax received by such taxpayer from the following tax incentive provisions:
    1. Discount for prompt payment, § 26-52-503;
    2. Economic Investment Tax Credit Act, § 26-52-701 et seq. [repealed];
    3. Steel mill tax incentives, §§ 26-52-901 — 26-52-903 and 26-52-912 — 26-52-914;
    4. Motor fuel shrinkage allowance, § 26-55-230(a)(1)(F);
    5. Commission for sale of stamps for cigarettes and the collection of cigarette taxes, § 26-57-236(f);
    6. Credit on severance tax of oil producer, § 26-58-204;
    7. Credit on severance tax of gas producer, § 26-58-205;
    8. Refund of motor fuel tax by municipal buses, § 26-55-401 et seq.;
    9. Refund of distillate special fuel tax to interstate users, §§ 26-56-214 and 26-56-215;
    10. Credit against severance tax for the discovery of a commercial oil pool, § 15-72-706;
    11. Native wines — subsidies, § 3-5-1001 et seq.;
    12. Native wines — incentive grants, § 3-5-901 et seq.;
    13. Consolidated Incentive Act of 2003, § 15-4-2701 et seq.; and
    14. 1. Any other tax incentive program enacted after January 1, 1991, that provides a tax credit, tax rebate, tax discount, or commission for the collection of a tax, with the exception of any benefits under the income tax laws of this state.
      2. However, information that is subject to disclosure under the provisions of this subdivision (b)(11) shall not be disclosed if such information would give an advantage to competitors or bidders or if such information is exempt from disclosure under any other provision of law that exempts specified information from disclosure under any such law;
  12. Disclosure of the lists required by:
    1. Section 3-2-205(e)(4), reporting to the Alcoholic Beverage Control Division and the Alcoholic Beverage Control Board those taxpayers who hold a permit to sell alcoholic beverages and who are delinquent in state taxes; and
    2. Section 26-57-257(o)(2), reporting to the Arkansas Tobacco Control Board those taxpayers who hold a permit to sell tobacco products and cigarettes and who are delinquent in state taxes;
  13. Disclosure to the Tax Division of the Arkansas Public Service Commission of information contained in motor fuel tax records necessary to assess motor carrier companies for ad valorem taxation;
  14. 1. Disclosure of the following information from corporate franchise tax reports:
      1. The name and address of the corporation;
      2. The name of the corporation's president, vice president, secretary, treasurer, and controller;
      3. The total authorized capital stock with par value;
      4. The total issued and outstanding capital stock with par value; and
      5. The state of incorporation.
    2. In the case of a franchise tax report filed by an organization formed under the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq., the confidentiality provision of subsection (a) of this section shall apply to the names of members of the organization, except those designated in the organization's franchise tax report as a manager, president, vice president, secretary, treasurer, or controller of the organization, unless the organization has no registered agent for service of process, in which case the confidentiality provisions of subsection (a) of this section shall not apply;
  15. Disclosure compelled by a subpoena issued by a state or federal prosecutor or grand jury or other state or federal entity with subpoena power;
  16. 1. Disclosure to county assessors of information that may affect personal property tax assessments, including information obtained during the course of audits or investigations concerning motor vehicles, boats, trailers, airplanes, or other items of personal property that may be subject to assessment in that county.
    2. This information may be released only following completion of an audit or investigation by the Secretary of the Department of Finance and Administration and following a determination by the Secretary of the Department of Finance and Administration that there is a strong possibility the taxpayer has failed to properly assess the taxpayer's personal property in the county.
    3. In providing this information, the Secretary of the Department of Finance and Administration shall not allow the county assessors to examine any tax returns or audit records;
  17. 1. For the purpose of the timely and accurate collection of local sales and use tax and state income tax withholding for employees, disclosure of the name and address of a taxpayer that has failed three (3) times within any consecutive twenty-four-month period to either report or remit state or local gross receipts or compensating use tax or state income tax withholding for employees and has been served with a business closure order under § 26-18-1001 et seq.
    2. Disclosure shall be made by posting weekly on the website maintained by the Department of Finance and Administration the business name, business address, and city and county in which the business is located as it appears on the sales tax permit or the state income tax withholding for employees registration of each taxpayer identified in subdivision (b)(17)(A) of this section.
    3. The information posted on the website for a taxpayer shall remain on the website until that taxpayer is no longer subject to the business closure provisions of § 26-18-1001 et seq.;
  18. 1. Disclosure to the Arkansas Economic Development Commission of any information requested regarding a tax incentive program that provides a tax credit, tax rebate, tax discount, or other economic incentive that is jointly administered by the Arkansas Economic Development Commission and the department.
    2. Any information received by the Arkansas Economic Development Commission under this section shall remain confidential and is not subject to disclosure except in accordance with this section;
  19. Disclosure of information to a bankruptcy trustee or to an employee of a bankruptcy trustee;
  20. 1. To perform audit and compliance duties, disclosure to the Division of Workforce Services of withholding tax information reported by companies doing business in Arkansas, including without limitation taxpayer names, taxpayer addresses, tax identification numbers, and tax withholding information.
    2. Information received by the Division of Workforce Services under this section shall remain confidential and is not subject to disclosure except in accordance with this section;
  21. Disclosure of information, including disclosure as required under § 26-55-232, regarding delinquent motor fuel excise tax levied by the Motor Fuel Tax Law, § 26-55-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-55-222 for the taxpayer that owes the delinquent tax;
  22. Disclosure of information regarding delinquent distillate special fuel tax levied by § 26-56-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-56-204 for the taxpayer that owes the delinquent tax;
  23. Disclosure of information regarding delinquent liquefied gas special fuel tax levied by § 26-56-301 et seq. and by § 26-56-601 et seq. to a bonding company that provides the surety bond required by § 26-56-303 for the taxpayer that owes the delinquent tax;
  24. 1. Disclosure of information in the books of the department concerning a taxpayer by the department to a joint auditor employed under the authority of § 26-75-619 when the joint auditor requests the information.
    2. Information received by the joint auditor under subdivision (b)(24)(A) of this section shall remain confidential and is not subject to disclosure except in accordance with this section; and
  25. Disclosure of information related to a business closure order under § 26-18-1001 et seq. to the Office of State Procurement for the purpose of carrying out §§ 19-11-281 and 19-11-1015.
3. The provisions of this section shall be strictly interpreted and shall not permit any other disclosure of tax information concerning a taxpayer, whether the taxpayer is an individual, a corporation, a partnership, or a fiduciary, that is contained in the records and files of the Secretary of the Department of Finance and Administration relating to income tax or any other state tax administered under this chapter.
4. 1. Any person who knowingly discloses information in violation of a provision of this section shall be guilty of a Class A misdemeanor.
  2. An employee of the state who is convicted of violating a provision of this section shall be discharged from employment in addition to any fine or imprisonment.
5. Any person who knowingly obtains or attempts to obtain any of the confidential and privileged records and files of the Secretary of the Department of Finance and Administration who is not so permitted by law is guilty of a Class A misdemeanor.
6. The Secretary of the Department of Finance and Administration shall report all violations of this section to the appropriate prosecuting attorney in this state.
7. 1. The Secretary of the Department of Finance and Administration shall promulgate such rules as are necessary to establish a reasonable procedure for making requests for and release of information under subdivision (b)(11) of this section, for allowing a taxpayer reasonable notice in advance of the release of the requested information, for a period of time up to seven (7) days from the date a request for information is made to provide notice and make necessary determinations, and to provide the methods by which the Secretary of the Department of Finance and Administration shall determine if the information requested is subject to disclosure under Arkansas law.
  2. The provisions of this section shall solely govern the release of information under subdivision (b)(11) of this section, and the release of information shall not be subject to the Freedom of Information Act of 1967, § 25-19-101 et seq.
8. 1. Upon the request of a county government or a city government, the Secretary of the Department of Finance and Administration shall provide a list of vendors within the requesting county or city who hold permits issued pursuant to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
  2. Requests made pursuant to this subsection must be made in writing by an official of the county government or city government prior to August 1 of the calendar year for which the list is requested.
  3. Lists provided pursuant to the provisions of this subsection will be made available following October 1 of the year requested and will be compiled from the list of all valid sales tax permit holders within the requesting county or city as of September 1 of the year requested.
  4. 1. A reasonable fee based upon the number of permit holders within the requesting city or county may be charged for the permit search made and reported to the requesting county or city government.
    2. Fees collected under the provisions of this subsection shall be deposited into the State Central Services Fund to be treated as a refund of expenditures to reimburse the department for the costs of providing the requested information.
9. 1. The Secretary of the Department of Finance and Administration may disclose information from a return filed by a person, partnership, corporation, trust, or estate to any of the parties who signed the return:
    1. Who is the administrator, executor, or trustee of the estate filing the return;
    2. Who was a member of the partnership filing the return during any part of the period covered by the return;
    3. Who is a trustee or beneficiary of the trust filing the return;
    4. Who is an officer or bona fide shareholder of record owning one percent (1%) or more of the outstanding stock of the corporation filing the return;
    5. Who was a shareholder during any part of the period covered by the return filed by a Subchapter S corporation;
    6. Who was a member of the partnership during any part of the period covered by the partnership return; or
    7. Who is the attorney in fact duly authorized in writing by any of the persons described in subdivisions (i)(1)(A)-(F) of this section.
  2. The Secretary of the Department of Finance and Administration may also disclose all information concerning the collection activity related to a tax return to any party who signed the return.
  3. The Secretary of the Department of Finance and Administration shall promulgate such rules as are necessary to establish a reasonable procedure for making requests for and for the release of information under this section.
10. 1. The General Assembly finds that:
    1. The collection of cigarette and other tobacco products taxes and the enforcement of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., §§ 26-57-260 and 26-57-261, and §§ 26-57-1301 — 26-57-1307, affect the fiscal soundness of the state and the public health;
    2. The Attorney General and the Director of Arkansas Tobacco Control play an important role in the enforcement of the state's tobacco laws; and
    3. The sharing of documents and other information between the Secretary of the Department of Finance and Administration, the Attorney General, and the director will put the state in a better position to prevent tobacco diversion and prevent cigarettes from being sold to youth and an already addicted adult population.
  2. The Secretary of the Department of Finance and Administration may disclose documents and other information submitted by stamp deputies appointed under § 26-57-236 or those persons licensed or permitted under the terms of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., to the Attorney General or the director upon the request of the Attorney General or the director.
  3. 1. The documents and other information provided under this subsection shall not be disclosed by the Attorney General or the director to a person other than a person specifically authorized by the Attorney General or the director to receive the documents or other information.
    2. However, the Attorney General and the director may share the documents and other information provided under this subsection with the taxing authorities or law enforcement agencies of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the documents and other information, if the parties agree to the confidentiality requirements under this subsection.
  4. 1. The Attorney General and the director may use the documents and other information provided under this subsection by the Secretary of the Department of Finance and Administration in proceedings before any court.
    2. 1. However, the documents and other information shall not be presented in court except with the approval of the court in which the action is pending and after adequate notice to the person who initially furnished the documents or other information to the Secretary of the Department of Finance and Administration.
      2. When confidential information is presented with court approval, the documents and other information and the related evidence shall be held in camera and shall be part of the court record or trial transcript only if under seal.
1. 1. The Secretary of the Department of Finance and Administration is the official custodian of all records and files required by any state tax law to be filed with the Secretary of the Department of Finance and Administration and is required to take all steps necessary to maintain their confidentiality.
  2. 1. 1. Except as otherwise provided by this chapter, the records and files of the Secretary of the Department of Finance and Administration concerning the administration of any state tax law are confidential and privileged.
      2. These records and files and any information obtained from these records or files or from any examination or inspection of the premises or property of any taxpayer shall not be divulged or disclosed by the Secretary of the Department of Finance and Administration or any other person who may have obtained these records and files.
    2. It is the specific intent of this chapter that all tax returns, audit reports, and information pertaining to any tax returns, whether filed by individuals, corporations, partnerships, or fiduciaries, shall not be subject to the provisions of the Freedom of Information Act of 1967, § 25-19-101 et seq.
2. The provisions against disclosures shall not apply to the following:
  1. Publication of statistics by the Secretary of the Department of Finance and Administration classified to prevent the identification of a particular taxpayer;
  2. Use of the information in records filed under any state tax law by the Secretary of the Department of Finance and Administration when conducting any audit or investigation of any taxpayer in regard to any state tax;
  3. 1. Disclosure of information to the Attorney General of this state, any prosecuting attorney, or any other individual who is empowered by law to prosecute criminal and civil violations of any state tax law when the Secretary of the Department of Finance and Administration initiates the investigation.
    2. If the prosecution is initiated by the Attorney General or a prosecuting attorney, the Secretary of the Department of Finance and Administration shall not disclose any information unless required by subpoena issued by a circuit court.
    3. Information may be introduced as evidence by the Attorney General, a prosecuting attorney, or other individual so empowered when the individual is prosecuting any civil or criminal violation of state tax law;
  4. Disclosure compelled by any Arkansas circuit court, the Supreme Court, the Court of Appeals, or by any federal court of information involved in any case or controversy before that court;
  5. Disclosure by the taxpayer or the taxpayer's authorized agent or by the Secretary of the Department of Finance and Administration, at the taxpayer's request, of any information which the Secretary of the Department of Finance and Administration has concerning that taxpayer;
  6. Disclosure by the Secretary of the Department of Finance and Administration, at the Secretary of the Department of Finance and Administration's discretion, of information from the records of any state tax law to comparable officials of any other state or the United States who are charged with the administration of a similar tax;
  7. Disclosure of motor vehicle titling and registration information, all licenses and permits issued to owners and operators of coin-operated amusement machines pursuant to §§ 26-57-402, 26-57-408 — 26-57-421, and 26-77-303, and tax records, files, and other information relating to sales of aviation fuel at airports and other aviation fuel outlets;
  8. Disclosure of information other than income tax information at an administrative hearing held regarding the issuance, cancellation, revocation, or suspension of licenses or permits issued by the Secretary of the Department of Finance and Administration or any other state agency or department;
  9. 1. Disclosure to the Student Loan Authority Division of the Arkansas Development Finance Authority, the Division of Higher Education, the Student Loan Guarantee Foundation of Arkansas, or any Arkansas public institution of higher education of the last known address or whereabouts or the last known employer of any person from whom these agencies are charged with collecting a student loan or other student indebtedness.
    2. In providing such information, the Secretary of the Department of Finance and Administration shall not allow the Student Loan Authority Division of the Arkansas Development Finance Authority, the Student Loan Guarantee Foundation of Arkansas, the Division of Higher Education, or any Arkansas public institution of higher education to examine the tax return;
  10. 1. In order to ensure proper payment to vendors by all agencies of state government or by county governments or city governments, information about the receipt or nonreceipt of sales tax permits by vendors must be made available by the Secretary of the Department of Finance and Administration upon request by these agencies of state government or by county governments or city governments.
    2. Therefore, notwithstanding any provision of this chapter or any other law to the contrary, in instances when state agencies, boards, commissions, and other branches of state government or county governments or city governments identify to the Secretary of the Department of Finance and Administration the identity of vendors receiving payments and ask the Secretary of the Department of Finance and Administration whether these vendors have been issued sales tax permits, the Secretary of the Department of Finance and Administration shall answer these inquiries;
  11. Disclosure of the name of any taxpayer and the amount of any tax credit, tax rebate, tax discount, or commission for the collection of a tax received by such taxpayer from the following tax incentive provisions:
    1. Discount for prompt payment, § 26-52-503;
    2. Economic Investment Tax Credit Act, § 26-52-701 et seq. [repealed];
    3. Steel mill tax incentives, §§ 26-52-901 — 26-52-903 and 26-52-912 — 26-52-914;
    4. Motor fuel shrinkage allowance, § 26-55-230(a)(1)(F);
    5. Commission for sale of stamps for cigarettes and the collection of cigarette taxes, § 26-57-236(f);
    6. Credit on severance tax of oil producer, § 26-58-204;
    7. Credit on severance tax of gas producer, § 26-58-205;
    8. Refund of motor fuel tax by municipal buses, § 26-55-401 et seq.;
    9. Refund of distillate special fuel tax to interstate users, §§ 26-56-214 and 26-56-215;
    10. Credit against severance tax for the discovery of a commercial oil pool, § 15-72-706;
    11. Native wines — subsidies, § 3-5-1001 et seq.;
    12. Native wines — incentive grants, § 3-5-901 et seq.;
    13. Consolidated Incentive Act of 2003, § 15-4-2701 et seq.; and
    14. 1. Any other tax incentive program enacted after January 1, 1991, that provides a tax credit, tax rebate, tax discount, or commission for the collection of a tax, with the exception of any benefits under the income tax laws of this state.
      2. However, information that is subject to disclosure under the provisions of this subdivision (b)(11) shall not be disclosed if such information would give an advantage to competitors or bidders or if such information is exempt from disclosure under any other provision of law that exempts specified information from disclosure under any such law;
  12. Disclosure of the lists required by:
    1. Section 3-2-205(e)(4), reporting to the Alcoholic Beverage Control Division and the Alcoholic Beverage Control Board those taxpayers who hold a permit to sell alcoholic beverages and who are delinquent in state taxes; and
    2. Section 26-57-257(o)(2), reporting to the Arkansas Tobacco Control Board those taxpayers who hold a permit to sell tobacco products and cigarettes and who are delinquent in state taxes;
  13. Disclosure to the Tax Division of the Arkansas Public Service Commission of information contained in motor fuel tax records necessary to assess motor carrier companies for ad valorem taxation;
  14. 1. Disclosure of the following information concerning corporate franchise tax:
      1. The name and address of a corporation;
      2. The name of a corporation's president, vice president, secretary, treasurer, and controller;
      3. The total authorized capital stock with par value;
      4. The total issued and outstanding capital stock with par value;
      5. The state of incorporation; and
      6. Information necessary to report to the Secretary of State, the Bank Commissioner, the Professional Bail Bond Company and Professional Bail Bondsman Licensing Board, the Insurance Commissioner, or any other state agency or official authorized to take action against a corporation for failure to take any action required under the Arkansas Corporate Franchise Tax Act of 1979, § 26-54-101 et seq., including without limitation information concerning whether a corporation has filed a franchise tax report, whether a corporation has paid franchise tax due, and the name and address of the registered agent or principal office of the corporation.
    2. In the case of a franchise tax report filed by an organization formed under the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq., the confidentiality provision of subsection (a) of this section shall apply to the names of members of the organization, except those designated in the organization's franchise tax report as a manager, president, vice president, secretary, treasurer, or controller of the organization, unless the organization has:
      1. No registered agent for service of process, in which case the confidentiality provisions of subsection (a) of this section shall not apply; or
      2. Failed to take an action required under the Arkansas Corporate Franchise Tax Act of 1979, § 26-54-101 et seq., in which case the disclosures identified in subdivision (b)(14)(A) of this section are allowed;
  15. Disclosure compelled by a subpoena issued by a state or federal prosecutor or grand jury or other state or federal entity with subpoena power;
  16. 1. Disclosure to county assessors of information that may affect personal property tax assessments, including information obtained during the course of audits or investigations concerning motor vehicles, boats, trailers, airplanes, or other items of personal property that may be subject to assessment in that county.
    2. This information may be released only following completion of an audit or investigation by the Secretary of the Department of Finance and Administration and following a determination by the Secretary of the Department of Finance and Administration that there is a strong possibility the taxpayer has failed to properly assess the taxpayer's personal property in the county.
    3. In providing this information, the Secretary of the Department of Finance and Administration shall not allow the county assessors to examine any tax returns or audit records;
  17. 1. For the purpose of the timely and accurate collection of local sales and use tax and state income tax withholding for employees, disclosure of the name and address of a taxpayer that has failed three (3) times within any consecutive twenty-four-month period to either report or remit state or local gross receipts or compensating use tax or state income tax withholding for employees and has been served with a business closure order under § 26-18-1001 et seq.
    2. Disclosure shall be made by posting weekly on the website maintained by the Department of Finance and Administration the business name, business address, and city and county in which the business is located as it appears on the sales tax permit or the state income tax withholding for employees registration of each taxpayer identified in subdivision (b)(17)(A) of this section.
    3. The information posted on the website for a taxpayer shall remain on the website until that taxpayer is no longer subject to the business closure provisions of § 26-18-1001 et seq.;
  18. 1. Disclosure to the Arkansas Economic Development Commission of any information requested regarding a tax incentive program that provides a tax credit, tax rebate, tax discount, or other economic incentive that is jointly administered by the Arkansas Economic Development Commission and the department.
    2. Any information received by the Arkansas Economic Development Commission under this section shall remain confidential and is not subject to disclosure except in accordance with this section;
  19. Disclosure of information to a bankruptcy trustee or to an employee of a bankruptcy trustee;
  20. 1. To perform audit and compliance duties, disclosure to the Division of Workforce Services of withholding tax information reported by companies doing business in Arkansas, including without limitation taxpayer names, taxpayer addresses, tax identification numbers, and tax withholding information.
    2. Information received by the Division of Workforce Services under this section shall remain confidential and is not subject to disclosure except in accordance with this section;
  21. Disclosure of information, including disclosure as required under § 26-55-232, regarding delinquent motor fuel excise tax levied by the Motor Fuel Tax Law, § 26-55-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-55-222 for the taxpayer that owes the delinquent tax;
  22. Disclosure of information regarding delinquent distillate special fuel tax levied by § 26-56-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-56-204 for the taxpayer that owes the delinquent tax;
  23. Disclosure of information regarding delinquent liquefied gas special fuel tax levied by § 26-56-301 et seq. and by § 26-56-601 et seq. to a bonding company that provides the surety bond required by § 26-56-303 for the taxpayer that owes the delinquent tax;
  24. 1. Disclosure of information in the books of the department concerning a taxpayer by the department to a joint auditor employed under the authority of § 26-75-619 when the joint auditor requests the information.
    2. Information received by the joint auditor under subdivision (b)(24)(A) of this section shall remain confidential and is not subject to disclosure except in accordance with this section; and
  25. Disclosure of information related to a business closure order under § 26-18-1001 et seq. to the Office of State Procurement for the purpose of carrying out §§ 19-11-281 and 19-11-1015.
3. The provisions of this section shall be strictly interpreted and shall not permit any other disclosure of tax information concerning a taxpayer, whether the taxpayer is an individual, a corporation, a partnership, or a fiduciary, that is contained in the records and files of the Secretary of the Department of Finance and Administration relating to income tax or any other state tax administered under this chapter.
4. 1. Any person who knowingly discloses information in violation of a provision of this section shall be guilty of a Class A misdemeanor.
  2. An employee of the state who is convicted of violating a provision of this section shall be discharged from employment in addition to any fine or imprisonment.
5. Any person who knowingly obtains or attempts to obtain any of the confidential and privileged records and files of the Secretary of the Department of Finance and Administration who is not so permitted by law is guilty of a Class A misdemeanor.
6. The Secretary of the Department of Finance and Administration shall report all violations of this section to the appropriate prosecuting attorney in this state.
7. 1. The Secretary of the Department of Finance and Administration shall promulgate such rules as are necessary to establish a reasonable procedure for making requests for and release of information under subdivision (b)(11) of this section, for allowing a taxpayer reasonable notice in advance of the release of the requested information, for a period of time up to seven (7) days from the date a request for information is made to provide notice and make necessary determinations, and to provide the methods by which the Secretary of the Department of Finance and Administration shall determine if the information requested is subject to disclosure under Arkansas law.
  2. The provisions of this section shall solely govern the release of information under subdivision (b)(11) of this section, and the release of information shall not be subject to the Freedom of Information Act of 1967, § 25-19-101 et seq.
8. 1. Upon the request of a county government or a city government, the Secretary of the Department of Finance and Administration shall provide a list of vendors within the requesting county or city who hold permits issued pursuant to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
  2. Requests made pursuant to this subsection must be made in writing by an official of the county government or city government prior to August 1 of the calendar year for which the list is requested.
  3. Lists provided pursuant to the provisions of this subsection will be made available following October 1 of the year requested and will be compiled from the list of all valid sales tax permit holders within the requesting county or city as of September 1 of the year requested.
  4. 1. A reasonable fee based upon the number of permit holders within the requesting city or county may be charged for the permit search made and reported to the requesting county or city government.
    2. Fees collected under the provisions of this subsection shall be deposited into the State Central Services Fund to be treated as a refund of expenditures to reimburse the department for the costs of providing the requested information.
9. 1. The Secretary of the Department of Finance and Administration may disclose information from a return filed by a person, partnership, corporation, trust, or estate to any of the parties who signed the return:
    1. Who is the administrator, executor, or trustee of the estate filing the return;
    2. Who was a member of the partnership filing the return during any part of the period covered by the return;
    3. Who is a trustee or beneficiary of the trust filing the return;
    4. Who is an officer or bona fide shareholder of record owning one percent (1%) or more of the outstanding stock of the corporation filing the return;
    5. Who was a shareholder during any part of the period covered by the return filed by a Subchapter S corporation;
    6. Who was a member of the partnership during any part of the period covered by the partnership return; or
    7. Who is the attorney in fact duly authorized in writing by any of the persons described in subdivisions (i)(1)(A)-(F) of this section.
  2. The Secretary of the Department of Finance and Administration may also disclose all information concerning the collection activity related to a tax return to any party who signed the return.
  3. The Secretary of the Department of Finance and Administration shall promulgate such rules as are necessary to establish a reasonable procedure for making requests for and for the release of information under this section.
10. 1. The General Assembly finds that:
    1. The collection of cigarette and other tobacco products taxes and the enforcement of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., §§ 26-57-260 and 26-57-261, and §§ 26-57-1301 — 26-57-1307, affect the fiscal soundness of the state and the public health;
    2. The Attorney General and the Director of Arkansas Tobacco Control play an important role in the enforcement of the state's tobacco laws; and
    3. The sharing of documents and other information between the Secretary of the Department of Finance and Administration, the Attorney General, and the director will put the state in a better position to prevent tobacco diversion and prevent cigarettes from being sold to youth and an already addicted adult population.
  2. The Secretary of the Department of Finance and Administration may disclose documents and other information submitted by stamp deputies appointed under § 26-57-236 or those persons licensed or permitted under the terms of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., to the Attorney General or the director upon the request of the Attorney General or the director.
  3. 1. The documents and other information provided under this subsection shall not be disclosed by the Attorney General or the director to a person other than a person specifically authorized by the Attorney General or the director to receive the documents or other information.
    2. However, the Attorney General and the director may share the documents and other information provided under this subsection with the taxing authorities or law enforcement agencies of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the documents and other information, if the parties agree to the confidentiality requirements under this subsection.
  4. 1. The Attorney General and the director may use the documents and other information provided under this subsection by the Secretary of the Department of Finance and Administration in proceedings before any court.
    2. 1. However, the documents and other information shall not be presented in court except with the approval of the court in which the action is pending and after adequate notice to the person who initially furnished the documents or other information to the Secretary of the Department of Finance and Administration.
      2. When confidential information is presented with court approval, the documents and other information and the related evidence shall be held in camera and shall be part of the court record or trial transcript only if under seal.
1. Any bond required by any state tax law shall be subject to the approval of the Secretary of the Department of Finance and Administration as to form, sufficiency, value, amount, stability, and other features necessary to provide a guarantee of payment of the tax due the state under this chapter.
2. Where a bond is required for the purpose of insuring any state tax law, and written notice of termination is required before the bond can be terminated, the party issuing the bond cannot be required to provide the written notice of termination more than sixty (60) days prior to the date the bond is to be terminated.
3. The length of time required for the notice of termination shall be calculated from the date of receipt of the notice of termination, rather than the date of mailing.
4. The term “bond” shall mean any bond, letter of credit, or assignment of a certificate of deposit.
1. 1. 1. In the administration of any state tax law, the Secretary of the Department of Finance and Administration, for the purpose of determining the accuracy of a return or fixing any liability under any state tax law, may make an examination or investigation of the place of business, the tangible personal property, equipment, and facilities, and the books, records, papers, vouchers, accounts, and documents of any taxpayer or other person.
    2. Every taxpayer or other person and his or her agents and employees shall exhibit to the secretary these places and items and facilitate any examination or investigation.
  2. 1. The secretary may employ proper and reasonable audit methods as he or she deems necessary, including the use of sampling.
    2. If sampling is to be employed as an audit method, the taxpayer's consent to the sampling technique must be obtained at the commencement of the audit.
2. No taxpayer shall be subjected to unnecessary examination or investigations, and only one (1) inspection of a taxpayer's books of account shall be made for each taxable year unless the taxpayer requests otherwise or unless the secretary, after investigation, notifies the taxpayer in writing that an additional inspection is necessary.
3. 1. When conducting an investigation or an audit of any taxpayer, the secretary may, in his or her discretion, examine the records and files of any person, except when privileged by law, any other business, institution, financial institution, the records of any state agency, agency of the United States Government, or agency of any other state when permitted by agreement or reciprocity.
  2. 1. The secretary may compel production of these records by summons.
    2. The summons may be served directly by the secretary.
4. In the administration of any state tax law, the secretary may:
  1. Administer oaths, conduct hearings, and compel by summons the attendance of witnesses, testimony, and the production of any books, records, papers, or other data of any person or taxpayer; or
  2. 1. Examine under oath any person regarding the business of any taxpayer concerning any matter incident to the administration of any state tax law.
    2. 1. The fees of witnesses required by the secretary to attend any hearing shall be the same as those allowed to the witnesses appearing before circuit courts of this state.
      2. The fees shall be paid in the manner provided for the payment of other expenses incident to the administration of any state tax law.
5. 1. The investigation may extend to any person that the secretary determines has access to information which may be relevant to the examination or investigation.
  2. When any summons requiring the production of records as described in subsection (c) of this section is served on a third-party recordkeeper, written notice of the summons shall be mailed to the taxpayer that his or her records are being summoned, at least fourteen (14) days prior to the date fixed in the summons as the day for the examination of the records.
  3. Notice to the taxpayer required by this section is sufficient if it is mailed by certified mail to the last address on record with the secretary.
6. When the secretary has the power to issue a summons for his or her own investigative or auditing purposes, then the secretary shall honor any reasonable request by any taxpayer to issue a summons on the taxpayer's behalf.
7. 1. The secretary or the taxpayer may apply to the circuit court of the county of the taxpayer's residence, place of business, or county where the summons can be served as with any other case at law for any order compelling the production of the summoned records.
  2. Failure to comply with the order of the court for the production of records may be punished by the court as for contempt.
8. 1. The cost of producing records of a third party required by a summons shall be borne by the taxpayer if he or she requests the summons to be issued.
  2. 1. If the secretary initiates the summons for third-party records, the secretary shall bear the reasonable cost of producing the records.
    2. The secretary may later assess the cost against any delinquent or deficient taxpayer as determined by the records.
9. 1. The secretary may examine the books, records, and other documents of transportation companies, agencies, firms, or persons that conduct business by truck, rail, water, airplane, or otherwise in order to determine any sales or use tax due on out-of-state purchases and to determine which dealers are importing or shipping articles of tangible personal property and are liable for any state tax.
  2. If the transportation company, agency, firm, or person refuses to allow an examination of its books, records, and other documents, the secretary may petition the appropriate circuit court to require the transportation company, agency, firm, or person to show cause as to why its books, records, and other documents should not be examined and why a bond should not be required in an amount not to exceed two thousand dollars ($2,000) for a period of not more than one (1) year to guarantee compliance with the provisions of this section.
  3. Refusal to permit the secretary to examine books, records, and other documents pursuant to this section is a Class C misdemeanor.
1. 1. Except as otherwise provided in this chapter, no assessment of any tax levied under the state tax law shall be made after the expiration of three (3) years from the date the return was required to be filed or the date the return was filed, whichever period expires later.
  2. The Secretary of the Department of Finance and Administration shall not begin court proceedings after the expiration of the three-year period unless there has been a previous assessment for the collection of the tax.
2. 1. Notwithstanding subsection (a) of this section, if the amount of taxable income or taxable estate for a taxpayer for a year, as returned to the United States Department of the Treasury, is changed and corrected by the Commissioner of Internal Revenue or an officer of the United States of competent authority, the taxpayer, within one hundred eighty (180) days from the receipt of the notice and demand for payment by the Internal Revenue Service, shall report to the Secretary of the Department of Finance and Administration the corrected federal tax, taxable income, or taxable estate for the taxable period covered by the change on an amended Arkansas income tax return.
  2. 1. If there is an additional state tax due from the taxpayer because of the correction by the Internal Revenue Service, the additional state tax resulting from the issues that are included in the correction shall be assessed by the Secretary of the Department of Finance and Administration within one (1) year from the filing of the amended Arkansas income tax return by the taxpayer.
    2. However, if a taxpayer fails to notify the Secretary of the Department of Finance and Administration of the correction as required by this subsection, no assessment of additional state tax due from the taxpayer because of the correction by the Internal Revenue Service shall be made by the Secretary of the Department of Finance and Administration after the expiration of three (3) years from the date the amended return was required to be filed.
    3. If the taxpayer appeals the assessment made by the Internal Revenue Service, the Secretary of the Department of Finance and Administration has three (3) years from the date of the final Internal Revenue Service assessment or date of payment of the federal assessment by the taxpayer, whichever of the two (2) periods expires later, in which to make an assessment.
  3. 1. Notwithstanding subsection (i) of this section, if the correction by the Internal Revenue Service results in an overpayment of state income tax for the taxable year for which the correction is made, the taxpayer may receive a refund of the overpaid income tax for that year resulting from the issues that are included in the correction upon the filing of the amended return within one hundred eighty (180) days from receipt of the notice from the Internal Revenue Service.
    2. A refund shall not be paid if the amended return is filed on or after the one hundred eighty-first day following receipt of the notice from the Internal Revenue Service unless the amended return is filed within three (3) years from the time the original return was filed or two (2) years from the time the income tax due on the original return was paid, whichever of the periods expires later.
  4. A change or correction to taxable income made by the Internal Revenue Service that results in additional state income tax due from the taxpayer does not entitle the Secretary of the Department of Finance and Administration to issue an assessment unless fewer than three (3) years have elapsed from the date the original return for the year not included in the notice was required to be filed or the date the original return was filed, whichever of the periods expires later, for:
    1. A tax year that is not included in the notice of change or correction; or
    2. An issue that is not included in the notice of change or correction.
  5. A change or correction to taxable income made by the Internal Revenue Service that results in a refund to the taxpayer does not entitle the taxpayer to receive a refund unless fewer than three (3) years have elapsed from the date the original return for the tax year not included in the notice was filed or fewer than two (2) years have elapsed from the time that income tax due on the original return was paid, whichever of the periods expires later, for:
    1. A tax year that is not included within the notice of change or correction; or
    2. An issue that is not included in the notice of change or correction.
3. Upon written agreement of the Secretary of the Department of Finance and Administration and the taxpayer, the time within which the Secretary of the Department of Finance and Administration may make a final assessment, as provided by § 26-18-401, may be extended to a date mutually agreed upon in the written agreement.
4. 1. When, before the expiration of the time prescribed for the assessment of the tax or of extensions of the time prescribed for the assessment of the tax consented to in writing, both the Secretary of the Department of Finance and Administration and the taxpayer have consented in writing to an assessment after that time, then the tax may be assessed at any time prior to the expiration of the time agreed upon.
  2. When the time to file a claim for a refund has not expired at the time the extension agreement is entered into, the agreement shall automatically extend the period in which a refund may be allowed or a claim for a refund may be filed to the final date agreed to in the agreement, plus sixty (60) days.
5. If a taxpayer understates a state tax due by an amount equal to or greater than twenty-five percent (25%) in any return or report or in the case of an income tax, if the taxpayer underreports net taxable income by twenty-five percent (25%) or more, the Secretary of the Department of Finance and Administration may assess the tax due or begin an action in court for the collection of the tax due at any time prior to the expiration of six (6) years after the return was required to be filed or the date the return was filed, whichever period expires later.
6. In the case of a fraudulent return or failure to file a report or return required under any state tax law, the Secretary of the Department of Finance and Administration may compute, determine, and assess the estimated amount of tax due from any information in his or her possession or may begin an action in court for the collection of the tax without assessment, at any time.
7. Whenever a taxpayer requests an extension of time for filing any return required by any state tax law, the limitation of time for assessing any tax shall be extended for a like period.
8. 1. Except as otherwise provided in this chapter, when the assessment of any tax imposed by any state law has been made within the period of limitation properly applicable to the assessment, the tax may be collected by levy or proceeding in court, but only if the levy is made or the proceeding is begun within ten (10) years after the date of the assessment of the tax.
  2. A bankruptcy filing by a taxpayer tolls the ten-year collection period stated in subdivision (h)(1) of this section until one hundred eighty (180) days after the termination of the taxpayer's bankruptcy case.
9. 1. 1. An amended return shall be filed by the taxpayer within three (3) years from the time the return was filed or two (2) years from the time the tax was paid, whichever of the periods expires later.
    2. The limitations periods stated in subdivision (i)(1)(A) of this section apply regardless of whether the amended return would reduce a taxpayer's tax liability, entitle the taxpayer to a refund of an overpayment of a state tax, amend the taxpayer's filing status, or amend the taxpayer's return for any other purpose.
    3. Subdivision (i)(1)(A) of this section does not apply:
      1. To a tax paid as a result of an audit or proposed assessment; or
      2. If the amount of taxable income or taxable estate for a taxpayer for a year, as returned to the United States Department of the Treasury, is changed and corrected by the Commissioner of Internal Revenue or an officer of the United States Government of competent authority.
        
        Subsection (b) of this section applies in circumstances described in subdivision (i)(1)(C)(ii)(a) of this section.
    4. 1. If a taxpayer is subject to an audit, then the taxpayer may file an amended return or verified claim for credit or refund of an overpayment of a state tax that occurred at any time during the time period for which the audit is performed.
      2. However, the total refund of overpayments for the extended audit period shall not be more than the total amount assessed for the extended audit period.
  2. Any taxpayer who fails to file a return, underreports his or her income by twenty-five percent (25%) or more, or fails to notify the Secretary of the Department of Finance and Administration of any change or correction by the Internal Revenue Service in the taxpayer's taxable income shall not be entitled to file an amended return or verified claim for credit or refund after the expiration of three (3) years from the date the original return or notification of change was originally due.
10. No person shall be prosecuted, tried, or punished for any of the various criminal offenses arising under the provisions of any state tax law unless the indictment of the person is instituted within six (6) years after the commission of the offense.
11. 1. In the case of an individual, the running of the periods specified for filing an amended return or verified claim for credit or refund shall be suspended during any period of the individual's life in which the individual is financially disabled.
  2. 1. An individual is financially disabled if the individual is unable to manage his or her financial affairs by reason of a medically determinable physical or mental impairment of the individual which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.
    2. An individual shall not be considered to have a physical or mental impairment unless proof of the existence of the impairment is furnished in a form and in a manner as the Secretary of the Department of Finance and Administration may require.
  3. An individual shall not be treated as financially disabled during any period that the individual's spouse or any other person is authorized to act on behalf of the individual in financial matters.
12. 1. The limitation periods in subsection (i) of this section to file a claim for credit or refund of an overpayment of state tax do not apply to a taxpayer who is a veteran if the:
    1. Overpayment of state tax claimed resulted from the:
      1. Reduction of uniformed service retired pay computed under 10 U.S.C. § 1406 or 10 U.S.C. § 1407, as in effect on January 1, 2009; or
      2. Waiver of retired pay under 38 U.S.C. § 5305, as in effect on January 1, 2009; and
    2. Reduction of the uniformed service retired pay or waiver of retired pay provided in subdivision (l)(1)(A) of this section is the result of an award of compensation under a determination by the United States Secretary of Veterans Affairs that part or all of the payments to the taxpayer are payments made for a service-connected disability that are not included in gross income under 26 U.S.C. § 104, as in effect on January 1, 2009.
  2. An amended return or verified claim for credit or refund of an overpayment of state tax described in subdivision (l)(1) of this section shall be filed by the taxpayer within one (1) year of the date of the determination described in subdivision (l)(1)(B) of this section or February 25, 2009, whichever occurs later.
  3. A credit or refund for an overpayment of state tax shall not be allowed under this subsection for any tax year which began before January 1, 2001.
13. 1. Except in the case of deficiencies that are determined to be due to fraud, if the Secretary of the Department of Finance and Administration assesses a tax or begins an action in court for the collection of a tax under subsection (e) or subsection (f) of this section for a time period in excess of the time periods provided in subsection (a) of this section, the taxpayer may file a verified claim for a credit or refund of an overpayment of state tax for the additional time period open for assessment by the Secretary of the Department of Finance and Administration at any time before the time of collection of the assessment.
  2. However, the taxpayer shall not receive a credit or refund of any amount in excess of the assessment under this subsection.
  3. The taxpayer's ability to file a verified claim under this subsection is in addition to and not in limitation of the other provisions for filing claims in this section.
14. 1. Except as provided in subdivision (n)(2) of this section, an assessment to recover an erroneously paid refund shall not be made after the expiration of three (3) years from the date of the refund warrant.
  2. However, an assessment may be made at any time to recover an erroneously paid refund that was paid as a result of fraud or misrepresentation by the taxpayer.
1. 1. The Secretary of the Department of Finance and Administration shall give a taxpayer notice of any assessment, demand, decision, or hearing before the secretary which directly involves that taxpayer.
  2. 1. All notices required to be given by the secretary to a taxpayer shall be either served by personal service or sent by regular mail to the taxpayer's last address on record with the particular tax section of the Revenue Division of the Department of Finance and Administration in question.
    2. Service of the notice by mail is presumptively complete upon mailing, and the secretary may take any action permitted by any state tax law.
  3. All notices of final assessment under § 26-18-401 shall be sent by regular mail.
2. 1. When giving notice to the secretary, the taxpayer shall give notice either by mail or by personal service on the secretary.
  2. The notice the taxpayer gives shall be effective when postmarked or, in case of personal service, when so served.
3. By written agreement, the secretary and any taxpayer may provide for any other reasonable means of giving notice.
4. All notices shall be in writing.
1. The Secretary of the Department of Finance and Administration may accept payment of any state or local tax or fee by credit card when he or she determines that credit card payments are administratively feasible.
2. The secretary may enter into contracts with credit card companies and may pay fees normally charged by those companies for allowing the use of their credit cards as authorized by this section.
1. 1. The Secretary of the Department of Finance and Administration may promote the benefits of and encourage the use of electronic tax administration programs, as they become available, through the use of mass communications and other means.
  2. It is the policy of the Department of Finance and Administration that:
    1. Paperless filing should be the preferred and most convenient means of filing state tax and information returns; and
    2. The department should cooperate with and encourage the private sector by encouraging competition to increase electronic filing of such returns.
2. The secretary shall establish a plan to eliminate barriers, provide incentives, and use competitive market forces to increase electronic filing gradually over the next ten (10) years while maintaining existing processing times for paper returns.
1. The Secretary of the Department of Finance and Administration shall develop procedures for the acceptance of signatures on state tax returns or reports in digital or other electronic form.
2. Until such time as such procedures are in place, the secretary may:
  1. Waive the requirement of a signature for a particular type or class of return, declaration, statement, or other document required or permitted to be made in writing under state tax laws and rules; or
  2. Provide for alternative methods of signing or subscribing a particular type or class of return, declaration, statement, or other document required or permitted to be made in writing under state tax laws and rules.
1. When the state seeks to impose a tax under the terms of a state tax law, then the statute imposing the tax shall be strictly construed in limitation of the imposition of the tax.
2. When a taxpayer claims to be entitled to a tax exemption, deduction, or credit under the terms of a state tax law, then the statute providing the tax exemption, deduction, or credit shall be strictly construed in limitation of the exemption, deduction, or credit.
3. The burden of proof applied to matters of fact and evidence, whether placed on the taxpayer or the state, in controversies regarding the application of a state tax law shall be by preponderance of the evidence.
4. When the meaning of a state tax law is in controversy, the burden of establishing the proper construction of the statute shall be on the party claiming application of the tax or benefit of the tax exemption, deduction, or credit.
5. Words used in statutes imposing a tax and in statutes providing for a tax exemption, deduction, or credit shall be given their plain and ordinary meaning, not their narrowest possible meaning.
6. 1. Statutes imposing a tax and statutes providing a tax exemption, deduction, or credit shall be fairly and reasonably construed, taking into consideration the purpose and spirit of the tax, exemption, deduction, or credit and the public policy at the time the statute was passed.
  2. If after taking this section and other applicable rules of statutory construction into account, a well-founded doubt exists with respect to the meaning of a statute imposing a tax or providing a tax exemption, deduction, or credit, the rule of strict construction shall require that the doubt be resolved against the tax, exemption, deduction, or credit.
7. This section is remedial and procedural and shall apply to all actions on and after October 1, 2015.
1. 1. A written legal opinion issued by the Secretary of the Department of Finance and Administration on or after January 1, 2016, shall be posted on the Arkansas.gov website.
  2. Any identifying facts and information that the secretary determines to be confidential in nature concerning taxpayers or other individuals or entities shall be redacted from an opinion posted under this section.
  3. The secretary may post a synopsis that describes the subject matter, facts, and guidance provided in an opinion instead of posting the complete redacted opinion if a copy of the redacted opinion is made available upon request.
2. 1. A final determination of a hearing officer or the secretary issued under § 26-18-405 on or after January 1, 2016, shall be posted on the Arkansas.gov website.
  2. Any identifying facts and information that the secretary determines to be confidential in nature concerning taxpayers or other individuals or entities shall be redacted from a final determination posted under this section.
  3. The secretary may post a synopsis that fully describes the subject matter, facts, and conclusions reached by the hearing officer or secretary instead of posting the complete determination.
  4. An administrative appeal that is settled or withdrawn from consideration before a final determination is made shall not be posted under this section.
1. 1. The Secretary of the Department of Finance and Administration shall make the inquiries, determinations, and assessments of all state taxes, including interest, additions to taxes, and assessable penalties, imposed by all state tax laws.
  2. The proposed assessment shall be made by recording the liability of the taxpayer in the office of the secretary in accordance with rules prescribed by the secretary.
  3. Upon request of the taxpayer, the secretary shall furnish the taxpayer a copy of the record of the assessment.
2. 1. The secretary shall collect all taxes imposed by any state tax law.
  2. 1. 1. The secretary shall issue a final assessment to each taxpayer liable for the unpaid tax.
      2. The final assessment shall state the amount of the assessment and demand payment within ten (10) days of the assessment.
      3. The final assessment shall not be issued before the expiration of time for the taxpayer to request an administrative hearing under § 26-18-404.
    2. If the taxpayer has requested administrative relief under § 26-18-404 the final assessment shall be issued according to § 26-18-405.
    3. 1. If the taxpayer has paid the assessment before the time for the issuance of the final assessment, no final assessment shall be issued.
      2. The taxpayer may seek to recover the payment of the assessment only if § 26-18-403 or § 26-18-406 applies.
  3. Upon receipt of the final assessment from the secretary, the person liable for the tax shall pay the stated amount including any interest, additions to tax, and assessable penalties at the place and time stated in the final assessment.
1. Regardless of the date on which a return or payment is due or a taxable period of a taxpayer closes, the Secretary of the Department of Finance and Administration shall declare the taxable period of any state tax terminated for that person and shall issue a jeopardy assessment and assess the tax from any information in his or her possession, notify the taxpayer, and demand immediate payment if the secretary believes that:
  1. The tax liability of any person who has a bond on file with the secretary to indemnify the state for the payment of any state tax is in excess of the amount of the bond;
  2. A taxpayer intends to depart from the state, to remove his or her property therefrom, or to conceal himself or herself or any of his or her property therein;
  3. A taxpayer intends to discontinue business without making adequate provisions for payment of all state tax; or
  4. A taxpayer intends to do any other act tending to prejudice, jeopardize, or render wholly or partially ineffectual proceedings to compute, assess, or collect any state tax.
2. 1. Within five (5) days after the date on which a notice and demand for payment is made under subsection (a) of this section, the secretary shall provide the taxpayer with a written statement of the information upon which the secretary relies in making such assessment.
  2. If the taxpayer fails or refuses to pay the tax upon demand of the secretary or requests a hearing before the secretary within five (5) business days after the day the taxpayer is furnished the written statement described in subdivision (b)(1) of this section, the tax shall become delinquent and the secretary shall proceed to issue a certificate of indebtedness.
3. When the taxpayer requests a hearing, the secretary shall hold the hearing within five (5) business days of receipt of the request. After a hearing, the secretary shall determine whether the making of the assessment under subsection (a) of this section is reasonable under the circumstances and shall render his or her decision. The taxpayer has three (3) days after the receipt of the secretary's decision either to pay the tax and applicable penalty and interest due or to protest the decision of the secretary as provided by § 26-18-406(a) prior to the secretary's issuing a certificate of indebtedness.
4. Whenever the secretary issues a jeopardy assessment, he or she shall have the burden of proving the reasonableness of the assessment.
1. 1. If any taxpayer fails to file any return as required by any state tax law, the Secretary of the Department of Finance and Administration from any information in his or her possession or obtainable by him or her, may determine the correct amount of tax for the taxable period. If a return has been filed, the secretary shall examine the return and make any audit or investigation that he or she considers necessary.
  2. 1. When a return has not been filed and the secretary determines that there is a tax due for the taxable period or when a return has been filed and the secretary determines that the tax disclosed by the return is less than the tax disclosed by his or her examination, the secretary shall propose the assessment of additional tax plus penalties, as the case may be, and shall give notice of the proposed assessment to the taxpayer.
    2. The notice required under subdivision (a)(2)(A) of this section shall:
      1. Explain the basis for the proposed assessment;
      2. State that a final assessment, as provided by § 26-18-401, will be made if the taxpayer does not protest the proposed assessment as provided by § 26-18-404.
        
        The taxpayer does not have to protest the proposed assessment to later be entitled to exercise the right to seek a judicial review of the assessment under § 26-18-406; and
      3. Provide contact information for the taxpayer to use if the taxpayer wants to obtain his or her tax records, including without limitation the facts and evidence supporting the proposed assessment, from the Department of Finance and Administration.
2. Any demand for additional payment of a state tax which is made as the result of a verification of a mathematical error on the return shall not be deemed to be a proposed assessment under the provisions of this section and shall not be subject to the hearing or appeal provisions of this chapter.
3. 1. An erroneously paid refund is a tax deficiency and is subject to assessment under this section.
  2. 1. When an erroneously paid refund is issued to a taxpayer, the secretary shall issue a notice of proposed assessment for the amount of the erroneously paid refund, plus interest and any penalty authorized under this chapter.
    2. The notice of proposed assessment to recover an erroneously paid refund shall explain the basis for the proposed assessment and shall inform the taxpayer that a final assessment under § 26-18-401 shall be made if the taxpayer fails to protest the assessment under § 26-18-404.
  3. Sections 26-18-404 — 26-18-406 and 26-18-701 apply to assessments of erroneously paid refunds.
  4. Interest and penalties imposed on a tax deficiency are subject to waiver or abatement in accordance with the procedure established in § 26-18-705(b) if the tax deficiency arose from an error by the department that resulted in the issuance of an erroneously paid refund.
1. Any taxpayer who wishes to seek administrative relief from any proposed assessment of taxes or from a denial of a claim for refund by the Secretary of the Department of Finance and Administration shall follow the procedure provided by this section.
2. 1. A taxpayer may at his or her option either request the secretary to consider his or her request for relief solely upon written documents furnished by the taxpayer or upon the written documents and any evidence produced by the taxpayer at a hearing.
  2. A taxpayer who requests the secretary to render his or her decision based on written documents is not entitled by law to any other administrative hearing prior to the secretary's rendering of his or her decision and, if necessary, the issuing of a final assessment and demand for payment or issuing of a certificate of indebtedness.
3. 1. Within sixty (60) days after service of notice of the proposed assessment or denial of a claim for refund, the taxpayer may file with the secretary a written protest under oath, signed by the taxpayer or the taxpayer's authorized agent, setting forth the taxpayer's reasons for opposing the proposed assessment or the denial of a claim for refund.
  2. No administrative relief will be available to a taxpayer who fails to protest or to a taxpayer who fails to request an extension of time to protest a proposed assessment of tax or denial of a claim for refund within the sixty (60) days following the service of notice of the proposed assessment or denial of a claim for refund.
4. The secretary may, in his or her discretion, extend the time for filing a protest for any period of time not to exceed an additional ninety-day period.
1. 1. The Secretary of the Department of Finance and Administration shall appoint a hearing officer to review all written protests submitted by taxpayers, hold all hearings, and make written findings as to the applicability of the proposed assessment or the denial of the claim for refund.
  2. Decisions of the hearing officer shall be final unless revised by the secretary.
  3. The hearings on written and oral protests and determinations made by the hearing officer shall not be subject to the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
2. The secretary may appoint one (1) or more hearing officers, but the persons occupying these appointments shall not contemporaneously with the holding of these appointments have any other administrative duties within the Revenue Division of the Department of Finance and Administration.
3. The actual hearing on the written protest shall be held in any city in which the Revenue Division of the Department of Finance and Administration maintains a field audit district office or in such other city as the secretary shall, in his or her discretion, designate.
4. 1. 1. All written protests filed with the secretary shall be delivered promptly to the hearing officer.
    2. The hearing officer shall set the time and place for the hearing on a written protest and shall give the taxpayer reasonable notice of the hearing.
    3. If it is not possible for the hearing officer to hold a hearing and issue a decision on a protest of a proposed assessment within one hundred eighty (180) days after the taxpayer files a written protest for reasons that the hearing officer determines are beyond the taxpayer's control, the secretary shall waive the interest for the period from the time the written protest is filed until the final assessment is issued.
  2. At the hearing, the taxpayer may be represented by an authorized representative and may present evidence in support of his or her position.
  3. After the hearing, the hearing officer shall render his or her decision in writing and shall serve copies upon both the taxpayer and the section or division of the Department of Finance and Administration which proposed the assessment or the denial of the claim for refund.
  4. 1. 1. If the proposed assessment or denial of a claim for refund is sustained, in whole or part, the taxpayer or legal counsel for the secretary may request in writing, within twenty (20) days of the mailing of the decision, that the secretary revise the decision of the hearing officer.
      2. No request for revision will be considered unless it is received by the secretary within twenty (20) days of the mailing of the hearing decision.
      3. Either the taxpayer or legal counsel for the secretary shall provide a copy of any written request for revision to the other.
      4. The secretary may hold the supplemental proceedings on any request for revision and shall issue a decision on the request within sixty (60) days of the receipt of the request for revision.
    2. If the secretary refuses to make a revision or if the taxpayer or legal counsel for the secretary does not make a request for revision, then the secretary shall send either:
      1. A final assessment to the taxpayer, as provided by § 26-18-401, that is made upon the final determination of the hearing officer that sustained a proposed assessment of tax; or
      2. A notice in writing to both the taxpayer and legal counsel for the secretary, if a revision was requested, of his or her decision not to revise a decision that resulted in no tax due, including the denial of a claim for refund.
    3. 1. If the secretary revises the decision of the hearing officer, the secretary shall send the final decision of the secretary to the taxpayer and to the legal counsel for the secretary.
      2. A notice of final assessment shall be made upon the decision of the secretary if the secretary's decision sustained a proposed assessment of tax.
      3. No further notice will be issued for a final decision of the secretary that results in no tax due, including the denial of a claim for refund.
    4. A taxpayer may not request revision of a decision issued by the secretary under this subdivision (d)(4).
5. A taxpayer may seek relief from the final decision of the hearing officer or the secretary on a final assessment of a tax deficiency or a notice of denial of a claim for refund by following the procedure set forth in § 26-18-406.
6. 1. In addition to the hearing procedures set out in subsections (a)-(e) of this section, the secretary may hold administrative hearings by telephone, video conference, or other electronic means if the secretary determines that conducting the hearing in such a manner:
    1. Is in the best interest of the taxpayer and the department;
    2. Provides the same level of legal protection as provided in an in-person hearing or a hearing on written documents, including without limitation adequate due process;
    3. Is not unduly expensive for the taxpayer or the department; and
    4. Adequately protects the confidentiality of the taxpayer's information.
  2. The secretary may contract with third parties for all services necessary to conduct hearings by telephone, video, or other electronic means.
  3. Any person who enters into a contract with the secretary to provide services necessary to conduct hearings by telephone, video, or other electronic means shall be subject to the requirements of this chapter providing for the confidentiality of all taxpayer records.
1. After the issuance and service on the taxpayer of the final assessment of a deficiency in tax that is not protested by the taxpayer under § 26-18-403 or a final determination of the hearing officer or the Secretary of the Department of Finance and Administration under § 26-18-405, a taxpayer may seek judicial relief from the final assessment or determination by:
  1. 1. Filing suit for judicial relief from the final assessment or determination within one hundred eighty (180) days of the date of the final assessment or determination.
    2. A taxpayer filing suit under this subdivision (a)(1) shall not be required to pay the state tax, penalties, and interest due before filing suit;
  2. Paying the entire amount of state tax due within one (1) year of the date of the final assessment or determination and filing suit to recover that amount within one (1) year of the date of payment; or
  3. Filing suit to recover assessed tax, penalty, and interest paid prior to the time for issuance of the final assessment within one (1) year of the date of the final determination of the hearing officer or the secretary under § 26-18-405.
2. A taxpayer may seek judicial relief from a final determination denying a claim for refund by filing suit to recover the amount claimed within one (1) year from the mailing of the denial of the secretary under § 26-18-507, or a final determination of the hearing officer or the secretary under § 26-18-405, whichever is later.
3. 1. Jurisdiction for a suit to contest a final assessment or determination of the secretary under this section shall be in the Pulaski County Circuit Court or the circuit court of the county in which the taxpayer resides or has his or her principal place of business, where the matter shall be tried de novo.
  2. An appeal will lie from the circuit court to the Supreme Court, as in other cases provided by law.
  3. A presumption of correctness or weight of authority shall not attach to a final assessment or determination of the secretary in a trial de novo or an appeal under this section.
4. 1. The methods provided in this section shall be the sole alternative methods for seeking relief from a written decision of the secretary establishing a deficiency in tax or disallowing a claim for refund.
  2. An injunction shall not issue to stay proceedings for assessment or collection of taxes levied under state tax law.
5. 1. In a court proceeding under this section, the:
    1. Prevailing party may be awarded a judgment for court costs; and
    2. Taxpayer may be awarded reasonable attorney's fees if the:
      1. Secretary revised a decision of the hearing officer in favor of the taxpayer under § 26-18-405;
      2. Taxpayer is the prevailing party in an action for judicial relief from the determination of the secretary under this section; and
      3. Court finds that the secretary's revision was without a reasonable basis in law and fact.
  2. A judgment of court costs entered by the court in favor of either party or of attorney's fees awarded in favor of the taxpayer shall be treated, for purposes of this chapter, in the same manner as an overpayment or deficiency of tax, except that interest or penalty shall not be allowed or assessed with respect to a judgment for court costs or attorney's fees.
6. If a taxpayer pays the tax, penalty, and interest assessed under § 26-18-403 and does not request administrative relief according to § 26-18-404, then:
  1. The taxpayer may seek judicial relief from the assessment only if the taxpayer files suit in circuit court within one (1) year from the date of payment of the assessment; and
  2. The provisions of § 26-18-507 shall not apply to the payments.
7. The Arkansas Rules of Civil Procedure and § 16-56-126 concerning nonsuit and commencement of new actions apply to appeals under this section.
1. The liability for the payment of taxes imposed under any state tax law is on the taxpayer or person as identified by the particular state tax law.
2. Any person required to collect, truthfully account for, and pay over any state tax who willfully fails to collect the tax, or truthfully account and pay over the tax, or willfully attempts in any manner to evade or defeat any tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over.
3. As used in this section, “person” includes an officer, director, or employee of a corporation, a partner or employee of a partnership, or a member, manager, or employee of a limited liability company, who, as an officer, director, employee, partner, member, or manager is under a duty to perform the act in respect to which the violation occurs.
4. This section shall not apply to the payment of corporate income taxes.
1. The liability, at law or in equity, of the transferee of property of any person liable for any tax imposed by a law of the State of Arkansas shall be the same as that of the transferor and may be assessed and collected from the transferee in the same manner and subject to the same provisions as the transferor.
2. The period of limitation for assessment of any liability of a transferee or a fiduciary shall be within one (1) year after the expiration of the period of limitation for assessment against the transferor.
3. As used in this section, unless the context otherwise requires, “transferee” includes the donee, heir, legatee, devisee, and distributee and, with respect to estate tax, also includes any person who is personally liable for any part of the tax.
1. When a return of tax is required to be filed, the person required to make the return shall, without assessment or notice and demand from the Secretary of the Department of Finance and Administration, pay the tax to the secretary at the time and place fixed for filing the return, determined without regard to any extension of time for filing the return.
2. All remittances required to be paid under any state tax law shall be made payable to the Department of Finance and Administration by bank draft, check, cashier's check, money order, or money. The secretary shall issue a receipt, if requested, to the taxpayer for every cash payment. No remittance, other than cash, is a final discharge of liability due the secretary until it has been paid in cash.
1. No final account of any fiduciary shall be allowed by a probate division of circuit court of the state unless the account shows, and the probate division of circuit court finds, that all taxes imposed by any state tax law which are due have been paid and that all taxes which may become due are secured by bond, security deposit, or otherwise. To the extent that a tax certificate of the Secretary of the Department of Finance and Administration shows payment, it shall be conclusive.
2. For the purpose of facilitating the settlement and distribution of the estates held by fiduciaries, the secretary may agree upon the amount of taxes due, or to become due, from the fiduciaries under the provisions of any state tax law, and payment in accordance with the agreement shall be in full satisfaction of all taxes to which the agreement relates.
1. 1. Upon written request and for good cause, the Secretary of the Department of Finance and Administration may grant a reasonable extension of time to file any return required under any state tax law.
  2. The secretary shall keep a record of every extension granted with the reason the extension was granted.
  3. Except for a corporation income tax return as provided in § 26-51-807(c), the time for filing any return shall not be extended more than one hundred eighty (180) days.
  4. The secretary may promulgate rules to grant automatic extensions of time to file income tax returns and information returns without the taxpayer being required to submit a written application for the extension of time to file.
2. When an extension of time to file is granted, the taxpayer may file a tentative return on or before the original due date showing the estimated amount of tax due for the period covered by the return and may pay the estimated tax or the first installment at the same time.
3. 1. No interest shall be accrued or assessed against any sums paid on or before the original due date.
  2. Any state tax not paid when due because the secretary granted an extension of time for payment shall bear interest at the rate of ten percent (10%) per annum from the date originally due until paid.
4. 1. For purposes of granting an extension of time for filing a return under this section, “good cause” includes, but is not limited to:
    1. An instance in which the taxpayer is determined for federal tax purposes to be affected by a presidentially declared disaster under the provisions of 26 U.S.C. § 7508A, as in effect on January 1, 1999; and
    2. An instance in which the taxpayer is determined to be affected by a disaster emergency as declared by the Governor under § 12-75-107.
  2. In the event that an extension of time for filing a return is granted to a taxpayer affected by a presidentially declared disaster or a disaster emergency declared by the Governor, no interest or penalty shall accrue for the extension period granted by the secretary.
1. It is the duty of every taxpayer required to make a return of any tax due under any state tax law to keep and preserve suitable records as are necessary to determine the amount of tax due or to prove the accuracy of any return.
2. Unless otherwise provided by law, the taxpayer is required to keep and maintain all records within the State of Arkansas and for at least six (6) years after a return was filed. These records are subject to examination by the Secretary of the Department of Finance and Administration at any reasonable time.
3. When the records required by this section are kept outside the State of Arkansas in the usual course of business, they shall be produced within the state within fifteen (15) days after receipt of demand by the secretary. If the taxpayer determines it is impractical, then the taxpayer may request, and the secretary may grant, permission to have the records audited wherever they may be.
4. When a taxpayer fails to preserve and maintain the records required by any state tax law, the secretary may, in his or her discretion, make an estimated assessment based upon information available to him or her as to the amount of tax due by the taxpayer. The burden of proof of refuting this estimated assessment is upon the taxpayer.
1. 1. Any taxpayer who has paid any state tax to the State of Arkansas in excess of the state taxes lawfully due, subject to the requirements of this chapter, shall be refunded the overpayment of the state tax determined by the Secretary of the Department of Finance and Administration to be erroneously paid upon the filing of an amended return or a verified claim for refund, subject to subsection (e) of this section.
  2. This subsection does not include an action based on Arkansas Constitution, Article 16, § 13.
2. The claim shall specify:
  1. The name of the taxpayer;
  2. The time when and the period for which the state tax was paid;
  3. The nature and kind of state tax paid;
  4. The amount of the state tax that the taxpayer claimed was erroneously paid;
  5. The grounds upon which a refund is claimed; and
  6. Any other information relative to the payment as may be prescribed by the secretary.
3. The secretary shall determine what amount of refund, if any, is due as soon as practicable after a claim has been filed, but in no event shall the taxpayer be entitled to file a suit for refund under § 26-18-406 until at least six (6) months have elapsed from the date of the filing of the claim for refund or the secretary has issued a notice of denial of a claim for refund.
4. Notwithstanding any provisions of the law to the contrary, a taxpayer who acts only as an agent of the state in the collection of any state tax shall be entitled to claim a credit or refund of the state tax only if the taxpayer establishes that he or she has:
  1. Borne the state tax in question;
  2. Repaid the amount of the state tax to the person from whom he or she collected it; or
  3. Obtained the consent of the person to the allowance of the credit or refund.
5. 1. 1. The secretary shall make a written determination and give notice to the taxpayer concerning whether or not a refund is due.
    2. 1. If a refund is due, the secretary shall certify that the claim is to be paid to the taxpayer as provided by law or credited against state taxes due or to become due.
      2. If the secretary determines that the taxpayer entitled to the refund has an outstanding state tax delinquency for which a certificate of indebtedness has been filed, the secretary shall apply the refund due as payment against the outstanding state tax delinquency. If the amount of the state tax refund exceeds the amount of the outstanding state tax delinquency, the excess amount shall be paid to the taxpayer in accordance with subdivision (e)(1)(B)(i) of this section.
        
        The secretary shall notify each taxpayer in writing whose refund results from the filing of a joint return that the joint refund will be applied against the outstanding state tax delinquency.
        
        A taxpayer who claims that only the taxpayer's spouse owes the delinquent state tax debt may seek administrative relief by filing a written protest under oath within thirty (30) days after the notice under subdivision (e)(1)(B)(ii)(b) is received that includes information regarding why the taxpayer does not owe the delinquent state tax debt and either requests a hearing in person or based upon the information submitted with the protest.
        
        A hearing on a written protest made under this subdivision (e)(1)(B)(ii) and any judicial relief requested following the administrative hearing process shall be provided in accordance with the applicable provisions of §§ 26-18-405 and 26-18-406.
  2. 1. If the secretary's determination is to disallow the claim for refund, in whole or in part, then the secretary shall immediately issue a written decision giving notice to the taxpayer of the denial of the claim for refund.
    2. The taxpayer may seek administrative review and relief from the secretary's decision to deny a claim for refund by protesting as provided in §§ 26-18-404 and 26-18-405.
  3. The taxpayer may seek judicial relief under the provisions of § 26-18-406 from:
    1. A notice of a denial of a claim for refund issued by the secretary; or
    2. The secretary's failure to issue a written decision after the claim for refund has been filed for six (6) months.
6. 1. This section shall not apply to state taxes paid as a result of an audit or proposed assessment.
  2. State taxes paid as a result of an audit or proposed assessment may not be recovered unless § 26-18-406 applies.
1. 1. The Secretary of the Department of Finance and Administration may cancel or refuse to issue, extend, or reinstate a license, permit, or registration under any state tax law to any person or taxpayer who has within the last three (3) years failed to comply with a state law concerning the timely reporting and payment of a state tax administered by the secretary or failed to observe or fulfill the conditions upon which the license or permit was issued.
  2. A failure to pay assessed interest and penalties on a delinquent state tax is grounds for a decision to cancel or refuse to issue, extend, or reinstate a license, permit, or registration under this subsection.
2. 1. When the secretary determines, in his or her sole discretion, that an emergency situation exists and that the public welfare and safety are endangered, he or she may issue an order temporarily suspending a license, permit, or registration pending a hearing before him or her on the subject of the cancellation of the license, permit, or registration.
  2. The secretary shall give notice of the temporary suspension at the same time that he or she gives notice of his or her intention to cancel or to refuse to issue, extend, or reinstate any license, permit, or duplicate copy thereof, as provided by this section.
  3. The secretary shall as soon as practicable, but in any event within three (3) days after the request of the taxpayer, hold a hearing on whether the temporary suspension should be made permanent.
  4. The temporary suspension shall be made permanent without a hearing unless the taxpayer requests a hearing within twenty (20) days of receipt of notice of the temporary suspension.
3. Except as set out in subsection (b) of this section, before the secretary may cancel or refuse to issue, extend, or reinstate any license, permit, or registration, he or she shall give notice of his or her proposed action, and the owner or applicant shall have twenty (20) days after receipt of the secretary's decision to request a hearing.
4. 1. When a license, permit, or registration is cancelled by the secretary, all accrued fees, taxes, and penalties, even though not due and payable at the time of cancellation under the state tax law imposing and levying the tax, shall become due concurrently with the cancellation of the license, permit, or registration.
  2. The licensee or permittee shall within five (5) business days of cancellation make a report to the secretary covering the period not previously covered by reports filed by that person and ending with the date of the cancellation and shall pay all accrued fees, taxes, and penalties at the time the report is made.
  3. Violation of this subsection is a Class C misdemeanor.
5. 1. The affected taxpayer may seek relief from the decision of the secretary cancelling a license, permit, or registration by requesting a hearing, pursuant to subsections (b) and (c) of this section, by filing a written protest of the action with the hearing officer appointed by the secretary, pursuant to § 26-18-405, and the hearing officer shall hold all hearings requested pursuant to this section.
  2. The hearing officer shall issue a written decision on all hearings which shall be final unless revised by the secretary.
  3. The hearings and determinations of the hearing officer shall not be subject to the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
  4. 1. A taxpayer may request a revision by the secretary of the hearing officer's determination which is adverse to him or her within twenty (20) days of the date of the mailing of the hearing officer's decision.
    2. If the secretary refuses to make a revision, or if the taxpayer does not request a revision, then the affected taxpayer may seek relief from the hearing officer's decision or the final revision determination by the secretary by following the method provided in § 26-18-602.
6. Violations of this section shall be punished as provided in § 26-18-206. The secretary may seek to enjoin any violation of any state tax law the secretary is charged to enforce.
1. 1. The affected taxpayer may seek relief from the decision of the Secretary of the Department of Finance and Administration, rendered after a hearing, cancelling a license, permit, or registration.
  2. The taxpayer's petition seeking an order to stay the effect of the secretary's decision shall be filed within thirty (30) days after receipt of notice of that decision by the taxpayer with the Pulaski County Circuit Court or the circuit court of the county in which the taxpayer resides or has his or her principal place of business, where the matter shall be tried de novo.
2. 1. Relief from the decision of the secretary cancelling a license, permit, or registration may be taken only as provided in this section.
  2. 1. To stay the effect of the secretary's decision, the person or taxpayer shall file a bond not to exceed twenty-five thousand dollars ($25,000) with and in an amount fixed by the secretary, payable to the State of Arkansas.
    2. The bond shall be conditioned upon:
      1. The faithful and diligent prosecution of the appeal by the taxpayer to a final determination; and
      2. The immediate compliance of the taxpayer with the secretary's decision if the secretary's decision is not enjoined by the circuit court or upon appeal is upheld by the Supreme Court.
  3. The secretary may, in his or her discretion, refuse to stay the effect of his or her decision and permit a bond to be posted when he or she determines in his or her sole discretion that the public safety and welfare would be endangered by the stay.
3. The venue for all actions seeking relief from a decision of the secretary concerning the cancellation of or refusal of the issuance of a license or permit shall be the Pulaski County Circuit Court or the circuit court of the county in which the taxpayer resides or has his or her principal place of business.
1. 1. 1. 1. If a taxpayer does not timely and properly pursue his or her remedies seeking relief from a decision of the Secretary of the Department of Finance and Administration and a final assessment is made against the taxpayer, or if the taxpayer fails to pay the deficiency assessed upon notice and demand, then the secretary shall, as soon as practicable thereafter, issue to the circuit clerk of any county of the state a certificate of indebtedness certifying that the person named in the certificate of indebtedness is indebted to the state for the amount of the tax established by the secretary as due.
      2. The secretary may publish an electronic copy of a certificate of indebtedness issued under subdivision (a)(1)(A)(i) of this section on the official website maintained by the secretary.
        
        The secretary shall remove an electronic copy of a certificate of indebtedness published under subdivision (a)(1)(A)(ii)(a) of this section upon:
        
        Satisfaction of the underlying indebtedness that is the subject of the certificate of indebtedness; and
        
        The issuance of a release of the certificate of indebtedness on the records of the circuit clerk.
    2. 1. If a taxpayer has a delinquent tax liability to the State of Arkansas of less than one thousand dollars ($1,000), the secretary may enter into an agreement with the taxpayer to allow the taxpayer to pay the delinquency in installments.
      2. The secretary may choose not to issue a certificate of indebtedness during the period of the installment agreement if he or she determines that it is in the best interest of the state.
    3. 1. If a taxpayer has a total delinquent individual income tax liability to the State of Arkansas of less than two thousand dollars ($2,000), the secretary may enter into an agreement with the taxpayer to allow the taxpayer to pay the delinquency in installments if:
        
        The installment agreement is for a period of twelve (12) months or less; and
        
        The installments are to be paid electronically.
      2. The secretary may choose not to issue a certificate of indebtedness during the period of the installment agreement if he or she determines that the issuance of a certificate of indebtedness is not in the best interest of the state.
  2. The circuit clerk shall enter immediately upon the circuit court judgment docket:
    1. The name of the delinquent taxpayer;
    2. The amount certified as being due;
    3. The name of the tax; and
    4. The date of entry upon the judgment docket.
  3. 1. 1. The entry of the certificate of indebtedness shall have the same force and effect as the entry of a judgment rendered by the circuit court.
      2. This entry shall constitute the state's lien upon the title of any real and personal property of the taxpayer in the county where the certificate of indebtedness is recorded.
    2. This lien is:
      1. In addition to any other lien existing in favor of the state to secure payment of taxes, applicable interest, penalties, and costs, including any costs the circuit clerk is entitled to receive as provided by law for either the filing or the release of this lien; and
      2. Superior to:
        
        Other liens of any type or character attaching to the property after the date of entry of the certificate of indebtedness on the judgment docket; and
        
        All claims of unsecured creditors.
    3. 1. The certificate of indebtedness authorized by this subsection shall continue in force for ten (10) years from the date of recording and shall automatically expire after the ten-year period has run.
        
        An action on the lien on the certificate of indebtedness shall be commenced within ten (10) years after the date of recording of the certificate, and not afterward.
        
        The secretary shall not be required to file a release on a lien which has expired, and the provisions of § 26-18-808 dealing with failure to release liens are not applicable to this section.
        
        The provisions of this subsection are applicable to both liens already on file and all future filings of liens.
      2. A bankruptcy filing by a taxpayer tolls the ten-year period for certificates of indebtedness under subdivision (a)(3)(C)(i) of this section until one hundred eighty (180) days after the termination of the taxpayer's bankruptcy case.
      3. The secretary may file another lien to secure a tax delinquency if:
        
        The secretary is required to release an inadvertently filed lien because the filing of a bankruptcy case has stayed collection activity; and
        
        There is no subsequent discharge of the tax delinquency.
  4. The lien authorized by this section arises at the time the secretary makes the assessment and continues until the taxpayer satisfies the assessment or the lien becomes unenforceable by operation of law.
2. 1. After entry of the certificate of indebtedness, the circuit clerk shall issue a writ of execution directed to the secretary, authorizing the secretary to levy upon and against all real and personal property of the taxpayer.
  2. The secretary shall have all remedies and may take all proceedings for the collection of the tax which may be taken for the recovery of a judgment at law.
  3. The writ of execution shall be issued, served, and executed in the same manner as provided for in the issuance and service of executions rendered by the circuit courts of this state, except the secretary shall act in the place of the county sheriffs.
  4. The secretary shall have this authority for all liens either presently filed or filed after the passage of this act.
3. 1. Nothing in this chapter shall preclude the secretary from resorting to any other means provided by law for collecting delinquent taxes.
  2. The issuance of a certificate of indebtedness, entry by the circuit clerk, and levy of execution as provided in this section shall not constitute an election of remedies with respect to the collection of the tax.
  3. The taxes, interest, penalties, and fees, including any costs the circuit clerk is entitled to receive as provided by law in these matters, imposed or levied by any state tax law, when due, may be collected in the same way as a personal debt of the taxpayer.
  4. In the name of the state, the secretary may sue to the same effect and extent as for the enforcement of a right of action for debt.
  5. All provisional remedies available in these actions are available to the State of Arkansas in the enforcement of the payment of any state tax.
4. 1. 1. In addition to the remedies provided in subsections (b) and (c) of this section, the secretary may direct the circuit clerk to issue a writ of execution directed to the county sheriff of any county authorizing the county sheriff to levy upon and against all real and personal property of the taxpayer.
    2. The writ of execution shall be issued, served, and executed in the same manner as provided for in the issuance and service of executions rendered by the circuit courts of this state.
  2. 1. The circuit clerk and county sheriff shall be entitled to receive the same fees provided by law in these matters.
    2. These fees shall be collected from the taxpayer by either the secretary or the county sheriff in addition to the tax, penalties, and interest included in the certificate of indebtedness.
    3. If the county sheriff is unable after diligent effort to collect the tax, interest, penalties, and costs, the secretary may pay such fees as are properly shown to be due to the circuit clerk and county sheriff.
5. The secretary may contract with persons inside or outside the state to help the secretary collect delinquencies of resident or nonresident taxpayers.
1. When a return required under any state tax law has not been filed or does not furnish all the information required by the Secretary of the Department of Finance and Administration or when the taxes imposed by any state tax law have not been paid or when any required license or permit has not been secured, the secretary, in the name of the State of Arkansas, may institute any necessary action or proceeding in the Pulaski County Circuit Court to enjoin the person or taxpayer from continuing operations until the report or return has been filed, required licenses or permits secured, or taxes paid as required.
2. The injunction shall be issued without a bond being required from the state.
1. The Secretary of the Department of Finance and Administration may enter into an agreement to compound, settle, or compromise any controversy relating to a state tax or any admitted or established tax liability as to any tax collectible under any state law when:
  1. The controversy is over the amount of tax due; or
  2. The inability to pay results from the insolvency of the taxpayer.
2. The secretary may waive or remit the interest or penalty, or any portion of the interest or penalty, ordinarily accruing because of a taxpayer's failure to pay a state tax within the statutory period allowed for its payment:
  1. If the taxpayer's failure to pay the tax is satisfactorily explained to the secretary;
  2. If the failure results from a mistake by the taxpayer of either the law or the facts subjecting him or her to such tax; or
  3. If the inability to pay the interest or penalty results from the insolvency or bankruptcy of the taxpayer.
3. 1. In settling or compromising any controversy relating to the liability of a person for any state tax for any taxable period, the secretary may enter into a written closing agreement concerning the liability.
  2. When the closing agreement is signed by the secretary, it shall be final and conclusive, and except upon a showing of fraud or misrepresentation of a material fact, no additional assessment or collection shall be made by the secretary, and the taxpayer shall not institute any judicial proceeding to recover such liabilities as agreed to in the closing agreement.
4. The secretary shall promulgate rules establishing guidelines for determining whether a proposed offer in compromise is adequate and is acceptable to resolve a tax dispute.
1. Upon written application by any person, the Secretary of the Department of Finance and Administration may release affected property from the lien imposed by any assessment, order, judgment, or certificate of indebtedness obtained by or from any levy made by the secretary if:
  1. Either full payment is made to the secretary of the sum he or she considers adequate consideration for the release, including any costs the circuit clerk is entitled to receive as provided by law in these matters; or
  2. Adequate security deposit is made with the secretary to secure the payment of the debt evidenced by the lien, including any costs the circuit clerk is entitled to receive as provided by law in these matters.
2. When the secretary determines that his or her assessment, certificate of indebtedness, or judgment is clouding the title of property because of an error in the description of properties or similarity in names, the secretary may issue a release without the payment of any consideration or any costs the circuit clerk is entitled to receive, as provided by law in these matters.
3. The secretary's release shall be given under his or her seal and filed in the office of the circuit clerk in the county in which the lien is filed, or it shall be recorded in any office in which conveyances of real estate may be recorded.
1. If a return required under any state tax law has been filed by spouses and the amount of tax due on the return was understated by either the omission of an amount properly includable in the return or by erroneous deductions or credits attributable to one (1) spouse, upon written request, the Secretary of the Department of Finance and Administration may relieve the other spouse of liability for any tax, penalty, or interest attributable to the understatement of tax for that return.
2. In determining whether to grant the relief set out in subsection (a) of this section, the secretary may take into consideration the following factors:
  1. Whether the spouse making the request for relief has significantly benefited, either directly or indirectly, from the understatement of tax;
  2. Whether the spouse making the request for relief knew or had reason to know of the understatement of tax; and
  3. Any other fact or circumstance that would make it inequitable to hold the spouse making the request for relief liable for the deficiency resulting from the understatement of tax.
3. As used in subdivision (b)(2) of this section, “reason to know” means whether a reasonably prudent person would have known that an understatement was made.
4. As used in subsection (a) of this section, “attributable to one (1) spouse” means that the understatement on the return was the result of the actions taken or information supplied by that spouse.
1. The Secretary of the Department of Finance and Administration shall, as soon as practicable, but not later than one hundred eighty (180) days after July 3, 1989, prepare a statement which sets forth in simple and nontechnical terms:
  1. The rights of a taxpayer and the obligations of the secretary during an audit;
  2. The procedure by which a taxpayer may appeal any adverse decision of the secretary, including administrative and judicial appeals;
  3. The procedures for prosecuting refund claims and for filing of taxpayer complaints; and
  4. The procedures which the secretary may use in enforcing the state's revenue laws, including assessment, estimated assessment, jeopardy assessment, and the filing and enforcement of liens.
2. The statement prepared in accordance with subsection (a) of this section shall be distributed by the secretary to a taxpayer:
  1. When a proposed assessment of any state tax is made against the taxpayer or when the taxpayer is contacted by the secretary for an examination of the taxpayer's records, whichever is earlier;
  2. When requested by the taxpayer; and
  3. At any time the secretary deems it appropriate.
3. The secretary shall take such actions as the secretary deems necessary to ensure that such distribution does not result in multiple statements being sent to any one (1) taxpayer.
1. Recording of Interviews.
  1. Recording by Taxpayer. Any agent of the Secretary of the Department of Finance and Administration in connection with any in-person interview with any taxpayer relating to the determination or collection of any tax shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the taxpayer's expense and with the taxpayer's equipment.
  2. Recording by Secretary. An agent of the secretary may make an audio recording of any interview described in subdivision (a)(1) of this section if such agent:
    1. Informs the taxpayer of such recording prior to the interview; and
    2. Upon request of the taxpayer, provides the taxpayer with a copy of such recording, but only if the taxpayer provides reimbursement for the cost of the reproduction of such copy.
2. Safeguards.
  1. Explanations of Processes. An agent of the secretary, before or at an initial interview, shall provide to the taxpayer:
    1. In the case of an in-person interview with the taxpayer relating to the determination of any tax, an explanation of the audit process and the taxpayer's rights under such process; or
    2. In the case of an in-person interview with the taxpayer relating to the collection of any tax, an explanation of the collection process and the taxpayer's rights under such process.
  2. Right of Consultation. If the taxpayer clearly states to an agent of the secretary at any time during any interview, other than during an interview initiated by an administrative summons issued under § 26-18-305, that the taxpayer wishes to consult with an attorney, certified public accountant, or any other person permitted to represent the taxpayer before the secretary, then such agent shall suspend such interview regardless of whether the taxpayer may have answered one (1) or more questions. However, the taxpayer may be requested to sign a waiver extending the time the secretary has for making a final assessment as provided by § 26-18-401. If the taxpayer refuses to sign such a waiver, the taxpayer may be subject to an estimated assessment by the secretary.
3. Representatives Holding Power of Attorney.
  1. Any attorney, certified public accountant, or any other person, permitted to represent the taxpayer before the secretary who is not disbarred or suspended from practice may be authorized by such taxpayer to represent the taxpayer in any interview described in subsection (a) of this section.
  2. An agent of the secretary may not require a taxpayer to accompany the representative in the absence of an administrative summons issued to the taxpayer under § 26-18-305.
  3. Such agent, with the consent of the immediate supervisor of such agent, may notify the taxpayer directly that such agent believes such representative is responsible for unreasonable delay or hindrance of an examination or investigation of the taxpayer.
4. Section Not to Apply to Certain Investigations. This section shall not apply to criminal investigations or investigations relating to the integrity of any agent of the secretary.
1. In General. The Secretary of the Department of Finance and Administration shall abate any portion of any penalty or addition to tax attributable to erroneous advice furnished to the taxpayer in writing by an agent of the secretary acting in such agent's official capacity.
2. Limitations. The provisions of subsection (a) of this section shall apply only if:
  1. The written advice was reasonably relied upon by the taxpayer and was in response to a specific written request of the taxpayer; and
  2. The portion of the penalty or addition to tax did not result from a failure by the taxpayer to provide adequate or accurate information.
1. General Rule.
  1. Any notice to which this section applies shall:
    1. Describe the basis for the tax due and any interest, additional amounts, additions, and assessable penalties;
    2. Identify the amounts, if any, of the tax due, interest, additional amounts, additions to the tax, and assessable penalties included in the notice; and
    3. Provide contact information for the taxpayer to use if the taxpayer wants to obtain his or her tax records, including without limitation the facts and evidence supporting the proposed deficiency, from the Department of Finance and Administration.
  2. An inadequate description under this subsection shall not invalidate such notice.
2. Notice to Which Section Applies. This section shall apply to:
  1. Any notice to be given by the Secretary of the Department of Finance and Administration described in § 26-18-307;
  2. Any notice generated out of any information return matching program; and
  3. The first letter of the proposed deficiency which allows the taxpayer an opportunity for administrative review under this chapter.
1. Authorization of Agreements. The Secretary of the Department of Finance and Administration is authorized to enter into written agreements with any taxpayer under which such taxpayer is allowed to satisfy liability for payment of any tax in installment payments, if the secretary determines that such agreement will facilitate collection of such liability.
2. Extent to Which Agreements Remain in Effect.
  1. In General. Except as otherwise provided in this subsection, any agreement entered into by the secretary under subsection (a) of this section shall remain in effect for the term of the agreement.
  2. Inadequate Information or Jeopardy. The secretary may terminate any agreement entered into by the secretary under subsection (a) of this section if the following conditions apply:
    1. Information that the taxpayer provided to the secretary prior to the date such agreement was entered into was inaccurate or incomplete; or
    2. The secretary believes that collection of any tax to which an agreement under this section relates is in jeopardy.
  3. Subsequent Change in Financial Conditions.
    1. In General. If the secretary makes a determination that the financial condition of a taxpayer with whom the secretary has entered into an agreement under subsection (a) of this section has significantly changed, the secretary may alter, modify, or terminate such agreement.
    2. Notice. Action may be taken by the secretary under subdivision (b)(3)(A) of this section only if:
      1. Notice of such determination is provided to the taxpayer no later than thirty (30) days prior to the date of such action; and
      2. Such notice includes the reasons why the secretary believes a significant change in the financial condition of the taxpayer has occurred.
  4. Failure to Pay an Installment or any Other Tax Liability When Due or to Provide Requested Financial Information. The secretary may alter, modify, or terminate an agreement entered into by the secretary under subsection (a) of this section in the case of the failure of the taxpayer to:
    1. Pay any installment at the time such installment payment is due under such agreement;
    2. Pay any other tax liability at the time such liability is due; or
    3. Provide a financial condition update as requested by the secretary.
1. In General. If any employee of the Secretary of the Department of Finance and Administration knowingly, or by reason of negligence, fails to release a lien under § 26-18-706 or § 26-18-811 on property of the taxpayer, such taxpayer may bring a civil action for damages against the secretary in court.
2. Damages. In any action brought under subsection (a) of this section, upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the sum of the following:
  1. Actual, direct, economic damages sustained by the plaintiff which, but for the action of the defendant, would not have been sustained; plus
  2. The costs of the action.
3. Limitations.
  1. Requirement that Administrative Remedies Be Exhausted. A judgment for damages shall not be awarded under subsection (b) of this section, unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the Revenue Division of the Department of Finance and Administration.
  2. Mitigation of Damages. The amount of damages awarded under subdivision (b)(1) of this section shall be reduced by the amount of such damages which could have reasonably been mitigated by the plaintiff.
  3. Period for Bringing Action. Notwithstanding any other provision of the law, an action to enforce liability created under this section may be brought without regard to the amount in controversy and may be brought only within two (2) years after the date the right of action accrues.
4. Notice of Failure to Release Lien. The secretary shall by rule prescribe reasonable procedures for a taxpayer to notify the secretary of the failure to release a lien on property of the taxpayer.
1. In General. If, in connection with any collection of state tax with respect to a taxpayer, any employee of the Revenue Division of the Department of Finance and Administration, recklessly or intentionally disregards any provision of this title, or any rule promulgated under this title, such taxpayer may bring a civil action for damages against the Secretary of the Department of Finance and Administration. Except as provided in § 26-18-808, such civil action shall be the exclusive remedy for recovering damages resulting from such actions.
2. Damages. In any action brought under subsection (a) of this section, upon a finding of liability on the part of the defendant, the defendant shall be liable to the plaintiff in an amount equal to the lesser of ten thousand dollars ($10,000) or the sum of:
  1. Actual, direct economic damages sustained by the plaintiff as a proximate result of the reckless or intentional actions of the officer or employee; and
  2. The costs of the action.
3. Limitations.
  1. Requirement that Administrative Remedies Be Exhausted. A judgment for damages shall not be awarded under subsection (b) of this section unless the court determines that the plaintiff has exhausted the administrative remedies available to such plaintiff within the division.
  2. Mitigation of Damages. The amount of damages awarded under subdivision (b)(1) of this section shall be reduced by the amount of such damages which could have reasonably been mitigated by the plaintiff.
  3. Period for Bringing Action. Notwithstanding any other provision of law, an action to enforce liability created under this section may be brought without regard to the amount in controversy and may be brought only within two (2) years after the date the right of action accrues.
4. Damages for Frivolous or Groundless Claims. Whenever it appears to the court that the taxpayer's position in proceedings before the court instituted or maintained by such taxpayer under this section, is frivolous or groundless, then damages in an amount not in excess of ten thousand dollars ($10,000) shall be awarded to the Department of Finance and Administration by the court in the court's decision. Damages so awarded shall be assessed at the same time as the decision and shall be paid upon notice and demand from the secretary.
1. Imposition of Penalty. If any person who is engaged in the business of preparing, or providing services in connection with the preparation of, returns of tax administered under this chapter, or when any person who, for compensation prepares any such return for any other person, and who:
  1. Discloses any information furnished to him or her for, or in connection with, the preparation of any such return; or
  2. Uses any such information for any purpose other than to prepare, or assist in preparing, any such return,
2. Subsection (a) of this section shall not apply to a disclosure of information if such disclosure is made either:
  1. Pursuant to any other provision of this subchapter;
  2. Pursuant to an order of a court; or
  3. For quality or peer reviews, which are conducted under the auspices of the American Institute of Certified Public Accountants or the United States Securities and Exchange Commission.
3. Subsection (a) of this section shall be in addition to the provisions of § 26-18-303.
1. In General. In such form and at such time as the Secretary of the Department of Finance and Administration shall prescribe by rule, any person shall be allowed to appeal to the secretary after the filing of a notice of a lien under this subchapter on the property or the rights to property of such person, for a release of such lien alleging an error in the filing of the notice of such lien.
2. Certification of Release. If the secretary determines that the filing of the notice of any lien was erroneous, the secretary shall expeditiously, and, to the extent practicable, within fourteen (14) days after such determination, issue a certificate of release of such lien and shall include in such certificate a statement that such filing was erroneous.
1. The Secretary of the Department of Finance and Administration shall request the General Assembly to appropriate funds and create positions for an Office of Problems Resolution and Tax Information, which shall resolve taxpayer problems directly and provide information to taxpayers concerning tax law. This office shall report directly to the secretary or his or her designee.
2. The secretary shall have the authority to establish the duties of the office. The office shall give highest priority to reviewing taxpayer problems and taking prompt and appropriate action to resolve problems and respond to taxpayers.
1. The Secretary of the Department of Finance and Administration shall establish a Tax Advisory Council consisting of representatives of the Arkansas Bar Association, the Arkansas Society of Certified Public Accountants, the Arkansas Society of Accountants, the Office of Problems Resolution and Tax Information, other taxpayer-oriented groups, and other representatives of the Revenue Division of the Department of Finance and Administration.
2. The council shall meet annually to discuss tax law changes, compliance problems, and other related matters, and it shall study methods to expedite claims for refunds, protests, appeals, and cases which take an inordinate amount of time to complete.
3. The council will develop and submit a report to the chairs of the House Committee on Revenue and Taxation and the Senate Committee on Revenue and Taxation.
1. A claim may be filed with the Department of Finance and Administration for any actual damages sustained as a result of any erroneous action taken in a collection activity. Each claimant applying for reimbursement shall file a claim in such form as may be prescribed by the Secretary of the Department of Finance and Administration. In order for the claim to be granted, the claimant must establish that:
  1. The actual damage resulted from an error made by the Revenue Division of the Department of Finance and Administration; and
  2. Prior to the actual damage, the taxpayer responded to all contacts by the division and provided all requested information or documentation sufficient to establish the taxpayer's position. This provision may be waived for reasonable cause.
2. 1. 1. Claims made pursuant to this section shall be filed within ninety (90) calendar days after the date the actual damage was sustained.
    2. Within thirty (30) calendar days after the date the claim is received, the claim shall be approved or denied.
  2. If a claim is denied, the taxpayer shall be notified in writing of the reason for the denial of the claim.
1. In addition to all other remedies provided by law for the collection of unpaid taxes, the Secretary of the Department of Finance and Administration may close the business of a noncompliant taxpayer as defined by § 26-18-104, subject to the administrative and judicial appeal procedures in this subchapter, if the noncompliant taxpayer for three (3) times within any consecutive twenty-four-month period fails to either:
  1. Report in the manner required by Arkansas law:
    1. Gross receipts or compensating use tax; or
    2. State income tax withholding for employees; or
  2. Remit the tax that is due for the reporting period for:
    1. Gross receipts or compensating use tax; or
    2. State income tax withholding for employees.
2. 1. The secretary shall give notice to the noncompliant taxpayer that the third delinquency in reporting or remitting tax in any consecutive twenty-four-month period will result in the closure of the business.
  2. The notice must be in writing and delivered to the noncompliant taxpayer by the United States Postal Service or by hand delivery.
3. 1. If the noncompliant taxpayer has a third delinquency in reporting or remitting tax in any consecutive twenty-four-month period after the issuance of the notice provided in subsection (b) of this section, the secretary shall notify the noncompliant taxpayer by certified mail or by hand delivery that the business will be closed within five (5) business days from the date of the notice unless the noncompliant taxpayer makes arrangements with the secretary to satisfy the tax delinquency.
  2. When the fifth day falls on a Saturday, Sunday, or legal holiday, the performance of the act is considered timely if it is performed on the next succeeding business day that is not a Saturday, Sunday, or legal holiday.
4. A noncompliant taxpayer may avoid closure of the business by:
  1. Filing all delinquent reports and by remitting the delinquent tax including any interest and penalty; or
  2. Entering into a payment agreement approved by the secretary to satisfy the tax delinquency.
5. After written notice delivered to a lottery retailer by the United States Postal Service or by hand delivery, the secretary may pursue a remedy under this subchapter against a lottery retailer as a noncompliant taxpayer upon receiving a referral from the Office of the Arkansas Lottery under § 23-115-605.
1. A noncompliant taxpayer may request an administrative hearing concerning the decision of the Secretary of the Department of Finance and Administration to close the noncompliant taxpayer's business by following the procedures in this section.
2. Within five (5) business days after the delivery or attempted delivery of the notice required by § 26-18-1001(c), the noncompliant taxpayer may file a written protest, signed by the noncompliant taxpayer or his or her authorized agent, stating the reasons for opposing the closure of the business and requesting an administrative hearing.
3. 1. A noncompliant taxpayer may request that an administrative hearing be held in person, by telephone, upon written documents furnished by the noncompliant taxpayer, or upon written documents and any evidence produced by the noncompliant taxpayer at an administrative hearing.
  2. The secretary has the discretion to determine whether an administrative hearing at which testimony is to be presented will be conducted in person or by telephone.
  3. A noncompliant taxpayer who requests an administrative hearing based upon written documents is not entitled to any other administrative hearing prior to the hearing officer's rendering a decision.
4. The administrative hearing will be conducted by a hearing officer appointed by the secretary under § 26-18-405.
5. 1. The hearing officer will set the time and place for a hearing and will give the noncompliant taxpayer notice of the hearing.
  2. At the administrative hearing, the noncompliant taxpayer may be represented by an authorized representative and may present evidence in support of his or her position.
6. 1. The hearing may be held in any city in which the Revenue Division of the Department of Finance and Administration maintains a field audit district office or in such other city as the secretary may designate.
  2. The administrative hearing will be held within fourteen (14) calendar days of receipt by the secretary of the request for hearing.
7. The administrative hearing and determinations made by the hearing officer under this subchapter are not subject to the provisions of the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
8. The defense or defenses to the closure of a business under this subchapter are:
  1. Written proof that the noncompliant taxpayer filed all delinquent returns and paid the delinquent tax due including interest and penalty; or
  2. That the noncompliant taxpayer has entered into a written payment agreement, approved by the secretary, to satisfy the tax delinquency.
9. The decision of the hearing officer must be in writing with copies delivered to the noncompliant taxpayer and the Department of Finance and Administration by the United States Postal Service or by hand delivery.
10. A decision of the hearing officer to sustain the secretary's decision to close the business of the noncompliant taxpayer is effective twenty (20) days after the date of the decision and, except as provided under § 26-18-1003, acts as an injunction prohibiting further operation of the business.
1. As used in this section:
  1. “Administrative decision” means a decision issued under § 26-18-1002 to affirm the decision of the Secretary of the Department of Finance and Administration to close the business of a noncompliant taxpayer;
  2. “Business” means a business subject to an administrative decision; and
  3. “Business closure order” means a notice of closure issued by the secretary under § 26-18-1001.
2. 1. A noncompliant taxpayer may seek judicial relief from an administrative decision by filing suit within twenty (20) calendar days of the date of the administrative decision.
  2. Jurisdiction for a suit under this section shall be in the Pulaski County Circuit Court or the circuit court of the county where the noncompliant taxpayer resides or has his or her principal place of business, where the matter shall be tried de novo.
3. 1. 1. A noncompliant taxpayer shall not operate a business after twenty (20) calendar days from issuance of an administrative decision unless the noncompliant taxpayer obtains an order from the circuit court staying the effect of the administrative decision.
    2. An order of a circuit court to stay the effect of an administrative decision may be revoked if the secretary provides proof that the taxpayer has failed to timely file returns for or make full payment of the taxes identified in § 26-18-1001(a) after the date suit is filed under this section.
  2. If a noncompliant taxpayer fails to obtain an order staying the effect of the administrative decision or if an order staying the effect of the administrative decision is later revoked, the secretary shall follow the procedures in §§ 26-18-1004 and 26-18-1005 to enforce the closure of the business pending the outcome of the suit filed under this section.
4. The noncompliant taxpayer or the secretary may file an appeal of the circuit court decision to the appropriate appellate court as provided by law.
5. 1. If a circuit court issues an order under this section affirming a business closure order, the order of the circuit court shall constitute an injunction prohibiting further operation of the business.
  2. In order to operate a business while an appeal is pending under subsection (d) of this section, a noncompliant taxpayer shall obtain an order from the appellate court staying the decision of the circuit court.
6. The procedures established by this section are the sole methods for seeking judicial relief from an administrative decision.
7. A noncompliant taxpayer shall not continue to operate a business if:
  1. The noncompliant taxpayer fails to seek judicial relief from a business closure order under this section;
  2. The noncompliant taxpayer fails to obtain a stay of the effect of a business closure order under subsections (c) and (e) of this section; or
  3. A business closure order is upheld on an appeal filed under subsection (d) of this section.
8. Upon conviction, any person responsible for the decision to operate a business in violation of this subchapter is guilty of a Class A misdemeanor.
1. If a noncompliant taxpayer fails to timely seek administrative or judicial review of a business closure decision or if the business closure decision is affirmed after administrative or judicial review, the Secretary of the Department of Finance and Administration shall affix a written notice to all entrances of the business that:
  1. Identifies the business as being subject to a business closure order; and
  2. States that the business is prohibited from further operation.
2. 1. The secretary may also lock or otherwise secure the business so that it may not be operated.
  2. However, if the business is located in the noncompliant taxpayer's home, the secretary shall not lock or otherwise secure the business but may post the notice under subsection (a) of this section.
3. The secretary may request the assistance of the Division of Arkansas State Police or any state or local law enforcement official to post the notice or to secure the business as authorized in this section.
4. Any taxpayer information disclosed by the secretary under the procedures outlined in this section shall not be subject to the confidentiality provisions of § 26-18-303.
1. After the decision to close the noncompliant taxpayer's business becomes final, the Secretary of the Department of Finance and Administration shall contact the appropriate administrative body responsible for granting licenses to operate the business and report the closure of the business.
2. The closure of a business under this subchapter shall be grounds for the suspension or revocation of any business license granted under the laws of the State of Arkansas, excluding professional licenses.
1. As used in this subchapter, “electronic funds transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account, commonly referenced as either an automated clearinghouse credit or an automated clearinghouse debit.
2. A transfer of funds by wire transfer which contains no electronic record from which to identify the taxpayer, tax type, tax account number, and tax period is not an electronic funds transfer.
1. 1. If the Secretary of the Department of Finance and Administration determines that a taxpayer's monthly liability for the following taxes for any calendar year equals or exceeds twenty thousand dollars ($20,000), the taxpayer shall pay any tax due by electronic funds transfer:
    1. Income withholding taxes under the Arkansas Income Tax Withholding Act of 1965, § 26-51-901 et seq.;
    2. Gross receipts or sales taxes under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., §§ 26-74-201 — 26-75-705, or the Local Government Bond Act of 1985, § 14-164-301 et seq.;
    3. Compensating or use taxes under the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.;
    4. Privilege taxes;
    5. Special alcoholic beverage excise taxes under § 3-7-201;
    6. Alcoholic beverage supplemental taxes under §§ 3-9-213 and 3-9-223; and
    7. Any other taxes supplemental to the taxes in subdivisions (a)(1)(A)-(F) of this section or required to be collected and remitted in the same manner as sales or use taxes or any other law of this state.
  2. If the secretary determines that a taxpayer's monthly liability for the following taxes for any calendar year equals or exceeds twenty thousand dollars ($20,000), the taxpayer shall pay the taxes due by electronic funds transfer:
    1. Taxes on tobacco products under the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.;
    2. Severance taxes under §§ 26-58-101 — 26-58-303; or
    3. Taxes on spirituous liquors, wines, malt liquors, and beer under §§ 3-5-101 — 3-7-114.
  3. If the secretary determines that a taxpayer's monthly liability for soft drink taxes under the Arkansas Soft Drink Tax Act, § 26-57-901 et seq., for any calendar year equals or exceeds twenty thousand dollars ($20,000), the taxpayer shall pay the taxes due by electronic funds transfer.
2. Monthly liability for taxes shall be determined by the secretary on the basis of average monthly liability for the preceding year.
3. 1. The transfer shall be made no later than the day before the due date for payment of the taxes so that payment of the taxes is received by the secretary on or before the due date for payment of the taxes as required by the laws of this state.
  2. 1. A taxpayer who pays income withholding tax by electronic funds transfer or through the state module of the electronic funds transfer payment system of the United States Department of the Treasury in the time and manner required by this section shall not be required to file a monthly withholding return.
    2. However, the taxpayer shall annually file a withholding return, setting forth the basis for each monthly payment made during the year by electronic funds transfer or through the state module of the electronic funds transfer payment system of the United States Department of the Treasury, on or before the fifteenth day following the end of each year.
    3. The annual withholding return shall be made on such a form and shall include such information as the secretary prescribes.
  3. Except as otherwise provided by this subchapter, no taxpayer required to pay tax by electronic funds transfer or who remits tax through the state module of the electronic funds transfer payment system of the United States Department of the Treasury shall be relieved from filing returns or complying with all other requirements of state tax laws.
  4. 1. For any withholding tax reporting period, a company or any other business enterprise that provides the service of reporting and remitting withholding tax on the wages paid to Arkansas employees by other employers shall remit all such withholding taxes to the secretary by electronic funds transfer.
    2. However, a company or business that provides tax reporting and remitting services shall not be required to remit withholding taxes by electronic funds transfer if the company or business provides those services for fewer than one hundred (100) Arkansas employers.
    3. As used in this subdivision (c)(4), “Arkansas employer” means any employer required by Arkansas law to withhold, report, and remit Arkansas income tax on the wages, salary, or other compensation paid to its employees within this state.
  5. 1. If the Federal Reserve Bank is closed on a due date that prohibits a taxpayer from being able to make a payment through electronic funds transfer, the payment shall be accepted as timely if made on the next day the Federal Reserve Bank is open.
    2. A return filed in conjunction with a remittance that cannot be made due to the closure of the Federal Reserve Bank shall be accepted as timely if filed in conjunction with the payment on the next day the Federal Reserve Bank is open.
4. The following may elect to utilize the state module of the electronic funds transfer payment system of the United States Department of the Treasury to pay monthly income withholding taxes by electronic funds transfer:
  1. Any taxpayer who is not required by subdivision (a)(1) of this section to pay income withholding taxes by electronic funds transfer; or
  2. Any business that provides tax reporting and remitting services that is not required by subdivision (c)(4) of this section to pay income withholding taxes by electronic funds transfer.
1. If the Secretary of the Department of Finance and Administration determines that a corporation's estimated quarterly state income tax liability under § 26-51-911 et seq. equals or exceeds twenty thousand dollars ($20,000), the corporation shall pay the quarterly income taxes due by electronic funds transfer.
2. A corporation's quarterly liability shall be determined on the basis of average quarterly liability for the preceding year.
3. 1. The transfer shall be made no later than the day before the due date for payment of the taxes so that payment of the taxes is received by the secretary on or before the due date for payment of the taxes as required by the laws of this state.
  2. If the corporation's income tax payment is timely made by electronic funds transfer, the corporation is not required to file a quarterly estimated tax declaration.
1. In addition to the penalties imposed under the Arkansas Tax Procedure Act, § 26-18-101 et seq., a taxpayer required to pay taxes by electronic funds transfer who fails to so pay the amount required under any state law on or before the due date for payment of the taxes shall be assessed a penalty of five percent (5%) of the amount of taxes due.
2. In addition to all other penalties imposed under this subchapter and the Arkansas Tax Procedure Act, § 26-18-101 et seq., a taxpayer required to pay sales taxes by electronic funds transfer who fails to so pay any of the sales taxes on or before the due date for payment of the taxes in the amounts required under § 26-52-501 or § 26-52-512 shall not be entitled to the benefits contained in §§ 26-52-503 and 26-52-512.
3. 1. With respect to an electronic funds transfer by automated clearinghouse debit, “to pay taxes by electronic funds transfer” means that the following conditions are met on or before the due date for such payment:
    1. The taxpayer initiates the automated clearinghouse debit by calling the designated toll-free telephone number by 3:00 p.m. on the last business day prior to the due date;
    2. The taxpayer accurately provides the Secretary of the Department of Finance and Administration with sufficient information from which the payment may be applied to the correct account, including, but not limited to, the taxpayer's name, account number, tax type, tax period, and the amount of the payment; and
    3. The taxpayer's bank account designated as the account to be debited contains adequate funds to cover the payment of taxes by debit transfer at the time the debit transaction is initiated and continuing through the due date of the tax payment.
  2. With respect to an electronic funds transfer by automated clearinghouse credit, “to pay taxes by electronic funds transfer” means that the following conditions are met on or before the due date for the payment:
    1. 1. The taxpayer initiates a successful prenote or test transaction containing necessary information in cash concentration or disbursement plus tax payment addendum (CCD + TXP) format.
      2. “Tax payment addendum format” means a technical format for the communication of limited tax remittance data accompanying a payment through the automated clearinghouse system and includes a list of standard tax-type and account-type codes;
    2. The transfer contains an electronic addenda which allows the secretary to identify the taxpayer, tax account number, tax payment amount, tax type, and tax period in accordance with instructions provided by the secretary;
    3. The taxpayer transfers the amount of funds due; and
    4. The taxpayer's designated bank account contains adequate funds to cover the credit transfer at the time the credit transaction is initiated and continuing through the due date of the tax payment.
  3. 1. A taxpayer is considered to have failed to pay taxes by electronic funds transfer if the conditions stated in subdivision (c)(1) or subdivision (c)(2) of this section are not met.
    2. The secretary will notify the taxpayer in writing of the failure to meet the conditions with respect to a particular reporting period.
    3. Subsequent failures to meet the prescribed conditions shall result in the assessment of penalties described in subsection (a) of this section without necessity of additional written notice.
1. The Secretary of the Department of Finance and Administration is authorized and directed to enter into the Streamlined Sales and Use Tax Agreement with one (1) or more states to simplify and modernize sales and use tax administration in order to substantially reduce the burden of tax compliance for all sellers and for all types of commerce.
2. In furtherance of the agreement, the secretary is authorized to act jointly with other states that are members of the agreement to establish standards for certification of a certified service provider and certified automated system and establish performance standards for multistate sellers.
3. The secretary is further authorized to take other actions reasonably required to implement the provisions set forth in this chapter.
4. Other actions authorized by this section include, but are not limited to, the adoption of rules and the joint procurement, with other member states, of goods and services in furtherance of the cooperative agreement.
5. The secretary or his or her designee is authorized to represent this state before the other states that are signatories to the agreement.
1. No provision of the agreement authorized by this chapter in whole or part invalidates or amends any provision of the law of this state.
2. Adoption of the agreement by this state does not amend or modify any law of this state.
3. Implementation of any condition of the agreement in this state, whether adopted before, at, or after membership of this state in the agreement, must be by the action of this state.
1. Uniform State Rate.
  1. Limiting the number of state rates;
  2. Limiting the application of maximums on the amount of state tax that is due on a transaction; and
  3. Limiting the application of thresholds on the application of state tax.
2. Uniform Standards.
  1. The sourcing of transactions to taxing jurisdictions;
  2. The administration of exempt sales;
  3. The allowances a seller can take for bad debts; and
  4. Sales and use tax returns and remittances.
3. Uniform Definitions.
4. Central Registration.
5. No Nexus Attribution.
6. Local Sales and Use Taxes.
  1. Restricting variances between the state and local tax bases;
  2. Requiring states to administer any sales and use taxes levied by local jurisdictions within the state so that sellers collecting and remitting these taxes will not have to register or file returns with, remit funds to, or be subject to independent audits from local taxing jurisdictions;
  3. Restricting the frequency of changes in the local sales and use tax rates and setting effective dates for the application of local jurisdictional boundary changes to local sales and use taxes; and
  4. Providing notice of changes in local sales and use tax rates and of changes in the boundaries of local taxing jurisdictions.
7. Monetary Allowances.
8. State Compliance.
9. Consumer Privacy.
10. Advisory Councils.
1. The agreement authorized by this chapter is an accord among individual cooperating sovereigns in furtherance of their governmental functions.
2. The agreement provides a mechanism among the member states to establish and maintain a cooperative, simplified system for the application and administration of sales and use taxes under the duly adopted law of each member state.
1. 1. The agreement authorized by this chapter binds and inures only to the benefit of this state and the other member states.
  2. No person, other than a member state, is an intended beneficiary of the agreement.
  3. Any benefit to a person other than a state is established by the law of this state and the other member states and not by the terms of the agreement.
2. 1. Consistent with subsection (a) of this section, no person shall have any cause of action or defense under the agreement or by virtue of this state's approval of the agreement.
  2. No person may challenge, in any action brought under any provision of law, any action or inaction by any department, agency, or other instrumentality of this state, or any political subdivision of this state on the ground that the action or inaction is inconsistent with the agreement.
3. No law of this state, or the application thereof, may be declared invalid as to any person or circumstance on the ground that the provision or application is inconsistent with the agreement.
1. 1. A certified service provider is the agent of a seller, with whom the certified service provider has contracted, for the collection and remittance of sales and use taxes.
  2. As the seller's agent, the certified service provider is liable for sales and use tax due each member state on all sales transactions it processes for the seller except as set out in this section.
  3. A seller that contracts with a certified service provider is not liable to the state for sales or use tax due on transactions processed by the certified service provider unless the seller misrepresented the type of items it sells or committed fraud.
  4. In the absence of probable cause to believe that the seller has committed fraud or made a material misrepresentation, the seller is not subject to audit on the transactions processed by the certified service provider.
  5. A seller is subject to audit for transactions not processed by the certified service provider.
  6. The member states acting jointly may perform a system check of the seller and review the seller's procedures to determine if the certified service provider's system is functioning properly and the extent to which the seller's transactions are being processed by the certified service provider.
2. 1. A person that provides a certified automated system is responsible for the proper functioning of that system and is liable to the state for underpayments of tax attributable to errors in the functioning of the certified automated system.
  2. A seller that uses a certified automated system remains responsible and is liable to the state for reporting and remitting tax.
3. A seller that has a proprietary system for determining the amount of tax due on transactions and has signed an agreement establishing a performance standard for that system is liable for the failure of the system to meet the performance standard.
1. The Department of Finance and Administration shall participate in an online sales and use tax registration system in cooperation with the states that are members of the agreement.(b) The department shall not use a seller's registration with the online sales and use tax registration system as provided in subsection (a) of this section and any subsequent collection of a sales or use tax in determining whether the seller has nexus with the state for any tax at any time.
  1. Model 1 seller;
  2. Model 2 seller;
  3. Model 3 seller; or
  4. Model 4 seller.
1. Except as provided in subsection (c) of this section, a seller or certified service provider using a database provided by the Department of Finance and Administration shall not be liable to the State of Arkansas or its local jurisdictions for charging and collecting the incorrect amount of sales or use tax if the seller or the certified service provider relied on erroneous data provided by the department on sales or use tax rates, boundaries, taxing jurisdiction assignments, or the taxability matrix.
2. The department shall promulgate rules to provide a purchaser relief from a sales or use tax, penalties, and interest for failing to pay the correct amount of sales or use tax if erroneous information on sales or use tax rates, boundaries, or taxing jurisdiction assignments or in the taxability matrix provided by the department has been relied on by the purchaser, the purchaser's seller, or the purchaser's certified service provider.
3. 1. If the department provides an address-based boundary database for assigning taxing jurisdictions and their associated sales or use tax rates, the department may cease providing the relief from liability provided in subsections (a) and (b) of this section if the department gave the seller or the certified service provider adequate notice.
  2. If a seller demonstrates that requiring the use of the address-based database would create an undue hardship, the department may extend the relief from liability to the seller for a designated period of time.
4. 1. If the effective date of a state sales or use tax rate change is less than thirty (30) days from the enactment of the statute providing the rate change, a seller is relieved of liability for failing to collect sales or use tax at the new rate if:
    1. The seller collected sales or use tax at the effective rate immediately preceding the change; and
    2. The seller's failure to collect at the newly effective sales or use tax rate does not extend beyond thirty (30) days after the date of enactment of the new sales or use tax rate.
  2. The seller is not relieved of liability if the seller fraudulently failed to collect at the new sales or use tax rate or solicited purchasers based on the immediately preceding effective sales or use tax rate.
1. The Department of Finance and Administration shall administer use-based exemptions and entity-based exemptions when practicable through a direct pay permit, an exemption certificate, or another means that does not burden sellers.
2. 1. A seller that follows the exemption requirements as prescribed by the Secretary of the Department of Finance and Administration shall be relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption.
  2. If it is determined that the purchaser improperly claimed an exemption, the department shall hold the purchaser liable for the nonpayment of tax.
  3. The relief from liability provided in subdivision (b)(1) of this section does not apply to a seller that:
    1. Fraudulently fails to collect the sales or use tax;
    2. Solicits a purchaser to participate in the unlawful claim of an exemption; or
    3. Accepts an exemption certificate from a purchaser claiming an entity-based exemption when:
      1. The subject of the transaction sought to be covered by the exemption certificate is actually received by the purchaser at a location operated by the seller; and
      2. The state where that location resides provides an exemption certificate that clearly and affirmatively indicates that the claimed exemption is not available in that state.
  4. 1. A seller may obtain a fully completed exemption certificate or capture the relevant data elements required by the department within ninety (90) days after the date of sale.
    2. 1. If the seller has not obtained an exemption certificate or all relevant data elements and the department makes a request for substantiation of the exemption, the seller has one hundred twenty (120) days from the date of the request to prove by other means that the transaction was not subject to sales or use tax or to obtain in good faith a fully completed exemption certificate from the purchaser.
      2. As used in subdivision (b)(4)(B)(i) of this section, “good faith” means that the seller obtains a certificate that claims an exemption that:
        
        Was statutorily available on the date of the transaction in the jurisdiction where the transaction is sourced;
        
        Could be applicable to the item being purchased; and
        
        Is reasonable for the purchaser's type of business.
3. A third party vendor may claim a resale exemption based on an exemption certificate provided by its customer or any other acceptable information available to the third party vendor evidencing qualification for a resale exemption regardless of whether the customer is registered with the department to collect and remit sales or use tax.
1. The Secretary of the Department of Finance and Administration shall promulgate rules to provide:
  1. An alternative method for making payments if an electronic funds transfer fails on its due date; and
  2. A rounding algorithm for sales or use tax computation.
2. 1. The Department of Finance and Administration shall develop a simplified electronic return to be used for all state and local sales and use taxes levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The department shall provide a separate reporting form for any other special or miscellaneous excise taxes so as not to violate the agreement.
  3. The department shall allow all sellers, whether or not the seller is registered under the agreement, to file a simplified electronic return.
  4. A model 4 seller that does not have a legal requirement to register in Arkansas is not required to submit information relating to exempt sales on the simplified electronic return.
  5. A seller that elects to file a simplified electronic return shall give at least a three-month notice of the seller's intent to discontinue filing a simplified electronic return.
3. The department shall allow a seller to elect to compute the sales or use tax due on a transaction on an item or an invoice basis and shall allow the rounding rule to be applied to the aggregated state and local sales or use taxes.
4. 1. A seller that is registered under the agreement and indicated at the time of registration that it does not anticipate making a sale that would be sourced to Arkansas is not required to file a return.
  2. If the seller makes a taxable sale sourced to Arkansas, the seller shall file a return on or before the twentieth day of the month following the sale.
5. 1. A seller registered under the agreement that does not have a legal requirement to register in Arkansas shall be given a minimum of thirty (30) days' notice before the department establishes a tax liability based solely on the seller's failure to timely file.
  2. However, the department may establish a tax liability based solely on a seller's failure to timely file if the seller has a history of nonfiling or late filing.
1. 1. A cause of action against the seller for over-collected sales or use taxes does not accrue until sixty (60) days after a purchaser has provided written notice to the seller.
  2. The written notice to the seller required in subdivision (a)(1) of this section must contain the information necessary to determine the validity of the request.
2. In connection with a purchaser's request from a seller of over-collected sales or use taxes, a seller shall be presumed to have a reasonable business practice if in the collection of the sales or use taxes, the seller:
  1. Uses either a certified service provider or a certified automated system, including a certified proprietary system, that is certified by the State of Arkansas; and
  2. Has remitted to the Department of Finance and Administration all taxes collected less any deductions, credits, or collection allowances.
1. The Secretary of the Department of Finance and Administration shall provide amnesty for uncollected or unpaid sales or use tax to a seller that registers to pay or to collect and remit applicable sales or use tax on sales made to purchasers in the state in accordance with the terms of the agreement, provided that the seller was not registered to collect sales and use tax in the State of Arkansas in the twelve-month period preceding the effective date of the state's participation in the agreement.
2. The amnesty shall preclude assessment for uncollected or unpaid sales or use tax, penalty, and interest for sales made during the period that the seller was not registered in the state, provided registration occurs within twelve (12) months of the date the state is found to be in compliance with the agreement.
3. The amnesty shall not be available to a seller with respect to any matter or matters for which the seller received notice of the commencement of an audit and the audit is not yet finally resolved, including any related administrative and judicial processes.
4. The amnesty shall not be available for sales or use taxes already paid or remitted to the Department of Finance and Administration or to taxes collected by the seller.
5. The amnesty shall be fully effective, absent the seller's fraud or intentional misrepresentations of a material fact, so long as the seller continues its Arkansas sales and use tax registration and continues payment or collection and remittance of applicable sales or use taxes for a period of at least thirty-six (36) months from the date amnesty was awarded.
6. The amnesty shall be applicable only to sales or use taxes due from a seller in its capacity as a seller and not to sales or use taxes due from a seller in its capacity as a purchaser.
7. The secretary shall also provide amnesty to a seller for uncollected or unpaid sales or use tax if:
  1. The seller was already registered with the agreement at the time Arkansas became a full member of the agreement; and
  2. The seller was not registered to collect sales and use tax in Arkansas in the twelve-month period preceding the effective date of Arkansas's full membership in the agreement.
1. The Secretary of the Department of Finance and Administration may:
  1. Certify service providers and automated systems to aid in the administration of sales and use tax collections; and
  2. Provide a monetary allowance to the certified service providers, certified automated systems, and to sellers that do not have a requirement to register to collect the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. 1. A certified service provider or model 2 seller using a certified automated system is not liable to the State of Arkansas or its local jurisdictions for charging and collecting the incorrect amount of sales or use tax.
  2. The relief from liability provided in this section is not available to a certified service provider or model 2 seller that has incorrectly classified an item or transaction into a product category certified by the state.
  3. 1. If the Department of Finance and Administration determines that an item or transaction is incorrectly classified as to its taxability, it shall notify the certified service provider or model 2 seller of the incorrect classification.
    2. The certified service provider or model 2 seller shall have ten (10) days to revise the classification after receipt of the notice.
    3. Upon the expiration of ten (10) days, the certified service provider or model 2 seller is liable for the failure to collect the correct amount of sales or use tax due.
3. A certified service provider has the same relief from liability as sellers provided in § 26-21-107.
1. The purpose of this section is to set forth a policy to protect the confidentiality rights of all participants in the agreement system and the privacy interests of consumers who deal with model 1 sellers.
2. As used in this section:
  1. “Anonymous data” means information that does not identify a person;
  2. “Confidential taxpayer information” means all information that is protected under Arkansas's laws, rules, and privileges; and
  3. “Personally identifiable information” means information that identifies a person.
3. With very limited exceptions, a certified service provider shall perform its tax calculation, remittance, and reporting functions without retaining the personally identifiable information of consumers.
4. When any personally identifiable information that has been collected and retained is no longer required for the purposes of verifying the validity of an exemption, the personally identifiable information shall no longer be retained by the Department of Finance and Administration.
5. When personally identifiable information regarding an individual is retained, the department shall provide reasonable access by such individual to his or her own information in the state's possession and a right to correct any inaccurately recorded information.
6. If anyone other than the state or a person authorized by this state's law or the agreement seeks to discover personally identifiable information, a reasonable and timely effort to notify the individual indentified in the personally identifiable information of the request shall be made.
7. The privacy policy in this section is subject to enforcement in the same manner as set out in § 26-18-303.
8. All laws and rules regarding the collection, use, and maintenance of confidential taxpayer information remain fully applicable and binding.
1. It is the intent of this act that the following objectives shall apply to the operation of the property tax system for Arkansas taxpayers:
  1. To be taxed fairly and assessed equitably throughout the state;
  2. To have access to information concerning how the system of property taxation works and how their tax dollars are spent;
  3. To participate in the determination of tax rates or millage rates levied in local taxing units;
  4. To receive fair and courteous treatment throughout the property tax system;
  5. To review the reassessments and methodology used in determining the value of their properties and that of comparable properties;
  6. To receive a prompt response by government officials to inquiries regarding the value of their properties;
  7. To require government officials or others responsible for the valuation of property to review and correct any measurement error to the nearest foot, clerical error, or other technical error which occurred in the valuation of their properties;
  8. To be sent a notice setting forth the following:
    1. The amount of any change in the value of their properties;
    2. The right of the taxpayer to appeal such a change; and
    3. The procedures which must be followed on appeal, including the name, title, address, and telephone number of the secretary of the county equalization board to whom the appeal and any supporting documentation should be directed, the deadline for requesting a hearing, and the proof required for adjustment of value;
  9. To complete all steps in the appeal process before paying any disputed taxes;
  10. To receive written notification of the outcome of any appeal; and
  11. To recover any overpayment of taxes resulting from erroneous assessments within three (3) years after payment.
2. The rights enumerated in subsection (a) of this section shall be prominently displayed in each county assessor's and county collector's office in Arkansas.
3. 1. The provisions of subsections (a) and (b) of this section are goals and objectives only and no person or entity shall have a civil cause of action for any alleged breach or violation of any of these goals and objectives.
  2. However, subdivision (c)(1) of this section shall not be interpreted or construed to limit the rights of any taxpayer under any other law of this state.
1. A county collector shall send a property taxpayer a yearly notice concerning his or her rights under the provisions of Arkansas Constitution, Amendment 79, containing the following:
  1. A statement that the assessed value of a homestead used as a principal place of residence and owned by a taxpayer who is disabled or sixty-five (65) years of age or older shall be the lower of the assessed value at the time the taxpayer qualified for the property tax relief under Arkansas Constitution, Amendment 79, or a later assessed value; and
  2. The county assessor's contact information.
2. The yearly notice required in subsection (a) of this section may be sent with the taxpayer's tax statement or by separate first-class mail.
1. The Arkansas Public Service Commission shall have the full power and authority in the administration of the tax laws of this state to file with the county judge, county clerk, and county assessor of each county not later than ten (10) days before the time for the beginning of the assessment of property by the county assessors a certificate showing the percentage of true and full market or actual value that it has used, or will use, in valuing for taxation for that year the property the commission is required to assess.
2. It shall be the duty of the county assessors and county equalization boards and county judges to adopt the same basis of valuation of property in their counties for the purpose of taxation as that certified by the commission.
1. The Arkansas Public Service Commission shall have the full power and authority in the administration of the tax laws of this state to answer all questions that may arise in the construction of any statute affecting the assessment, equalization, or collection of taxes, in accordance with the advice and opinion of the Attorney General.
2. Such opinion and the rules, regulations, orders, and instructions of the commission prescribed and issued in conformity therewith shall be binding upon all officers, who shall faithfully observe and obey the same unless and until they are reversed, annulled, or modified by a court of competent jurisdiction.
1. The Arkansas Public Service Commission shall have the full power and authority in the administration of the tax laws of this state to summon witnesses to appear, give testimony, and produce records, books, papers, documents, and all other information of any kind or character required relating to any matter which the commission shall have authority to investigate and determine.
2. 1. 1. Witnesses may be summoned by ordinary subpoena or by subpoena duces tecum issued by any member of the commission, or by the secretary, in the name of the commission, directed to any county sheriff of Arkansas, and returnable to the commission, which subpoena may be served in like manner as process issued out of any circuit court; or
    2. The subpoenas may be served by registered mail, addressed to the witness with return receipt demanded.
  2. In either case, the subpoenas must be served at least five (5) days previously to the day named therein for the appearance of the witness.
1. 1. For the purpose of making any investigation of any company, firm, corporation, person, association, copartnership, or public utility, subject to the provisions of the laws which the Arkansas Public Service Commission is required to administer, the commission may appoint, by an order in writing, an agent whose duties shall be prescribed in that order.
  2. In the discharge of his or her duties, the agent shall have every power of an inquisitorial nature granted by the law to the commission and the same powers as a notary public, with regard to the taking of depositions; and all powers given by law to a notary public relative to deposition are given to the agent.
2. Except in his or her report to the commission, or when called on to testify in any court or proceedings, any agent who shall divulge any information acquired by him or her in respect to the transactions, property, or business of any company, firm, or corporation, person, association, copartnership, or public utility, while acting or claiming to act under such order, shall be fined not less than fifty dollars ($50.00) nor more than one hundred dollars ($100) and shall thereafter be disqualified from acting as agent or in any other capacity under appointment or employment of the commission.
1. The Arkansas Public Service Commission shall have the full power and authority in the administration of the tax laws of this state to conduct any number of investigations, contemporaneously, through different agents, and may delegate to any agent the taking of all testimony bearing upon any investigation or hearing.
2. The decision of the commission shall be based upon its examination of all testimony and records.
3. The recommendations made by an agent shall be advisory only and shall not preclude the taking of further testimony nor further investigation, if the commission so orders.
1. The Arkansas Public Service Commission shall have the full power and authority in the administration of the tax laws of this state to call a group meeting of two (2) or more county assessors at such time and place as it may designate, due notice of which shall be given by the commission.
2. 1. For attending these meetings, county assessors shall receive no compensation but shall be reimbursed for their actual and necessary expenses in attending the meeting, including only the fare necessarily spent in going to and returning from the place of the meeting.
  2. When such claims are verified by oath and approved by the commission or any member thereof, they shall be presented to the county court which shall make an order showing the amount due and directing the county clerk to draw his or her warrant on the county treasurer to be paid out of any general funds belonging to the county.
1. 1. In case any witness who has been summoned to testify before the Arkansas Public Service Commission shall fail or refuse to testify to or make answer to any material question relating to any matter under investigation or to produce any records, books, papers, or other documents in his or her custody or control when required to do so, any circuit court, or any circuit judge thereof, upon application of any member of the commission, shall issue an attachment for the witness and compel him or her to comply with the summons and to attend before the commission and produce the books, documents, papers, or records and give testimony upon matters about which he or she may be lawfully interrogated.
  2. The circuit court, or circuit judge thereof, may punish a witness for contempt as in the case of disobedience of a like subpoena issued from the circuit court for the refusal to testify in any cases pending therein.
2. 1. No witness shall be excused from attending or testifying or from producing books, papers, records, accounts, and other documents before the commission, or in obedience to its subpoena, on the ground or for the reason that the testimony, documentary or otherwise, required of him or her may tend to incriminate him or her or subject him or her to a penalty or forfeiture.
  2. No person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he or she may testify or produce evidence, documentary or otherwise, before the commission, or in obedience to its subpoena. However, no person so testifying shall be exempt from prosecution and punishment for perjury committed in so testifying.
3. 1. Every witness who shall appear before the commission by its order shall receive for his or her attendance the fees and mileage allowed by law for witnesses in civil cases in circuit courts, which shall be audited and paid by the state in the same manner as other expenses of the commission are audited and paid, upon the presentation of the proper voucher sworn to by the witness and approved by the commission or the chair thereof.
  2. Witnesses summoned at the instance of parties other than the commission shall be paid by the party causing the witnesses to be summoned.
1. Any taxpayer aggrieved by the action or order of the Arkansas Public Service Commission respecting the assessment or equalization of property shall have the right of appeal to the circuit court and thence to the Supreme Court.
2. 1. All appeals from the commission involving the assessment or equalization of property locally assessed may be either to the circuit court of the county where the property is located or the Pulaski County Circuit Court.
  2. All appeals involving the assessment or equalization of property, the original assessment of which has been fixed by the commission, shall be to the Pulaski County Circuit Court.
3. All appeals shall be taken within thirty (30) days from the date of the action or order appealed from by filing a written notice with the commission and shall be tried de novo.
4. No appeal shall lie from the action or order of the commission on original assessments unless the property owner shall have first exhausted his or her remedy before the commission by way of petition for review.
1. The amount of taxes which may be levied for general purposes in any one (1) year by the constituted authorities of any city or town under the provisions of Arkansas Constitution, Article 12, § 4, may equal, but not exceed, the maximum amount of levy at any time fixed under Arkansas Constitution, Article 12, § 4.
2. This limitation shall not be construed to prohibit assessments on property adjacent to local improvements made in any city or town for the purpose of paying the costs and damages occasioned thereby.
1. 1. Any person having real or personal property assessed for taxation may appear in person or by attorney before the county court, at the time of the levy of taxes by it, or at the succeeding term thereafter, and by petition or remonstrance, object to the levy of any specific tax for illegality, and may by sworn petition, set forth and show any facts upon which the illegality rests.
  2. If the petition is based upon facts, it shall be the duty of the county court to determine both the law and the facts presented, and for that purpose, it shall hear any testimony offered.
  3. If the county court should rule against the objection so presented, the party objecting to the levy may appeal from the ruling to the circuit court of the county. Upon giving bond within ten (10) days, with good and sufficient security, in double the amount of specific tax levied upon the property of the party objecting, subject to the approval of the circuit court, and conditioned for the payment of the tax, should it be decided to have been lawfully levied, it shall operate as a supersedeas of the collection of the tax.
2. 1. The bond shall not operate to prevent the tax being placed upon the tax book.
  2. The bond shall be given to the State of Arkansas.
  3. In the event the levy shall finally be declared illegal, the judgment shall operate as an acquittal to the county collector and his or her securities for the noncollection of the tax.
  4. If the tax is finally declared legal, the county collector shall immediately proceed to collect it as in other cases, or by action on the appeal bond.
  5. Any taxpayer feeling himself or herself aggrieved by any such levy may, at any time before the returning of delinquent taxes by the county collector for that year, appeal as provided in this section.
  6. Any person interested in the levy of the tax may resist the petition to prevent a levy, either before the county court or in the circuit court on appeal.
  7. In all cases where an appeal is taken, the county clerk shall enter on the tax books, opposite the name of the party, tract, or lot of land, the supersedeas of the specific tax.
3. 1. The county court shall employ counsel to attend before it at the hearing, and, should it be appealed to the circuit court, the prosecuting attorney and, if to the Supreme Court, the Attorney General, shall appear in the interest and behalf of the levy of the tax.
  2. The real or personal property upon which the illegal specific tax as alleged to have been levied shall not be withheld from sale on account of any taxes for any purpose due or to become due upon it and which has not been paid as provided by law, and against the collection of which no petition has been filed.
1. Whenever the electors of any county of this state may levy a voluntary tax, it shall be unlawful for the county judge, the county court, or any other county official to use or allocate any moneys derived from any voluntary tax for purposes other than for which it was levied and collected.
2. Any county official violating the provisions of this section shall, upon conviction, be removed from office.
1. 1. Every city or county that adopts an ordinance levying a local sales and use tax which is collected by the Secretary of the Department of Finance and Administration shall submit the ordinance to the secretary at least forty-five (45) days prior to the election on the levy.
  2. The secretary shall review the ordinance to determine if the proposed levy complies with all statutory requirements and limitations, including a separate levy of the sales and use tax, and an authorized sales or use tax rate.
2. 1. The secretary shall approve or reject the ordinance and provide written notice to the city or county within fifteen (15) days of receipt of the ordinance.
  2. 1. If the ordinance is rejected, the secretary shall note the defects.
    2. If the ordinance is rejected and the city or county fails to correct the noted defects, any tax levied by the defective ordinance shall not be collected by the secretary.
3. Whenever a special election is called for the purpose of submitting an initiated measure which levies a city or county sales and use tax to be collected by the secretary, the county board of election commissioners shall submit the initiated measure to the secretary and the provisions of subsections (a) and (b) of this section shall apply.
4. No ordinance or initiated measure shall be deemed invalid because of the failure to submit the ordinance or measure to the secretary or to use a sample form, and such failure shall not constitute a cause of action to invalidate an ordinance or initiated measure.
1. The Arkansas Municipal League, the Association of Arkansas Counties, and the Department of Finance and Administration may jointly develop sample forms and ordinances for levying local sales and use taxes which comply with all statutory requirements and limitations.
2. The sample forms and ordinances will be reviewed regularly in order to comply with changes in the law.
1. When any person, firm, company, copartnership, association, or corporation whose property is required by law to be assessed for ad valorem taxation by the Tax Division of the Arkansas Public Service Commission shall file a petition with the Arkansas Public Service Commission or the Arkansas Transportation Commission [abolished] seeking review of the assessment, the chair of the commission having jurisdiction over the review shall, within ten (10) days of the filing of the petition, give notice to the Attorney General.
2. 1. Upon receipt of notice from the Arkansas Public Service Commission or the Arkansas Transportation Commission [abolished] that a person, firm, company, copartnership, association, or corporation whose property is required by law to be assessed for ad valorem taxation by the division has filed a petition for review of the assessment, the Attorney General shall undertake legal representation of the division and shall serve as chief counsel for the division during the pendency of the review before the commission having jurisdiction of the matter.
  2. The Attorney General shall be assisted by the division's legal counsel and on appeals to the Arkansas Transportation Commission [abolished] by the Arkansas Transportation Commission's [abolished] legal counsel.
  3. If any assessment made by the division is modified on review by order of the commission having jurisdiction of the matter, the Attorney General, after consulting with the administrator of the division, shall be empowered to appeal the commission order to the Pulaski County Circuit Court and shall continue to serve as chief counsel for the division during the appellate process, with the authority to appeal subsequent court orders.
1. 1. 1. There shall be a penalty of ten percent (10%) of all taxes due on all persons and property delinquent in assessment.
    2. Where the penalty of ten percent (10%) of the amount of all taxes due shall amount to less than one dollar ($1.00), the penalty shall be arbitrarily fixed at one dollar ($1.00).
  2. 1. All persons and property not listed for assessment with the county assessor on or before May 31 of the year in which the assessment is required, as provided by this chapter, shall be deemed to be delinquent in assessment, and the county assessor shall so designate it on his or her records that the county clerk may know each item of property and all persons so delinquent.
    2. It shall be the duty of the county officer designated by the county quorum court under § 26-28-102 to affix and extend the penalty provided in this section against each item of property and all persons delinquent in assessment.
  3. The penalty shall be collected by the county collector and shall be paid into the county general fund.
2. Between January 1 and June 5 of each year, each county assessor shall file with the Treasurer of State a sworn statement that he or she will comply with subsection (a) of this section. If a county assessor fails to file the statement by June 5, then the Treasurer of State shall withhold county turnback to that county until the statement is received by the Treasurer of State.
3. If the neglect is willful, the delinquent shall be deemed guilty of a misdemeanor and shall be fined in any sum not more than one thousand dollars ($1,000).
4. 1. In addition to the penalties for not assessing, delinquent persons shall be required to pay an additional fifty cents (50¢) for each list, which shall be utilized by the county assessor to help pay for the expense of assessing property, subject to appropriation by the quorum court.
  2. This additional sum shall be collected by the county collector in the usual manner and paid into the assessor's late assessment fee fund established on the books of the county treasurer.
  3. Moneys in the assessor's late assessment fee fund shall be allowed to accumulate and the fees collected shall not be used in the final tax settlement proration for the costs of operating the assessor's office.
1. It shall be unlawful for any person to refuse to give the county assessor or the appointed deputy his or her name and a complete and accurate description of his or her personal and real property, together with the location and value of it.
2. Any person so refusing, upon conviction, shall be guilty of a violation and shall be fined in any sum not less than ten dollars ($10.00) and not more than twenty-five dollars ($25.00).
1. All duties imposed by this subchapter on all state and county officers are declared to be mandatory, and any officer who neglects, fails, or refuses to perform any such duty shall be subject to removal from office and liable on his or her official bond for such neglect, failure, or refusal.
2. 1. Upon the refusal or failure of any state officer to perform any duty imposed upon him or her under the provisions of this subchapter, any citizen of the state may, and the Attorney General shall, institute in the proper court mandamus proceedings to compel the state officer to perform his or her duties.
  2. Upon the refusal or failure of any county officer to perform any duty imposed upon him or her under the provisions of this subchapter, any citizen of the county may, and the prosecuting attorney of the district including such county shall, institute in the proper court mandamus proceedings to compel the county officer to perform his or her duties.
1. It shall be the duty of each county assessor to keep his or her appraisal and assessment data and records current by securing the necessary field data and making changes in valuations as changes occur in land use and improvements, and as errors are discovered and corrected, so that his or her records will at all times show the valuation of property in accordance with the provisions of this subchapter.
2. Whenever land assessed on an acreage basis is subdivided into lots, the land shall be reassessed on the basis of lots, and whenever land is rezoned for a different use, the land shall be reassessed on the basis of its new classification.
1. The appraisal and assessment shall be according to value as required by Arkansas Constitution, Article 16, Section 5.
2. The percentage of true and full market or actual value to be used in the appraisal and assessment shall be fixed and certified by the Arkansas Public Service Commission as provided by § 26-24-104.
3. Until and unless a budget system is adopted with provisions for eliminating excessive and illegal tax rates and expenditures, the commission shall not fix and certify a percentage of true and full market or actual value in excess of twenty percent (20%).
1. 1. 1. The Assessment Coordination Division shall prepare a ratio study for the purpose of determining the average ratio of full assessed value to the true and full market or actual value of real property, by classifications, in each of the several counties and school districts of the state in the assessment year that reappraised values are placed on the assessment rolls.
    2. 1. This ratio study shall be based on sales-to-assessment ratios, supplemented with appraisal to assessment ratios as required to meet generally accepted statistical techniques.
      2. The study shall determine the actual assessment level of real estate as required by law, including the value of agricultural lands that qualify for use and productivity valuation, by classification such as residential, commercial and industrial, agricultural, and other classifications.
      3. No later than January 31 of every year, all counties shall report, by electronic transmission, sales data to the division. The sales data shall include:
        
        A listing of each property transferred under a warranty deed or special warranty deed;
        
        The consideration paid;
        
        The date of the sale;
        
        The parcel number;
        
        The legal description;
        
        The names of the grantor and grantee;
        
        The most recent assessed value of the property; and
        
        Other data prescribed by the division.
      4. The sales-to-assessment ratio study shall include sales data for the calendar year previous to the assessment year.
        
        In those instances when the number of appropriate sales from the calendar year previous to the assessment year is insufficient to present a statistically sound sample, the sales-to-assessment ratio study may include sales data for the three (3) calendar years previous to the assessment year.
        
        The division shall report the preliminary sales-to-assessment ratio studies to the county assessor and county judge on or before March 1 of the assessment year.
  2. The division shall supplement the sales-to-assessment ratio with appraisals as required and report the original combined real property ratios to the county assessor and county judge.
  3. In conducting the studies, the division shall use generally accepted valuation procedures, statistical compilation, and analysis techniques found in the International Association of Assessing Officers' Standard on Ratio Studies.
2. 1. 1. An annual ratio study for the purpose of determining the average ratio of assessed value to the true and full market or actual value of personal property in each of the several counties of the state shall also be made.
    2. This ratio study of personal property shall be based upon a physical examination of the records of each county assessor's office to determine the degree of compliance with the criteria as established by the Arkansas Commercial Personal Property Appraisal Manual .
  2. The personal property original ratio study shall be certified by the division to the county judge and county assessor of each county by September 15 of each year.
3. 1. On or before August 1 of each year the county assessor shall report to the division by total of items and value the total assessment of the county as made by the county assessor.
  2. 1. The county clerk shall file a report with the division showing the percent of true market or actual value at which the county equalization board has equalized the assessed values of the property of the county under the county equalization board's jurisdiction for the year, together with an abstract of the adjusted assessment by total of items and value.
    2. The report and abstract shall be filed each year no later than thirty (30) days after final adjournment of the county equalization board.
4. 1. Whenever any county assessor or deputy county assessor attends a school or instructional meeting pursuant to the request of the division, he or she shall be entitled to reimbursement for his or her travel expenses, which shall be paid by the division upon filing of a proper claim for the travel expenses.
  2. The county assessor and his or her deputies shall also be entitled to reimbursement for travel expenses within the county in performance of their duties as required by this section, which shall be paid by the county.
  3. 1. All reimbursements for travel expenses shall be limited to the actual and necessary expenses incurred.
    2. The total expenses incurred, other than for transportation, for travel within the county shall not exceed one-half (½) the daily maximum amount authorized for travel of state employees within the state, and, for travel outside the county, the amount shall not exceed the daily maximum amount authorized for travel of state employees within the state, in accordance with state travel laws and rules.
    3. The transportation expenses shall not exceed the actual amount paid, except that the reimbursement for use of a private automobile shall be at the same rate per mile as is allowed in the reimbursement of state employees under the state travel laws and rules for transportation expenses for each mile actually and necessarily traveled by the automobile, within and without the county.
5. 1. In addition to the other provisions of this section, whenever the September 15 ratio for the classifications of market value real estate, business personal property, auto and other personal property, or agricultural and timber falls below eighteen percent (18%) or above twenty-two percent (22%) of full fair market value, the county shall be deemed to have failed the ratio study and shall be subject to the corrective actions outlined in subsection (f) of this section.
  2. Furthermore, when a ratio study determines that the county does not meet the ratio standards found in the International Association of Assessing Officers' Standard on Ratio Studies, the county shall be deemed to have failed the ratio study and shall be subject to the corrective actions outlined in subsection (f) of this section.
  3. The division may conduct a county ratio study, in full or in part, at any time that the division determines that a county has engaged in inappropriate assessment roll changes or manipulations.
6. 1. 1. When a county has failed the ratio study, the division shall direct and supervise a detailed market value and assessment value analysis of the area or class indicating a deficiency in order to determine the political subdivisions and neighborhoods or appraisal methodology, or both, in need of assessment value adjustments.
    2. When appropriate assessment value adjustments are determined for the county, the county shall place the assessment value adjustments on the assessment rolls of the county in a manner that is most equitable for the taxpayers of the county for taxation according to the laws of this state.
    3. 1. The division and counties employing contracted appraisal services shall bear no additional expense for correcting a failed ratio study if the failure is found to be the fault of the contractor.
      2. The contractor shall bear the cost of these additional services.
  2. 1. In the case in which a county fails to place the assessment value adjustments on the assessment rolls of the county as directed by the division, the division may notify the disbursing agents of the State of Arkansas to withhold the funds accruing to the county from all sources until the time that the adjustments are made.
    2. If the adjustments are not made for one (1) year, the withheld funds shall not be reimbursed to the county and shall be deposited into the State General Government Fund, and withholding shall begin for the following year.
7. 1. If a county is aggrieved at the findings of the division, the county may appeal the findings of the division to the Director of the Assessment Coordination Division.
  2. The officials of each unit of government affected shall have the right to examine the records of the division that pertain to the ratio findings or value adjustment order for that unit of government.
1. Any countywide valuation review program begun in accordance with the requirements of § 26-26-305 [repealed] shall be deemed to be a countywide reappraisal of property pursuant to directive of law enacted by the General Assembly.
2. Any county which has begun but has not completed a countywide valuation review program in accordance with the requirements of § 26-26-305 [repealed] or otherwise on March 26, 1997, shall direct that a countywide reappraisal of property be completed, using, in part, valuations determined through the valuation review program for each parcel of taxable property reviewed to date.
3. The provisions of § 26-26-401 et seq. relative to the adjustment or rollback of millage levied for ad valorem tax purposes shall be applicable where a countywide reappraisal of property is completed as provided in this section.
4. Any county which has begun but has not completed a countywide valuation review program in accordance with the requirements of § 26-26-305 [repealed] or otherwise on March 26, 1997, shall suspend the valuations determined through the valuation review program and use the valuations which were applicable prior to the valuation adjustments pending the completion of the countywide reappraisal.
5. Ad valorem taxes which are due and owing on March 26, 1997, shall continue to be due and owing and shall not be affected by the terms of this section.
1. When there is a countywide reappraisal of property for ad valorem tax purposes in any county, which reappraisal is conducted over a period of two (2) or more years, taxes shall not be assessed on the basis of the reappraised value of any property in the county until all taxable property in the county has been reappraised. When a countywide reappraisal of property is completed in any county and taxes are first assessed on the newly reappraised values, the provisions of Arkansas Constitution, Amendment 59, and § 26-26-401 et seq. relative to the adjustment or rollback of millage levied for ad valorem tax purposes shall be applicable.
2. Provided that newly discovered real property, new construction and improvements to real property, and personal property, shall be listed, appraised and assessed as otherwise provided by law until the countywide reappraisal of property is completed.
3. No county which is conducting a comprehensive countywide reappraisal of property for ad valorem tax purposes which is in progress on the third Monday in November in any year, or any municipality or school district therein, shall be subject to any penalties provided in § 26-26-304 for such fiscal year if the following requirements are met:
  1. The reappraisal meets the requirements of § 26-26-401; and
  2. The reappraisal is conducted in accordance with a plan which has been approved by the Assessment Coordination Division and provides that the reappraisal will be completed within twenty-four (24) months following the date of such approval.
1. 1. On or before March 31 of each year, the county collector of each county shall certify to the Chief Fiscal Officer of the State the amount of the real property tax reduction provided in § 26-26-1118.
  2. 1. After receipt of the certification from the county collectors, the Chief Fiscal Officer of the State shall determine the proportionate share of the total statewide reduction attributable to each county.
    2. 1. At the end of each month, the Chief Fiscal Officer of the State shall determine the balance in the Property Tax Relief Trust Fund and certify it to the Treasurer of State.
      2. The Treasurer of State shall make distributions from the Property Tax Relief Trust Fund to each county treasurer in accordance with the county's proportionate share of the total statewide property tax reduction for that calendar year resulting from the provisions of § 26-26-1118.
      3. Effective January 1, 2006, the Treasurer of State shall make a monthly distribution from the Property Tax Relief Trust Fund to each county treasurer.
        
        The distributions for January, February, and March shall be in accordance with the county's proportionate share of the total statewide property tax reduction as of the final county certification of the previous year.
        
        Beginning in April of each year, the distribution from the Property Tax Relief Trust Fund to each county treasurer shall be in accordance with the county's proportionate share of the total statewide property tax reduction for that calendar year under § 26-26-1118.
    3. 1. If the Chief Fiscal Officer of the State has not received all of the certifications from the county collectors, then the distribution of the Property Tax Relief Trust Fund shall be as follows until all certifications have been received:
        
        The total amount of the Property Tax Relief Trust Fund to be distributed shall equal the total amount in the Property Tax Relief Trust Fund multiplied by the proportion of the previous year's total property assessment, less tangible personal property and property owned by utilities and regulated carriers, of the counties that have certified, divided by the previous year's total property assessment, less tangible personal property and property owned by utilities and regulated carriers in the state; and
        
        Each county that has certified its property tax reduction shall receive an amount of the Property Tax Relief Trust Fund, as adjusted in subdivision (a)(2)(C)(i)(a) of this section, equal to the county's proportionate share of the total property tax reduction of the counties that have certified their property tax reductions.
      2. However, until all counties have certified their property tax reductions to the Chief Fiscal Officer of the State, no county shall receive more than seventy-five percent (75%) of its certified property tax reduction.
  3. 1. 1. Funds so received by the county treasurers shall be credited to the county property tax relief fund.
      2. Ninety-six percent (96%) of the funds shall be allocated and distributed to the various taxing entities within the county that levy ad valorem taxes.
      3. The allocation shall be based on a certification from the county collector of the amount of the real property tax reduction per taxing entity provided in § 26-26-1118.
      4. The four percent (4%) retained in the county property tax relief fund is the commission of the county collector as authorized under § 21-6-305(a)(4).
        
        This commission shall become a part of the total commission of the county collector.
      5. These funds are subject to § 21-6-305(d).
    2. Funds so received by the various taxing units shall be used for the same purposes and in the same proportions as otherwise provided by law.
2. 1. Distributions to each county shall continue on a monthly basis from the Property Tax Relief Trust Fund until the full amount certified by the county collectors, as of November 15 of each year, has been paid.
  2. 1. In no event shall the amount distributed to a county during a calendar year from the Property Tax Relief Trust Fund exceed the final amount certified by the county collector as of November 15 as the property tax reduction for that calendar year resulting from § 26-26-1118.
    2. If a county is paid in excess of its proportionate share, the Chief Fiscal Officer of the State may reduce payments made to the county for the subsequent calendar year until the overpayment is recovered.
    3. 1. On or before December 31 of each year, the Chief Fiscal Officer of the State, in cooperation with the Legislative Council and the Legislative Auditor, shall determine that portion of the balance remaining in the Property Tax Relief Trust Fund that is in excess of the required reimbursement to the counties and shall certify the excess to the Treasurer of State.
      2. Beginning December 31, 2005, and on December 31 of each subsequent year, the Treasurer of State shall:
        
        Calculate each county's proportionate share of one million dollars ($1,000,000) based on the proportions used to reimburse the county for property tax reductions under subsection (a) of this section;
        
        Transfer the amount calculated under subdivision (b)(2)(C)(ii)(a) of this section to the county treasurer for allocation to the county assessor for use by the county assessor for the costs of administering Arkansas Constitution, Amendment 79, including without limitation costs for personnel, equipment, services, and postage used in the administration of Arkansas Constitution, Amendment 79;
        
        Distribute two million dollars ($2,000,000) from the Property Tax Relief Trust Fund to the counties in the state using the formula stated in § 19-5-602(c)(1); and
        
        Distribute two million dollars ($2,000,000) from the Property Tax Relief Trust Fund to the municipalities in the state using the formula stated in § 19-5-601(c).
    4. 1. For calendar year 2019, by the last business day of each month following April 9, 2019, the Chief Fiscal Officer of the State shall certify to the Treasurer of State the total amount of moneys credited to the Property Tax Relief Trust Fund since April 9, 2019.
        
        For calendar years after 2019, by the last business day of each month, the Chief Fiscal Officer of the State shall certify to the Treasurer of State the total amount of moneys credited to the Property Tax Relief Trust Fund for the year.
      2. The Chief Fiscal Officer of the State shall determine annually the estimated amount needed to fund the distributions required under subdivision (b)(2)(C) of this section for the next year.
      3. When the amount certified by the Chief Fiscal Officer of the State under subdivision (b)(2)(D)(i) of this section exceeds the amount determined under subdivision (b)(2)(D)(ii) of this section for the year:
        
        By July 1, 2019, the Treasurer of State shall make a one-time transfer of eight million two hundred forty-six thousand five hundred seventy-three dollars ($8,246,573) to the County Voting System Grant Fund.
        
        The transfer required under subdivision (b)(2)(D)(iii)(a)(1) of this section shall occur as soon as practicable after July 1, 2019, if, by July 1, 2019, the amount certified by the Chief Fiscal Officer of the State under subdivision (b)(2)(D)(i) of this section does not exceed the amount determined under subdivision (b)(2)(D)(ii) of this section by the full amount required for the transfer under subdivision (b)(2)(D)(iii)(a)(1) of this section; and
        
        Except as provided in subdivision (b)(2)(D)(iii)(a) of this section, the revenues credited to the Property Tax Relief Trust Fund in excess of the amount determined under subdivision (b)(2)(D)(ii) of this section shall be transferred from the Property Tax Relief Trust Fund to the Long Term Reserve Fund.
  3. 1. The Legislative Auditor or his or her designee shall audit the books and records of the county assessor, county collector, or any other party as needed to ensure that the amount of the property tax reduction certified by the county collector is accurate.
    2. The Chief Fiscal Officer of the State may adjust the amount certified by the county collector if it is discovered that the certified amount is incorrect.
3. 1. On or before June 30 and November 15 of each year, the county collector of each county shall recertify to the Chief Fiscal Officer of the State the amount of the real property tax reduction provided in § 26-26-1118.
  2. The recertification shall reflect the most current total of tax reductions based on corrections and amendments to the records of the county assessor.
  3. After receipt of the recertification from the county collectors, the Chief Fiscal Officer of the State shall redetermine the proportionate share of the total statewide reduction attributable to each county.
1. For purposes of Arkansas Constitution, Amendment 79, and any laws of this state referencing countywide reappraisals of property for property taxation purposes, a countywide reappraisal of property shall be deemed to have been completed on the date that the county collector's books are open for collection on the newly appraised values.
2. This section does not prohibit any increases allowed by the Arkansas Constitution.
1. 1. Whenever a countywide reappraisal or reassessment of property subject to ad valorem taxes, made in accordance with procedures established in this subchapter and with rules of the Assessment Coordination Division, or its successor agency, adopted pursuant to the authority granted in this section shall result in an increase in the aggregate value of taxable real and personal property in any taxing unit in this state of ten percent (10%) or more over the previous year, the rate of city or town, county, school district, and community college district taxes levied against the taxable real and personal property of each taxing unit shall, upon completion of the reappraisal or reassessment, be adjusted or rolled back by the governing body of the taxing unit for the year for which levied as provided.
  2. The adjustment or rollback of tax rates or millage for the base year as defined in subdivision (a)(5) of this section shall be designed to assure that each taxing unit will receive an amount of tax revenue from each tax source no greater than ten percent (10%) above the revenues received during the previous year from each tax source, adjusted for any lawful tax or millage rate increase or reduction imposed in the manner provided by law for the year for which the tax adjustment or rollback is to be made, and after making the following additional adjustments:
    1. By excluding from calculation the assessed value of, and taxes derived from, tangible personal property assessed in the taxing unit and all real and tangible personal property of public utilities and regulated carriers assessed in the taxing unit; and
    2. 1. By computing the adjusted or rollback millage rates on the basis of the reassessed taxable real property for the base year that will produce an amount of revenue no greater than ten percent (10%) above the revenues produced from the assessed value of real property in the taxing unit after making the aforementioned adjustments for personal properties and properties of public utilities and regulated carriers as provided in subdivision (a)(2)(A) of this section from millage rates in effect in the taxing unit during the base year in which the millage adjustment or rollback is to be calculated;
      2. In calculating the amount of adjusted or rollback millage necessary to produce tax revenues no greater than ten percent (10%) above the revenues received during the previous year, the governing body shall separate from the assessed value of taxable real property of the taxing unit, newly discovered real property and new construction and improvements to real property, after making the adjustments for personal property or property of public utilities and regulated carriers as provided in subdivision (a)(2)(A) of this section, and shall compute the millage necessary to produce an amount of revenues equal to, but no greater than, the base year revenues of the taxing unit from each millage source. Such taxing unit may elect either to obtain an increase in revenues equal to the amount of revenues that the computed or adjusted rollback millage will produce from newly discovered real property, new construction, and improvements to real property, or, if the same is less than ten percent (10%), the governing body of the taxing unit may recompute the millage rate to be charged to produce an amount no greater than ten percent (10%) above the revenues collected for taxable real property during the base year.
  3. The amount of revenues to be derived from taxable personal property assessed in the taxing unit for the base year, other than personal property taxes to be paid by public utilities and regulated carriers in the manner provided, shall be computed at the millage necessary to produce the same dollar amount of revenues derived during the current year in which the base year adjustment or rollback of millage is computed, and the millage necessary to produce the amount of revenues received from personal property taxes received by the taxing unit, for the base year shall be reduced annually as the assessed value of taxable personal property increases until the amount of revenues from personal property taxes, computed on the basis of the current year millage rates, will produce an amount of revenues from taxable personal property equal to or greater than that received during the base year, and thereafter the millage rates for computing personal property taxes shall be the millage rates levied for the current year.
  4. The taxes to be paid by public utilities and regulated carriers in the respective taxing units of the several counties of this state during the first five (5) calendar years in which taxes are levied on the taxable real and personal property as reassessed and equalized in each of the respective counties as a part of a statewide reappraisal program shall be the greater of the following:
    1. The amount of taxes paid on property owned by such public utilities or regulated carriers in or assigned to the taxing unit, less adjustments for properties disposed of or reductions in the assessed valuation of such properties in the base year as defined below; or
    2. The amount of taxes due on the assessed valuation of taxable real and tangible personal property belonging to the public utilities or regulated carriers located in or assigned to the taxing unit in each county at millage rates levied for the current year.
  5. 1. As used in this section, “base year” means the year in which a county completes reassessment and equalization of taxable real and personal property as a part of a statewide reappraisal program and extends the adjusted or rolled back millage rates for the first time, as provided in subdivision (a)(1) of this section, for the respective taxing units in that county for collection in the following year.
    2. In the event the amount of taxes paid the taxing unit in a county in the base year, as defined in this subdivision (a)(5), is greater than the taxes due to be paid to such taxing unit for the current year of any year of the second period of five (5) years after the base year, the difference between the base-year taxes and the current year taxes for any year of the five-year period shall be adjusted as follows:
    3. If the current-year taxes of a public utility or regulated carrier equal or exceed the base-year taxes due a taxing unit during any year of the first ten (10) years after the base year, the amount of taxes to be paid to the taxing unit shall thereafter be the current-year taxes, and the adjustment authorized in this section shall no longer apply in computing taxes to be paid to such taxing unit.
  6. In the event the requirement for payment of taxes by public utilities and regulated carriers, or any class of utilities or carriers for the ten-year period as provided in subdivision (a)(5)(C) of this section shall be held by court decision to be contrary to the constitution or statutes of this state or of the United States Government, all utilities and all classes of carriers shall receive the same treatment provided or required under the court order for a particular type of carrier or utility if deemed necessary to promote equity between similar utilities or classes of carriers.
2. If it is determined that the adjustment or rollback of millages as provided for in this section will render income from millages pledged to secure any bonded indebtedness insufficient to meet the current requirements of all principal, interest, paying agents' fees, reserves, and other requirements of a bond indenture, any pledged millage shall be rolled back or adjusted only to a level which will produce at least a level of income sufficient to meet the current requirements of all principal, interest, paying agents' fees, reserves, and other requirements of the bond indenture.
3. Pursuant to the application of Arkansas Constitution, Amendment 74, to the rollback provisions of Arkansas Constitution, Amendment 59, for millage rates levied by the various school districts within the county, if it is determined that the adjustment or rollback of millages as provided in Arkansas Constitution, Amendment 59, will result in a tax rate available for maintenance and operation of less than the uniform rate of tax, then the millage shall be rolled back only to the uniform rate of tax plus debt service millage required, and no further.
1. In the base year of an approved countywide reassessment program, the county clerk shall certify the assessed value by taxing unit after the county equalization board hearings and county court hearings, on the first Monday in November.
2. On or before the second Monday in November of the base year, the county clerk shall report to the governing body of each taxing unit the following completed form, accurately listing the required data on each line:
1. 1. The governing body of each taxing unit in the base year of countywide reassessment shall complete the following form and return the form to the county clerk on or before the third Monday in November of the base year, using certified data provided by the county clerk as described in § 26-26-402.
  2. The form shall be signed by the officers of the governing body of each taxing unit.
2. 1. If newly discovered and new construction properties are less than a ten percent (10%) increase in assessments, the governing body of each taxing unit may elect to increase the rolled back millage an amount to allow no more than an overall ten percent (10%) increase in taxes.
  2. If the newly discovered and new construction property list is ten percent (10%) or more above reassessment total, the total amount is allowed; however, no increase in the rolled back millage shall be considered.
3. Each tax source or millage levy shall be computed and rounded up to the nearest one-tenth (1/10) mill.
4. The county clerk shall file and record the completed forms required in § 26-26-403 and this section and shall forward a copy of the forms to the Assessment Coordination Division by December 1 of the base year.
1. Revenues derived from personal property by each taxing unit in the county are to be frozen at the base-year levels. The millage applied to personal property only is then adjusted downwards in the same proportion that the assessment base increases. The current millage is defined as the millage that was used in each taxing unit to derive the base-year revenues for personal property. This procedure shall be followed each year until the personal property millage rate is equal to or lesser than the millage rate applied to real estate, at which time the interim adjustment is complete, and both personal property and real estate shall thereafter be taxed at the same millage rate.
2. In calculating the interim millage, all millage will be rounded up only to the nearest one-tenth (1/10) mill or to four (4) places to the right of the decimal.
3. The adjustment shall be performed by the county clerk at the conclusion of all due process proceedings, or by the second Monday in November, whichever is earlier. The county clerk shall then certify the interim personal property millage rate by taxing unit to the county quorum court by the third Monday in November for certification of all millage rates.
4. The county clerk shall file and record the completed form required by this section. The county clerk shall forward a copy of the form to the Assessment Coordination Division by December 1 of each year where an interim millage is used, or the year of final adjustment.
1. Residential property used solely as the principal place of residence of the owner shall be assessed in accordance with its value as a residence, so long as the property is used as the principal place of residence of the owner and shall not be assessed in accordance with some other method of valuation until the property ceases to be used for the residential purpose.
2. 1. 1. Agricultural land, pasture land, and timberland valuation shall be based on the productivity of the agricultural land, pasture land, or timberland soil.
    2. Agricultural land, pasture land, and timberland guidelines shall be developed based on the typical or most probable use of the soils for agricultural land, pasture land, and timberland in the region.
  2. Land that is enrolled in the Wetlands Reserve Program of the Natural Resources Conservation Service of the United States Department of Agriculture or in the Conservation Reserve Program of the Natural Resources Conservation Service of the United States Department of Agriculture shall be treated as agricultural land, pasture land, or timberland for purposes of valuation.
3. 1. Commercial land and residential land that are vacant shall be valued on their typical use.
  2. The county assessor shall determine what the typical use of vacant commercial land or residential land is by considering the primary current use of adjacent lands.
4. 1. For real property in which the mineral estate and surface estate are severed, if a surface estate owner's use and enjoyment of the surface estate are adversely affected by a severed mineral estate owner's use and enjoyment of the severed mineral estate, or a surface estate owner's utility of the surface estate interest is adversely affected by a severed mineral estate owner's use and enjoyment of the severed mineral estate, the assessment of the surface estate is as follows:
    1. For agricultural land, pasture land, or timberland, a well drilled for the purpose of extracting minerals from a severed mineral estate creates a presumption of diminished utility of the surface estate, and the assessed value of the affected surface estate shall reflect the minimum productivity value of the surface estate and shall be reduced accordingly; and
    2. For residential property and commercial property, a well drilled for the purpose of extracting minerals from a severed mineral estate creates a presumption of diminished utility of the surface estate, and the assessed value of the affected surface estate shall reflect the diminished utility of the surface estate and reduced accordingly.
  2. Unless market evidence indicates an increase in land area value or an increase in value of the surface estate, the portion of the surface estate for which a presumption of diminished utility exists under subdivision (d)(1) of this section shall not exceed one (1) acre per well, and the value of the surface estate for that one (1) acre shall be assessed in an amount not to exceed twenty-five percent (25%) less than surrounding comparable property.
5. 1. The county equalization board may reclassify land upon proof of change in use of the land or upon proof that the land is not eligible for classification under the provisions of this section.
  2. The owner may appeal the decisions of the county assessor and county equalization board as provided by law for other appeals from the county assessor or county equalization board.
6. 1. In devising and developing methods of assessing and levying the ad valorem property tax on real property, the Assessment Coordination Division shall annually develop and publish valuation tables and other data that shall be used by county assessors for assessing lands qualifying under this subchapter.
  2. 1. Each year the division shall update the valuation tables for assessing lands qualifying as agricultural land, pasture land, and timber land in time for counties to use the updated tables when they finish their countywide appraisals.
    2. When there is a countywide reappraisal, a county shall assess agricultural land, pasture land, and timberland based upon the updated land values in the valuation tables issued for the assessment year.
  3. 1. The division by rule shall develop appropriate formulas reflecting the productivity valuation of the land based upon income capability attributable to agricultural land, pasture land, and timberland soils.
    2. Each year the division shall develop and calculate capitalization rates by using appropriate long-term federal security rates, risk rates, management rates, and other appropriate financial rates.
    3. However, the capitalization rate developed under subdivision (f)(3)(B) of this section shall not be less than eight percent (8%) nor more than twelve percent (12%).
  4. By October 15 of each year, the division shall report to the Legislative Council any changes to any part of the formula used to determine the value of land or the capitalization rate.
7. 1. Whenever land that has qualified for valuation on use or productivity under subsection (b) of this section is converted to another use, the person converting the land to another use shall notify, immediately and in writing, the county assessor of the change in use.
  2. At the appropriate time, the county assessor shall extend the taxes on the land based on the change in use and shall certify to the county collector the amount to be collected.
8. 1. If any person fails to give written notice of a change in use of land as required in subsection (g) of this section, the person shall be subject to a penalty in an amount equal to three (3) years of taxes on the land at the value in the new use or conversion use.
  2. Any penalty so assessed shall be included in the taxes on the land for the year in which the failure is discovered and shall be a lien on the land to the same extent as any other taxes levied on the land.
9. Any funds derived from penalties assessed pursuant to subsection (h) of this section shall be deposited into the county general fund to be used for the purposes prescribed by law.
1. As used in this section, “fringe school districts” means those school districts whose boundaries extend across one (1) or more county lines.
2. When there is a statewide or countywide reappraisal of property for ad valorem tax purposes pursuant to court order or pursuant to law enacted by the General Assembly, the millage rollback for fringe school districts will be implemented as follows: That part of the school district in a county reappraised first will be rolled back in accordance with procedures prescribed in this subchapter, and taxes will be levied at that millage rate until such time as a similar reappraisal is completed in the other counties in which the school district lies and the millage in those counties is rolled back in accordance with this subchapter at which time the rolled back millage for the first part of the school district that has been reappraised and the rolled back millage for each succeeding part of the school district that has been reappraised shall be averaged, weighted by the percentage of the total assessment of the school district that each part consists of in order to create a weighted average millage, and thereafter the weighted average millage for the school district will be the millage rate levied in the whole school district.
1. The county assessor in each county may employ such personnel as the county assessor deems necessary to reappraise taxable property in the county in compliance with the court order in Arkansas Public Service Commission, et al. v. Pulaski County Board of Equalization, et al. and to thereafter maintain a proper appraisal of property in the county.
2. 1. 1. The Assessment Coordination Division shall prescribe an appropriate course of training to qualify persons employed by elected county assessors to conduct appraisals of property for ad valorem tax purposes and shall issue a certificate of qualification to each person who successfully completes the course of training or is otherwise determined by the division to be qualified to conduct appraisals.
    2. 1. Only those persons who hold certificates of qualification issued by the division as provided for in this section shall be employed by the elected county assessors for or undertake the appraisal of property for ad valorem tax purposes in any county.
      2. This section only applies to persons employed by elected county assessors, and the elected county assessors are not themselves required to be certified by the division.
  2. The division shall seek the advice of the Legislative Council prior to the final adoption of training criteria for persons to be employed by county assessors to appraise property for ad valorem tax purposes.
1. 1. The Arkansas Public Service Commission shall prepare and furnish, at the proper time, to the county clerks in this state copies for all lists, blanks, and records to be used in the assessment, extension, and collection of taxes, and the county clerk shall have all lists, blanks, and records made at the expense of the county.
  2. This subsection shall not apply to poll tax receipts.
  3. No lists, blanks, or records shall be used by any official in the assessment, extension, or collection of taxes except as shall have had the approval of the commission.
2. On or before January 1 of each year, the county clerk shall furnish to the county assessor all lists, blanks, and records necessary for the assessment of all real and personal property for the year, all of them to be prepared as provided by law unless otherwise directed by the commission.
1. On or before January 1 of each year, the county clerk of each county shall make out and deliver to the county assessor, in books prepared for that purpose, an abstract containing a description of each tract or lot of land situated within the boundaries of any city or town and additions thereto which have been regularly platted into lots and blocks. In the case of real estate situated within the boundaries of any city or town and additions thereto which have been regularly platted into lots and blocks, the county clerk shall proceed according to the plan or plat thereof, commencing with the lowest number of the block and lot of each city, town, or addition and proceed numerically with all lots in a block and all blocks in a city, town, or addition until completed.
2. On or before January 1 of each year, the county clerk shall make out and deliver to the county assessor, in books prepared for that purpose, an abstract containing a description of each tract of land situated outside the boundaries of any city or town and additions thereto which have been regularly platted into lots and blocks. In case of acreage land, he or she shall commence the abstract in the lowest number in township and range in his or her county, and in the northeast corner of each township, and shall proceed numerically with all sections, townships, and ranges in his or her county first setting down all the subdivisions of each section as they belong to different individuals or the whole section together if owned by one (1) person and not divided on account of parcels being of different value.
3. The abstract in each case shall show the name of the owner, if known, and the number of acres or quantity of land contained in each call.
4. No failure to observe any of these requirements shall be held to vitiate any assessment if the lands are so described as to be identified.
1. To facilitate the assessment and collection of taxes, the county court of each county shall procure and keep a land book or books of maps of all the townships or fractional townships in the county. The book shall be well-bound and shall be deposited in the office of the county clerk.
2. The court shall also procure a list of the lands owned by the United States and by this state in their respective counties.
1. The school directors of each and every school district in the state shall furnish to the county assessor a complete list, showing addresses alphabetically arranged, of all persons who under the law should be taxpayers in the school district.
2. The various school boards are authorized to pay out of the school funds of the district the expense incurred in the preparation of the list.
1. The Secretary of the Department of Finance and Administration shall institute a system in which the county assessor and the county collector shall notify the secretary that a vehicle owner has assessed a vehicle and has paid all personal property taxes that were due by the preceding October 15. Upon receipt of the notification, the secretary shall renew the vehicle license.
2. Notification by the county assessor and the county collector under subsection (a) of this section shall be in the form of an electronic notation placed on or removed from the Department of Finance and Administration's vehicle license record by the county assessor and the county collector denoting that the vehicle has been assessed and that the vehicle owner does not owe delinquent personal property taxes.
1. The county recorder of deeds and mortgages in each county shall, each year, prepare and file with the county assessor a list, alphabetically arranged in the name of the grantor, or a copy of the following which were recorded during the year, to wit:
  1. All deeds, mortgages, and contracts for the sale of realty;
  2. All timber deeds or contracts, or mineral or royalty deeds; and
  3. All leases or contracts of every kind, whether oil and gas or other things leased.
2. If a list is furnished, it shall reflect the last known business address of the person owning the rights under the contract, deed, or lease, the date, and the consideration.
1. When an instrument for the conveyance of real estate, save mortgages and deeds of trust, is tendered to the county recorder for recording, that official shall obtain from the person tendering the instrument the name of the grantee and the address to which the grantee wants future tax statements mailed.
2. At least weekly the county recorder shall transmit the duplicate statements to the county assessor, who shall keep the original and immediately transmit the copy to the county clerk, together with his or her instructions as to any change in legal description or separation of parcel as they then appear on the tax books.
3. In counties operating under the unit tax ledger system, the county assessor shall immediately transmit the copy to the county collector, together with his or her instructions as to any change in legal description or separation of parcel as they then appear on the tax books.
4. Both the county assessor and the county clerk shall make proper entry of the information so received into their permanent records.
5. Where a plat is offered for record to the county recorder, the person so offering the plat shall tender to the circuit clerk the original for recording and one (1) copy of the plat, which shall be certified to by the circuit clerk, showing the book and page of the records wherein the original is recorded. The certified copy shall be transmitted by the circuit clerk to the county assessor within five (5) days from the date of recording.
1. Any person, partnership, company, or corporation having any person in their employ shall be required to give the name of the employee to the county assessors, county sheriffs, or county collectors of the various counties when demanded by the county assessors, county sheriffs, or county collectors in their official capacity.
2. Any person, partnership, company, or corporation, their agents, attorneys, or managers that violate this section shall be guilty of a violation and shall be fined in any sum not less than ten dollars ($10.00) nor more than one hundred dollars ($100).
1. All lists required in §§ 26-26-705, 26-26-707, and 26-26-708 by clerks, school directors, and others shall be filed with the county assessors of the various counties on the first Monday in January of each year.
2. The lists shall be filed in triplicate:
  1. One (1) to be forwarded by the county assessor to the Arkansas Public Service Commission;
  2. One (1) to be filed with the county clerk; and
  3. One (1) to be retained by the county assessor.
3. 1. The list retained by the county assessor shall be checked by him or her and used in his or her endeavor to place all taxable property on the books.
  2. When the county assessor's books are closed, the county assessor shall certify all of the lists to the county court, and the certificate shall show whether the individuals have made an assessment and if not, why not, and what effort the county assessor has put forth in each case to secure an assessment by each individual on the lists.
4. 1. Upon conviction, any individual, school director, tax commissioner, county assessor, or other person charged with a duty under this section who fails to perform the duty is guilty of a violation and shall be fined in any sum not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000).
  2. Upon conviction for a second offense, in the case of any public official, the public official shall be removed from office.
5. The commission shall prepare such forms as will ensure the effective execution of this section.
1. The original assessment lists as made out, sworn to, and delivered to the county assessor by any person or property owner of the county and assessment lists made by the county assessor prior to the date on which the assessment rolls are delivered to the county clerk, together with copies of all assessment lists as made out, sworn to, and delivered to the county clerk by the county assessor or any other person after the assessment rolls have been delivered to the county clerk and before the county collector closes his or her books, shall remain in the office of the county assessor for at least four (4) years after the date upon which they were made, during which time the lists shall be filed by the county assessor in such manner that they may be readily referred to and utilized.
2. Copies of all assessment lists as made by the county assessor or any other person subsequent to the date on which penalty attached for failure to assess and before the assessment record is required to be filed with the county clerk shall be delivered to the county clerk at the same time the assessment record is filed, which lists, together with the original of all assessment lists as may be filed with the county clerk by the county assessor or any other person after the assessment record has been delivered to the county clerk and before the county collector closes his or her books, shall be preserved by the county clerk for the purpose of checking the tax books to determine if all penalties for failure to assess at the proper time have been properly designated and extended.
1. 1. 1. Each year, the county assessor shall, on or before the third Monday in August, file with the county clerk his or her report of assessment of all real property of the county situated within the boundaries of any city or town and additions thereto which have been regularly platted into lots and blocks.
    2. Each year, the county assessor shall, on or before the third Monday in August, file with the county clerk his or her report of assessment of all real property of the county situated outside the boundaries of any city or town and additions thereto which have been regularly platted into lots and blocks.
  2. On or before July 31, the county assessor shall deliver the personal property assessment report or roll book to the county clerk, to be arranged in alphabetical order according to school districts and showing separately in alphabetical order the persons residing outside of incorporated cities and towns and of persons who are residents of incorporated cities and towns of the same school district.
  3. In addition to the other requirements of this section, the county assessors shall be required to list poll and personal property owners to the respective political township and ward in which they reside at the time of the assessment.
2. 1. These reports shall be filed in books or records of the kind and character furnished to the county assessor by the county clerk for that purpose, unless otherwise directed by the Arkansas Public Service Commission, and each report shall show each item of property by totals in number and value.
  2. The county clerk shall not receive these reports unless they are in a neat and legible manner, and to each of which the county assessor shall have attached his or her oath in the following words:
1. 1. 1. It shall be the duty of each county assessor to make out, from such sources of information as shall be in his or her power, a correct and pertinent description of each tract or lot of real property in his or her county, so that it can be identified and distinguished from any other tracts or parts of tracts.
    2. The county assessor shall place a value on each subdivision of a block, and the improvements thereon, in cities and towns, or additions thereto, notwithstanding the fact that one (1) individual owns the whole block.
  2. 1. When the county assessor shall deem it necessary to obtain an accurate description of any separate tract or lot in his or her county, he or she may require the owner or occupier to furnish it with any title papers he or she may have in his or her possession.
    2. 1. If the owner or occupier, upon demand made for it, shall neglect or refuse to furnish a satisfactory description of the parcel of real property to the county assessor, he or she may employ the county surveyor to make out a description of the boundaries, and location thereof, and a statement of the quantity of land therein.
      2. The expense of the survey shall be returned by the county assessor to the county clerk, who shall add the expense of the survey to the tax assessed upon the real property, and it shall be collected by the county collector of the county with the tax. When collected, it shall be paid on demand to the person to whom it is due.
2. 1. The county assessor shall, in all cases, from actual view or from the best sources of information within his or her reach, determine, as near as practicable, the true value of each separate tract and lot of real property in his or her county, according to the rules prescribed by this chapter for valuing property.
  2. The county assessor shall note in his or her plat book, separately, the value of all houses, mills, and other buildings which shall be carried out as a part of the value of the tracts.
1. 1. It is the duty of a county assessor to strictly follow the provisions of § 26-26-717.
  2. When it is otherwise impossible to correctly describe real property on the assessment roll according to its ownership, it is the duty of a county assessor to petition the county court for a survey of the real property under the provisions of § 26-26-802.
2. 1. In any case where a tract of land is irregularly described, the county assessor must require the owner to bring in his or her deed.
  2. The tract of land must then be taken from the deed, and the tract of land to be assessed must be platted on a plat book furnished the county assessor by the county court of each township in the county.
  3. The county assessor shall draw a plat of the tract of land and shall number it as “Lot No. ” and then enter the tract of land on the assessment book as “Lot No. of ” describing the section or portion of the section in which the tract of land is found.
3. It shall be sufficient to advertise the tract of land for failure to pay taxes by the number of the lot assigned to the tract of land.
4. 1. If for any reason a part description of the real property assessed is made by the county assessor, the reason must be stated, and the county assessor shall immediately certify his or her inability to properly describe the real property to the Commissioner of State Lands on or before October 1 in each year.
  2. 1. The Commissioner of State Lands shall assemble the certificates of part description received from the county assessors and certify them to the Attorney General, who shall file his or her petition in the circuit court having jurisdiction.
    2. The circuit court is vested with jurisdiction upon the petition to issue any form or writ necessary for ascertaining the correct ownership description of the real property involved.
5. Upon petition of the Attorney General addressed to the circuit court having jurisdiction, any county assessor who shall fail or refuse to comply with the provisions of § 26-26-718 and this section shall be removed from office and shall only be reinstated when he or she has performed the duties enjoined but shall receive no compensation for correcting any of his or her acts of omission or commission.
1. 1. It shall be the duty of the county assessor of each county of the State of Arkansas, after extending the valuation against each parcel of land, lot, and part of lot on his or her assessment record to check it, and for all land, lots, and parts of lots that have been certified to the Commissioner of State Lands for the nonpayment of the delinquent taxes due, he or she shall stamp or write by the valuation “State of Arkansas”, and also the year which it was certified to the state.
  2. The county assessor shall take the list of the land, lots, and parts of lots that have been redeemed or purchased which is certified to the county clerks by the Commissioner of State Lands January of each year and show on his or her assessment record the disposition of the land, lots, and parts of lots.
2. If the county assessor of the various counties of the State of Arkansas needs a starting point, he or she can write the Commissioner of State Lands for a list of the forfeited land, lots, and parts of lots in his or her county. Upon such request, the Commissioner of State Lands shall furnish him or her with a correct list of the forfeited land, lots, and parts of lots that have not been redeemed or sold in his or her office. The county clerks of the various counties of the State of Arkansas shall furnish the county assessor a list of the forfeited land, lots, and parts of lots that he or she sends to the Commissioner of State Lands yearly. In this way, the county assessor will have a complete record of the forfeited land, lots, and parts of lots for his or her assessment record.
1. It is made the duty of the county clerks to promptly notify the county surveyors of their respective counties of all orders made by their respective county courts in pursuance of this subchapter.
2. It is the duty of the county recorder of every county to provide and keep in his or her office a record book to be entitled “Record of Surveyor's Plats and Notes”, in which he or she shall accurately record or make a fair copy and transcript of every plat and the notes accompanying it returned to him or her by the county surveyor, as provided in this subchapter.
1. Whenever it shall be made to appear to the satisfaction of the county court of any county that any section, or part of section of land in the county is in such small or irregular subdivisions as respects ownerships thereof, that the subdivisions or any of them cannot be accurately or conveniently designated in the assessment list or tax list in the usual or ordinary manner of designating subdivisions of land, it shall be the duty of the county court to order the county surveyor of the county to make and return to the county recorder of the county a plat, with accompanying marginal notes or footnotes, of the section or part section, whereupon it shall be the duty of the county surveyor to promptly comply with and obey such orders.
2. In the plats and by the marginal or footnotes which he or she shall make and return, he or she shall show the relative size and position of the several subdivisions and the area of each, which subdivisions shall be designated as “lots” and shall be numbered consecutively in like manner and order, insofar as practicable, as is done in the case of fractional sections in the surveys and plats made under the direction of the United States Bureau of Land Management.
1. The county assessors, deputy county assessors, and Arkansas Public Service Commission, or any other officer charged under the law with assessing taxes, shall, when each and every person presents himself or herself to make and prepare a property list, administer the following oath:
2. Provided, however, this oath shall not be required of any individual assessing his or her real or personal property by telephone under § 26-26-1114 or where the county assessor lists the property for the property owner as permitted in § 26-26-903.
1. Every person of full age and sound mind shall list the real property of which he or she is the owner, situated in the county in which he or she resides, and the personal property of which he or she is the owner.
2. The county assessor may relieve the person of this requirement by listing the current year's assessment of real property from a previous property list or from a changed list based on a reassessment of the value of the real property of the owner.
1. Property held under a lease for a term exceeding ten (10) years belonging to a religious, scientific, or benevolent society or institution, whether incorporated or unincorporated, and school, seminary, saline, or other lands shall be considered, for all purposes of taxation, as the property of the person holding them and shall be listed as such by the person or his or her agent, as in other cases.
2. 1. For purposes of assessing and collecting ad valorem tax, property owned by the state shall be considered the property of the lessee if the property is held under a lease for:
    1. An ongoing commercial or residential purpose; and
    2. A term of actual use or occupation that exceeds ninety (90) days.
  2. Except as provided in this subsection, a lessee of property owned by the state as described under subdivision (b)(1) of this section shall pay ad valorem tax on the property held under the lease for any tax year during which the lease for the property is in effect as of January 1 of that tax year.
  3. 1. Within thirty (30) days of executing a lease described in subdivision (b)(1) of this section, the state shall provide written notification of the lease to the county assessor for the county in which the lease property is located.
    2. The written notification required under subdivision (b)(3)(A) of this section shall state the:
      1. Name and address of the lessee;
      2. Term of the lease; and
      3. Description of the leased property.
  4. This subsection does not apply to property owned and leased by the state and used:
    1. For the purpose of housing any one (1) or more of the following:
      1. Students or faculty, or both, of a state institution of higher education;
      2. Officials or employees, or both, of a state entity; or
      3. Official guests of a state entity;
    2. By a private person or entity for the purpose of providing a service to or on behalf of a state entity;
    3. For academic, research, or athletic facilities or purposes;
    4. For business and technology incubators or similar facilities;
    5. For manufacturing or industrial facilities or purposes, including without limitation industrial facilities as described in § 14-164-701; or
    6. By a state entity or nonprofit entity, including without limitation an organization that is otherwise exempt from taxation.
1. If any person shall have converted moneys, credits, or other personal property in the year preceding January 1 of the year in which he or she is required to assess his or her property into bonds or other securities of the United States or this state not taxed, and shall hold or control the bonds or securities when he or she is required to list his or her property, he or she shall list the monthly average value of the moneys, credits, or other property held or controlled by him or her.
2. Any indebtedness of the persons represented by him or her, created by investment in the bonds or other securities, shall not be deducted from the amount of credits in making up his or her list for taxation.
1. No person shall be required to list a greater portion of any credits than he or she believes will be acquired or can be collected, nor any greater portion of any obligation given to secure the payment of rent than the amount of rent that shall have accrued on the lease and shall remain due and unpaid at the time of listing.
2. No person shall be required to include in his or her statement, as a part of the personal property, moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise, which he or she is required to list, any share or portion of the capital stock or property of any company or corporation which is required to list or return its capital and property for taxation in this state.
1. 1. The valuations as set out in any assessment list required under the provisions of this subchapter to be delivered to the county assessor by the property owner shall not be held to be conclusive as to the value of the property so listed, and the county assessor may make such assessment of the property as he or she may deem just and equitable.
  2. 1. The county assessor, in each instance where he or she raises the valuation of any property which has been listed with him or her as by law required, shall deliver to the property owner or his or her agent a duplicate copy of the adjusted assessment list, or he or she shall notify the property owner or his or her agent by first class mail, which notice shall state separately the total valuation of real and personal property as listed by the property owner and as fixed by the county assessor, and shall advise that the owner may, by petition or letter, apply to the county equalization board for the adjustment of the assessment as fixed by the county assessor.
    2. All applications shall be made to the county equalization board on or before the third Monday in August.
2. 1. For the purpose of enabling the county assessor to determine just and equitable values of property, he or she is authorized, and it shall be his or her duty, to enter upon and make such personal inspection thereof as he or she shall deem necessary.
  2. Any person shall, when called upon by the county assessor, be required to answer upon oath and furnish proof demanded as to purchases, sales, transfers, improvements, accounts, notes, stocks, bonds, bank notes, bank deposits, invoices, insurance carried, or any and all other information requested and pertaining to the location, amount, kind, and value of his or her own property or that of another person.
1. The Arkansas Public Service Commission, the county assessor, or any one of them who may be required under the law to make assessment rolls shall, in addition to their duties as required by law, specifically inquire of the maker of each list the following:
  1. The number, kind, and value of each automobile he or she owns;
  2. The cash or funds on hand, and money on time deposit or otherwise in any depository, in or out of the state;
  3. The taxable securities of every kind and their value, in or out of the state, he or she may own;
  4. What stock, bonds, or mortgages owned and their value, in or out of the state;
  5. What leases or mineral deeds are owned and the value of them that are contemplated in §§ 26-26-1109 and 26-26-1110;
  6. What timber, deeds, or contracts contemplated by § 26-3-205 he or she owns and the value of them; and
  7. Any other property of any kind whatsoever that has a value about which questions have not been asked.
2. The taxpayer shall then be required to assess the properties disclosed by investigation.
1. If any person required to list property for taxation is prevented by sickness or absence from giving to the county assessor the list of property as prescribed by this subchapter, the person, or his or her agent having charge of the property, may, at any time before the making out of the tax books by the county clerk, make out and deliver to the county assessor of the county a statement of the same as required by this subchapter. The county assessor shall in such case make an entry in the returns of the proper city, town, ward, or school district and correct the items in the return made by him or her, as the case may require.
2. No such statement shall be received by the county assessor from any person who has refused or neglected to make oath to his or her statement when required by the county assessor under the provisions of this subchapter, nor from any person unless he or she has first made and filed with the county clerk an affidavit that the person required to list the same was absent from his or her county without design to avoid listing his or her property or was prevented by sickness from giving to the county assessor the required statement when called upon for that purpose.
1. Whenever the county assessor of any county has, during any year at the time of making the assessment of real property subject to taxation, failed to enter in a separate list pertinent descriptions of all burying grounds, public school houses, houses used exclusively for public worship, institutions of purely public charity, public buildings, and property used exclusively for any public purpose, libraries, and grounds used exclusively for school purposes, and property which by the Arkansas Constitution is exempted from taxation, the lots or tracts of land on which the institution or public building is situated, and which by law are exempted from taxation, and the value thereof, the county assessor of the county, or his or her successor in office, is authorized and empowered, at any time and during any year thereafter, upon discovery of the omission to make out separate lists, giving their description and the value of all the described property which has been omitted from the list.
2. 1. The list of the property, together with the valuation thereof, shall be filed with the county clerk of the county and by him or her entered upon the proper assessment book of the county.
  2. When the list of the omitted property has been filed by the county assessor, or his or her successor in office, with the county clerk in the county where the property is situated, it shall have the same force and validity as if entered, made, and filed at the proper time as prescribed by law.
1. All real estate and tangible personal property shall be assessed for taxation in the taxing district in which the property is located and kept for use.
2. 1. 1. Tangible personal property in transit for a destination within this state shall be assessed only in the taxing district of its destination.
    2. Tangible personal property in transit through this state, including raw materials from within or outside this state used in the manufacturing process and tangible personal property manufactured, processed, or refined in this state and stored for shipment outside the state, shall, for purposes of ad valorem taxation, acquire no situs in this state and shall not be assessed for taxation in this state.
    3. The owner of tangible personal property in transit through this state and of tangible personal property in transit for a destination within this state may be required, by the appropriate county assessor, to submit documentary proof of the in-transit character and the destination of the property.
  2. As used in this section, “tangible personal property in transit through this state” means tangible personal property:
    1. Which is moving in interstate commerce through or over the territory of this state;
    2. Which is consigned to or stored in or on a warehouse, dock, or wharf, public or private, within this state for storage in transit to a destination outside this state, whether the destination is specified when transportation begins or afterward, except where the consignment or storage is for purposes other than those incidental to transportation of the property; or
    3. Which is manufactured, processed, or refined within this state and which is in transit and consigned to, or stored in or on, a warehouse, dock, or wharf, public or private, within this state for shipment to a destination outside this state.
1. The county assessor shall, on or before August 1 of each year, deliver to the clerk of the county equalization board his or her completed assessment tax record, showing the total assessment of the county as made by the county assessor. He or she shall also furnish such other information as the county equalization board may request of the county assessor.
2. The county assessor shall, on or before the third Monday in August of each year, report to the Arkansas Public Service Commission, by total of items and value, the total assessment of the county as made by the county assessor and the commission and in the manner as directed by the commission, as to kind, character, number, and value of all tangible property assessed for taxation in the county and such other information as the commission may demand of the county assessor.
1. A purchaser of a manufactured home or mobile home shall report the purchase of each new or used manufactured home or mobile home to the county assessor of the appropriate county where the manufactured home or mobile home will be located.
2. The report shall include:
  1. The name of the purchaser;
  2. The purchaser's address;
  3. The date on which the purchase was made; and
  4. Other information as may be deemed necessary by the county assessor.
1. All lands that shall have been purchased from owners, the property of whom or which was by law exempt, all new improvements over the actual value of one hundred dollars ($100), and all town or city lots as may have been platted, as the case may be, subsequent to January 1 of any year shall be subject to assessment and taxation for the year immediately following the purchase, improvement, or platting.
2. 1. 1. In each year, all real estate or improvements on real estate which have been damaged by fire, flood, tornado, or other act of God, if the property is then on the assessment record at a value determined prior to the damage and if the damage occurred prior to the date the county assessor is required by law to deliver his or her report of assessment to the county clerk, then that property shall be revalued and assessed by the county assessor.
    2. Nothing in this subsection shall be construed as requiring a county assessor to seek to identify property which may have been damaged.
  2. An appeal shall lie from the action of the county assessor as in the case of other property in that year assessed.
1. All lands which may be annexed by any city or incorporated town which are being used for agricultural purposes shall be assessed as agricultural lands upon an acreage basis, regardless of the fact that any or all of the lands are embraced in a plat of a subdivision or other real estate development, and regardless of the fact that the lands may be zoned as commercial, industrial, or residential, and regardless of the fact that the lands may be adaptable to commercial, industrial, or residential uses.
2. Agricultural purposes shall include lands which are presently used and have been used for a period of five (5) continuous years in a bona fide farming, pasture, or grove operation by the owner, lessee, or some person in his or her employ.
3. Lands which have not been used for agricultural purposes prior to March 29, 1963, shall be prima facie subject to assessment on the same basis as assessed for the previous years, and any demand for a reassessment of such lands for agricultural purposes shall be subject to the scrutiny of the county assessor to the end that the lands shall be classified properly.
4. When lands subject to this section cease to be used for agricultural purposes, the lands shall be assessed as other lands of the same character.
5. For the purposes of this section, agricultural lands shall include dairy, livestock, poultry, and all forms of farm products and farm production.
1. 1. When the timber rights in any land shall, by conveyance or otherwise, be held by one (1) or more persons, firms, or corporations, and the fee simple in the land by one (1) or more other persons, firms, or corporations, it shall be the duty of the county assessor, when advised of the fact, either by personal notice or by recording of the deeds in the office of the recorder of the county, to assess the timber rights in the lands separate from the soil.
  2. In such a case, a sale of the timber rights for nonpayment of taxes shall not affect the title to the soil itself, nor shall a sale of the latter for nonpayment of taxes affect the title to the timber rights.
2. 1. It shall be the duty of the county assessor to assess timber rights with a description of the land on the real estate tax books, and the assessment shall be marked “timber”.
  2. Upon the nonpayment of taxes so assessed against the timber, it shall be advertised with a description of the land as “timber” giving the character or kind of the timber, in some newspaper as provided by law for nonpayment of taxes on land, and the timber shall be sold as provided by law for the sale of delinquent lands.
3. When any timber rights assessed as set out in this section become forfeited on account of nonpayment of taxes, they shall, in all things, be certified to and redeemed in the same manner as is provided for the certification and redemption of real estate upon which taxes duly assessed have not been paid.
1. 1. The county assessor shall assess all producing mineral interests in the county.
  2. 1. The county assessor shall assess the mineral interests in the land separate from the fee simple interest in the land when the:
      1. Mineral interests in the land are held by one (1) or more persons that are different from the person or persons holding the fee simple interest; and
      2. County assessor is advised of the separate holdings by the recording of a deed in the county recorder's office.
    2. When subdivision (a)(2)(A) of this section applies, a sale of the mineral interests for nonpayment of taxes shall not affect the title to the land itself, nor shall a sale of the land for nonpayment of taxes affect the title to the mineral interests.
2. When any mineral rights assessed as set out in subsection (a) of this section become forfeited on account of nonpayment of taxes, they shall, in all things, be certified to and redeemed in the same manner as is provided for the certification and redemption of real estate upon which taxes duly assessed have not been paid.
3. 1. Because of the difficulty of ascertaining the value of a nonproducing mineral right and in order to ensure equal and uniform taxation throughout the state, a nonproducing mineral right has zero (0) value for the purpose of property tax assessment and is included in the value of the fee simple interest assessed.
  2. If the fee simple in the land and the nonproducing mineral right that has zero (0) value as determined under subdivision (c)(1) of this section are owned by different persons, there is no property tax due on the mineral right.
  3. For a nonproducing mineral right that has zero (0) value as determined under subdivision (c)(1) of this section, the mineral right owner may agree to a voluntary property tax assessment of the mineral right and pay a property tax according to rules established by the Assessment Coordination Division with the assistance of the Arkansas Assessors' Association.
  4. When a nonproducing mineral right begins producing minerals, the mineral right shall be assessed for tax purposes in accordance with rules established by the Assessment Coordination Division.
4. 1. 1. If the Assessment Coordination Division determines that a county assessor has failed to assess mineral interests as required under this section, the Assessment Coordination Division shall notify the county assessor by certified mail with copies to the:
      1. County equalization board;
      2. County judge;
      3. County quorum court; and
      4. Reappraisal contractor, if applicable.
    2. In addition, the notice may provide that state reappraisal reimbursement funds to the county may be withheld pending the outcome of a hearing if a hearing is requested by the county assessor within thirty (30) days from the date of the notice.
  2. 1. The county assessor may waive the right to a hearing and within thirty (30) days from the date of the notice agree to complete corrective action as required by the Assessment Coordination Division and return a signed and dated compliance verification form to the Assessment Coordination Division.
    2. Upon receipt of the signed and dated compliance verification form, the Assessment Coordination Division shall release any withheld state reappraisal reimbursement funds and resume regular payments.
  3. Termination of state reappraisal reimbursement funds may occur if the county assessor fails to:
    1. Either request a hearing or return the signed and dated compliance verification form within thirty (30) days from the date of the notice; or
    2. Complete the corrective action within the time provided in the compliance verification form.
5. 1. 1. Except as otherwise provided in this subsection, if mineral rights are subject to a division order or declaration of interest, the division order or declaration of interest reflecting ownership interest as of January 1 of the assessment year shall be:
      1. In a common electronic workbook format established by the Assessment Coordination Division; and
      2. Submitted electronically by the distributor of the proceeds derived from the sale of minerals produced from the subject ownership interest to the county assessor annually by March 31.
    2. A producer or operator of ten (10) or fewer producing wells is not required to submit a division order or declaration of interest in an electronic format but shall submit a division order or declaration of interest reflecting ownership interest that is in substantial compliance with the format established by the Assessment Coordination Division under subdivision (e)(1)(A) of this section.
  2. 1. A county assessor shall assess a penalty on a producer or operator equal to ten percent (10%) of the property taxes due on the mineral interests contained in a division order or declaration of interest that was not submitted as required under this subsection by April 15.
    2. A penalty assessed under this section shall be:
      1. Collected by the county collector in the same manner as other penalties related to property taxes; and
      2. Paid into a late assessment fee fund established on the books of the county treasurer for the county assessor.
  3. A division order or declaration of interest submitted to a county assessor under this subsection is exempt from the Freedom of Information Act of 1967, § 25-19-101 et seq.
  4. A producer or operator that pays one hundred percent (100%) of the property taxes due on assessed mineral interests:
    1. Is not subject to the requirements of subdivision (e)(1) of this section; and
    2. Shall provide written notice of the producer's or operator's intent to submit a division order or declaration of interest under subdivision (e)(1) of this section that applies to the assessed mineral interests at least six (6) months before the division order or declaration of interest is submitted under subdivision (e)(1) of this section.
1. All personal property owned by any church and held for, or used for, commercial, business, rental, or investment purposes or purposes other than church purposes shall be listed for assessment annually for ad valorem tax purposes between the first Monday in January and May 31 of each year.
2. The church or its governing official or board shall annually list for assessment for ad valorem tax purposes all property which is not exempted from the tax under the provisions of this chapter.
3. 1. The Assessment Coordination Division shall promulgate reasonable rules to effectuate the provisions of this chapter.
  2. The division shall certify to the various county assessors and to each church in this state, upon request therefor, guidelines to be used in listing nonexempt property for assessment under the provisions of this chapter.
1. For any assessment of personal property taxes after December 31, 1993, a taxpayer may assess the personal property taxes by mail, by telephone, or in person.
2. 1. The county assessor shall permit assessment of real and personal property of individuals by telephone without a signature verification under oath.
  2. The assessment by telephone shall not apply to business, commercial, and industrial real and personal property assessments.
  3. 1. The county assessor shall mail to individuals assessing personal property by telephone, within five (5) working days from the date of assessment by telephone, an assessment containing a certification, which shall be provided by the county collector, indicating whether all required personal property taxes have been paid.
    2. The county assessor shall provide, if requested, proof of assessment for each motor vehicle assessed and proof of said payment information appropriate for motor vehicle registration renewal by mail.
3. The Director of the Assessment Coordination Division shall promulgate rules for the administration of this section. The forms and rules promulgated by the director shall apply to all counties in the state.
1. 1. When a person acquires ownership of a portion of a parcel of realty during the time of year when the county assessor is not making changes in the assessment book, that person may request the county assessor to apportion the current assessment between the remaining portion of the parcel and that acquired by the person making the request; provided, however, that:
    1. All necessary deeds and papers proving ownership of the portion have been filed with the county recorder;
    2. No provision has been made for payment of taxes on the realty at the time the person acquired the portion; and
    3. The request is made at least thirty (30) days before the last day to pay taxes on the assessment year in question.
  2. The request shall be in writing, signed by the owner, and shall include a complete legal description of the entire parcel and a complete legal description of the parcel being conveyed.
2. The provisions of this section shall not apply to any parcel of realty on which there is an actual tax delinquency at the time the request for allocation is made.
3. The county assessor shall allocate the assessment within thirty (30) days after the request and shall provide the information included in the allocation to the county collector.
4. 1. The county collector, after receiving notification of the allocation, shall accept payment in full toward any prior year's taxes currently due according to the values provided in the notification.
  2. Payment may be applied to the current tax bill as a partial payment, or a separate parcel number may be assigned to the portion and receipted to the new number.
5. Payment shall be considered as satisfying the tax lien for that portion of the prior year's taxes as legally defined in the notification.
1. 1. 1. There is established a homestead property tax credit for each assessment year that reduces the amount of real property taxes assessed on the homestead of each property owner by three hundred seventy-five dollars ($375).
    2. However, an assessment shall not be reduced to less than zero dollars ($0.00).
  2. Each property owner shall pay the reduced tax amount to the county.
  3. The homestead property tax credit adopted by this section shall be reflected on the tax bill sent to the property owner by the county collector.
  4. The county and taxing units within the county are entitled to reimbursement of the tax reduction resulting from the homestead property tax credit in accordance with § 26-26-310.
2. 1. Each county assessor is responsible for identifying the parcels of real property that are used as homestead residences before issuing tax bills.
  2. 1. Each property owner shall register with the county assessor proof of eligibility for the property tax credit if the property owner intends to claim a property tax credit.
    2. 1. The registration may be attached to the deed or other instrument conveying an interest in real property and filed with the circuit clerk, who shall remit the registration to the county assessor.
      2. The circuit clerk shall not file the registration described in this subdivision (b)(2).
    3. The property owner may submit a registration for the property tax credit directly to the county assessor.
  3. 1. The homestead property tax credit authorized by subdivision (a)(1) of this section is not allowed after October 15 of the year after the assessment.
    2. If October 15 falls on a Saturday, Sunday, or holiday observed by the United States Postal Service, the homestead property tax credit is allowed on, but no later than, the following business day that is not a holiday observed by the United States Postal Service.
  4. 1. A parcel of real property shall qualify as a homestead prior to January 1 of the year after assessment to be eligible for the property tax credit.
    2. Once a parcel of real property is determined to be eligible for the property tax credit, the parcel of real property shall remain eligible for that year regardless of a change in the use of the parcel of real property during the year.
    3. Under no circumstance may a property owner claim more than one (1) homestead property tax credit per calendar year.
  5. 1. The parties to a transfer of real property may prorate, as between themselves, the property tax credit and the benefits of the property tax credit by agreement of the parties.
    2. If a parcel of real property qualifies for the property tax credit, the property tax credit shall apply regardless of who or what entity pays the property tax.
  6. 1. When real property is transferred, the purchaser of the real property shall notify the county assessor of the new use of the real property.
    2. The notification may be by affidavit provided by the purchaser of the real property or on a form provided by the county assessor.
  7. The Division of Vital Records shall send to the county assessor by electronic mail a monthly report listing the residents of that county who have died.
1. 1. No property owner shall claim more than one (1) homestead property tax credit for each year.
  2. 1. If the county assessor determines that a property owner has claimed more than one (1) homestead property tax credit in a year, in addition to repayment of the homestead property tax credit, the designated preparer of the tax books shall extend a penalty of one hundred percent (100%) of the amount of the unlawfully claimed homestead property tax credit.
    2. 1. If the property owner has unlawfully claimed a homestead property tax credit in a county other than the county where his or her lawfully claimed homestead property tax credit was claimed, then the property owner shall pay the entire amount of the unlawfully claimed homestead property tax credit and the penalty at the time of payment of the property owner's taxes.
      2. If the property owner has unlawfully claimed a homestead property tax credit in the same county that he or she lawfully claimed a homestead property tax credit, then the property owner shall elect to either:
        
        Pay the entire amount of the unlawfully claimed homestead property tax credit and the penalty at the time of payment of the property owner's taxes; or
        
        Not claim a homestead property tax credit on any property in the county or on any other property in the state for two (2) years for each year that the credit was claimed unlawfully.
    3. In order to qualify for the homestead property tax credit after repayment of an unlawfully claimed homestead property tax credit and payment of a penalty, the property owner shall register with the county assessor according to § 26-26-1118(b)(2)(A).
2. 1. Every property owner shall report to the county assessor a change in eligibility to claim a property tax credit or a change in use of the property prior to January 1 of the year following the change.
  2. If the county assessor determines that a property owner has failed to report a change in the eligibility to claim a property tax credit or has failed to register a required change in the use of the property, the designated preparer of the tax books shall extend, in addition to repayment of the unlawfully claimed homestead property tax credit, the correct property tax due along with a penalty of one hundred percent (100%) of the amount of the unlawfully claimed homestead property tax credit.
  3. 1. If the property owner has unlawfully claimed a homestead property tax credit in a county other than the county where his or her lawfully claimed homestead property tax credit was claimed, then the property owner shall pay the entire amount of the unlawfully claimed homestead property tax credit and the penalty at the time of payment of the property owner's taxes.
    2. If the property owner has unlawfully claimed a homestead property tax credit in the same county that he or she lawfully claimed a homestead property tax credit, then the property owner shall elect to either:
      1. Pay the entire amount of the unlawfully claimed homestead property tax credit and the penalty at the time of payment of the property owner's taxes; or
      2. Not claim a homestead property tax credit on any property in the county or on any other property in the state for two (2) years for each year that the credit was claimed unlawfully.
3. 1. Penalties assessed under this section shall bind the real property and shall be entitled to preference over all judgments, executions, encumbrances, or liens, whenever created, until the penalties are repaid.
  2. Penalties collected under this section shall be remitted to the county treasurer to be credited to the county general fund.
4. 1. The debt owed for the repayment of an unlawfully claimed homestead property tax credit assessed under this section shall bind the real property and shall be entitled to preference over all judgments, executions, encumbrances, or liens, whenever created, until it is repaid.
  2. A homestead property tax credit repaid under this section from a person who was not entitled to claim a credit shall be remitted to the Treasurer of State for deposit into the Property Tax Relief Trust Fund.
5. 1. The property owner may appeal to the county court the determination by a county assessor that:
    1. The property owner shall repay an unlawfully claimed homestead property tax credit;
    2. The property owner shall pay penalties; or
    3. Any other determination that the property owner has violated this section.
  2. To appeal the determination by a county assessor, the property owner must file a petition with the county court within thirty (30) days from the date of the determination by the county assessor.
  3. After the petition is filed, the county court shall set a hearing within thirty (30) days after the filing of the petition.
  4. At the hearing, the property owner and county assessor shall present evidence to support their positions.
  5. The county court shall provide the property owner, county assessor, and county clerk with the county court's decision in writing within ten (10) business days after the hearing.
  6. The property owner or county assessor may appeal the county court's decision to circuit court within thirty (30) days after the date of the decision.
6. 1. No penalties under this section shall be imposed against a property owner for an unlawfully claimed property tax credit after the expiration of three (3) years from the date the property tax credit was claimed.
  2. No repayment requirement under this section shall be imposed against a property owner for an unlawfully claimed property tax credit after the expiration of three (3) years from the date the property tax credit was claimed.
  3. This section does not alter the property owner's deadline to claim the homestead property tax credit as provided in § 26-26-1118(b)(3).
1. As used in Arkansas Constitution, Amendment 79, “disabled person” means a person who:
  1. Is disabled for purposes of Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., as in effect on January 1, 2003, for any period during the calendar year;
  2. Is a permanently and totally disabled veteran as defined by 38 C.F.R. § 4.1 et seq., Part IV, as in effect on January 1, 2003; or
  3. Has received permanent and total disability insurance benefits for any period of time during the calendar year.
2. 1. When a disabled person or a person sixty-five (65) years of age or older sells his or her real property, the purchaser shall not be entitled to claim any reduction to the real property's assessed value.
  2. On or after January 1 of the year following the date of the sale, the county assessor shall assess the real property at its full market value, unadjusted for assessment limitations required by Arkansas Constitution, Amendment 79.
1. To determine whether a rollback of millage rates is required under Arkansas Constitution, Article 16, § 14, each taxing entity shall compare the adjusted taxable assessed values of the real and personal property in the current year to the adjusted taxable assessed values of the real and personal property in the preceding year.
2. To calculate the millage rollback, the adjusted taxable assessed value of the real property in the current year shall be compared to the adjusted taxable assessed value of real property in the preceding year.
1. As used in this subchapter and in Arkansas Constitution, Amendment 79:
  1. “Assessed value” means twenty percent (20%) of the appraised value of the real property;
  2. 1. “Homestead” means the dwelling of a person that is used as his or her principal place of residence with the contiguous land, excluding all land valued as agricultural land, pasture land, or timberland.
    2. “Homestead” includes:
      1. A dwelling owned by a revocable or irrevocable trust and used as the principal place of residence of the person who formed the trust; and
      2. A dwelling owned by an irrevocable trust and used as the principal place of residence of a beneficiary of the trust, as evidenced by submitting a signed, notarized, and file-marked copy of the irrevocable trust to the county assessor;
  3. “New construction” means changes to real property that have occurred to real property already on the assessment roll;
  4. “Newly discovered real property” means real property that has never been on the assessment roll or that has changed use; and
  5. 1. “Property owner” means a person who is:
      1. The owner of record of real property or the mortgagee of the real property;
      2. A buyer under a recorded contract to purchase real property; or
      3. A person holding a recorded life estate in real property.
    2. “Property owner” includes the previous record owner of tax-delinquent real property that has vested in the State of Arkansas in care of the Commissioner of State Lands under § 26-37-101(c) if the previous record owner continues to occupy the residence subject to his or her right of redemption.
2. The Assessment Coordination Division may by rule define the term “substantial improvements” and any other term necessary to administer this subchapter.
1. When a person sells his or her real property, the county assessor shall assess the real property at twenty percent (20%) of the appraised value at the next assessment date after the date of the transfer of title to the real property.
2. The owner of real property to whom title is transferred by a sale is not entitled to claim any limitation on the assessed value of the real property until the second assessment date after the date of the transfer of title to the real property.
3. This section does not apply to any transfer of title to real property claimed as a homestead in which the owner or beneficiary of the homestead retains a life-estate interest in the homestead following the transfer of title to the real property.
1. 1. A homestead used as the taxpayer's principal place of residence that is purchased or constructed on or after January 1, 2001, by a person who is disabled or by a person sixty-five (65) years of age or older shall be assessed for property tax thereafter based on the lower of:
    1. The assessed value as of the date of purchase or construction; or
    2. A later assessed value.
  2. When a person becomes disabled or reaches sixty-five (65) years of age on or after January 1, 2001, the person's homestead that is used as the taxpayer's principal place of residence shall thereafter be assessed based on the lower of:
    1. The assessed value on the person's sixty-fifth birthday;
    2. The assessed value on the date the person becomes disabled; or
    3. A later assessed value.
  3. If a person is disabled or is at least sixty-five (65) years of age and owns a homestead used as the taxpayer's principal place of residence on January 1, 2001, the homestead shall be assessed based on the lower of:
    1. The assessed value on January 1, 2001; or
    2. A later assessed value.
2. Residing in a nursing home does not disqualify a person from the benefits of subsection (a) of this section.
3. If a homestead is jointly owned and one (1) of the owners qualifies under subsection (a) of this section, then all owners shall receive the benefits of subsection (a) of this section.
4. Subsection (a) of this section does not apply to substantial improvements to real property.
1. The Assessment Coordination Division shall:
  1. Establish mandatory guidelines for county assessors to follow in:
    1. Identifying property that is exempt from ad valorem taxation; and
    2. Assessing business inventory;
  2. Adopt rules necessary for:
    1. The general guidance and assistance of county assessors in identifying exempt property and assessing business inventory; and
    2. Determining when a county is noncompliant with the rules established by the division under this section;
  3. Confer with and assist county assessors in identifying exempt property and assessing business inventory to ensure that all assessments of property are just and uniform throughout the state;
  4. Prescribe any forms necessary to assist county assessors in uniformly identifying exempt property and assessing business inventory;
  5. Monitor each county's compliance with the rules established by the division under this section; and
  6. As soon as is practicable, notify immediately the Legislative Council or, if the General Assembly is in session, the Joint Budget Committee, when a county is determined to be noncompliant with the rules established by the division under this section.
2. A county assessor shall:
  1. Assess property in accordance with the rules adopted by the division; and
  2. Use only a form that is prescribed or approved by the division to identify exempt property or assess business inventory.
3. Upon receiving notification under subdivision (a)(6) of this section, the Legislative Council or, if the General Assembly is in session, the Joint Budget Committee, may recommend to the General Assembly that a noncompliant county's funds under § 26-26-310(b)(2)(C) that are to be allocated to the county assessor be reduced or withheld until the county becomes compliant under this section.
1. 1. Each separate parcel of real property shall be valued at its true market value in money, excluding the value of crops growing thereon.
  2. The price at which the real estate would sell at auction or at a forced sale shall not be taken as the criterion of the true value.
2. Each tract of land belonging to the state or to any county, city, town, or charitable institution, whether incorporated or unincorporated, and saline, swamp, seminary, school, or mineral lands held under a lease exceeding five (5) years and not exceeding ten (10) years shall be valued at the price the county assessor believes could be obtained at a private sale for the leasehold estate.
3. 1. Personal property of any description shall be valued at the usual selling price of similar property at the time of listing.
  2. If any personal property shall have no well-fixed or determined value in that locality at the time, then it shall be appraised at such price as in the opinion of the county assessor could be obtained at that time and place.
4. Investments in bonds, stocks, joint-stock companies, or otherwise shall be valued at their value in money, and the quotations and selling price thereof may be considered in determining their values.
5. Money, whether in possession or on deposit in this state, or out of it subject to the order or control of the person listing, shall be entered in the statement at the full amount thereof.
6. Every credit for a sum certain, payable either in money, property of any kind, labor, or service, shall be assessed according to its true value. If for a specified number or quantity of any article of property, for a certain amount of labor, or for services of any kind, it shall be assessed according to its true value.
7. Annuities or moneys receivable at a stated period shall be rated at the price which they may be worth in money.
8. Where the fee of the soil in any tract, parcel, or lot of land is in any person, natural or artificial, and the right to any mineral therein is in another, it shall be valued and listed agreeably to the ownership, in separate entries, and taxed to the parties owning it respectively.
9. 1. 1. The market value of an off-premises advertising sign shall be determined using the cost approach to avoid the inclusion of exempt intangible personal property in the valuation.
    2. The market value of an off-premises advertising sign shall not be determined using the income approach or the sales comparison approach.
  2. An adjustment shall not be made for the traffic count or other factors relating to the location of an off-premises advertising sign in determining the market value of an off-premises advertising sign.
  3. 1. The depreciation period used in determining the market value of an off-premises advertising sign shall not exceed twenty (20) years for a static off-premises advertising sign and seven (7) years for a digital off-premises advertising sign.
    2. For purposes of depreciation, the residual value of an off-premises advertising sign shall not exceed twenty percent (20%) of the cost of the off-premises advertising sign.
    3. 1. To promote uniform taxation of off-premises advertising signs, straight-line depreciation shall be used in determining the market value of an off-premises advertising sign.
      2. The effective age of an off-premises advertising sign shall not be used for purposes of depreciation.
1. Any person owning or having in his or her possession or under his or her control, within this state, with authority to sell it, any personal property purchased with a view to its being sold at a profit, or which has been consigned to him or her from any place out of this state, to be sold within this state, shall be held to be a merchant for the purpose of this valuation.
2. 1. The property shall be listed for taxation and in estimating the value the merchant shall take the average value of the property in his or her possession or under his or her control during the year immediately preceding January 1 of the year in which the assessment is made.
  2. If the merchant has not been engaged in the business for one (1) year, then he or she shall take the average valuation during such time as he or she shall have been so engaged.
  3. If the merchant is commencing business, he or she shall take the value of the property at the time of assessment.
1. Every person who shall purchase, receive, or hold personal property of any description for the purpose of adding to the value thereof by process of manufacturing, refining, rectifying, or by combination of different materials, with a view of making a gain or profit by so doing, shall be held to be a manufacturer. He or she shall make out and deliver to the county assessor a sworn statement of the amount of his or her other personal property subject to taxation, also including in his or her statement the average value, estimated as provided in § 26-26-1203, of all articles purchased, received, or otherwise held for the purpose of being used, in whole or in part, in any process or operation of manufacturing, combining, rectifying, or refining which from time to time he or she shall have on hand during the year next previous to the time of making the statement, if so long he or she shall have been engaged in such manufacturing business, and, if not, then during the time he or she shall have been so engaged.
2. Every person owning a manufacturing establishment of any kind and every manufacturer shall list as a part of his or her manufacturer's stock the value of all engines and machinery of every description, used or designed to be used for the indicated purpose.
1. Housing owned and operated by a nonprofit corporation or association for occupancy or use by an elderly person or a person with a disability, the construction of which is financed by the United States, shall be valued, for purposes of assessment, on the basis of the equity owned in the housing by the nonprofit corporation or association.
2. As used in this section, unless the context otherwise requires:
  1. “Elderly person” means a person sixty-two (62) years of age or older and the spouse of that person;
  2. “Equity” means the market value of the housing less any mortgage indebtedness to the United States;
  3. “Housing” means structures consisting of eight (8) or more residential units for occupancy and use by elderly or handicapped persons, including essential contiguous land and related facilities, as well as all personal property of the corporation or association used in connection with the facilities;
  4. “Nonprofit corporation or association” means any corporation or association incorporated under the laws of this state not otherwise exempt from general ad valorem, real, and personal property taxes, operating a housing facility or project qualified, built, and financed by the United States under § 202 of the National Housing Act of 1959, as amended, 12 U.S.C. § 1701q; and
  5. “Person with a disability” means any adult having an impairment which is expected to be of long, continued, and indefinite duration; is a substantial impairment to his or her ability to live independently; and is of a nature that such ability to live independently would be improved by more suitable housing conditions and shall include an adult who is a person with a developmental disability.
1. The General Assembly recognizes that motor vehicles are unique in regard to the procedure for assessment of personal property taxes, registration and titling, and payment of sales taxes and that there is a correlation between sales of motor vehicles by motor vehicle dealers and the valuation of motor vehicle inventory.
2. The method of determining the average value of inventory of motor vehicle dealers in accordance with § 26-26-1201 and § 26-26-1203(b) shall be as provided in this section.
3. The assessment of motor vehicle inventories of motor vehicle dealers shall be determined by calculating the monthly average of the number of sales of new and used motor vehicles by the dealer and multiplying the average by the unit inventory value.
4. The unit inventory value shall be based on the typical new and used car values by name of manufacturer as set forth in the Arkansas Commercial Personal Property Appraisal Manual published in the year prior to the year of assessment by the Assessment Coordination Division.
1. Whenever, upon the complaint made to the Arkansas Public Service Commission by the county judge, county assessor, or county equalization board of any county or upon the commission's own investigation and motion, and a summary hearing in that behalf had, it shall be made to appear satisfactorily to the commission that the assessment of the property in any county, or district or subdivision thereof, is not in substantial compliance with law and that the interest of the public will be promoted by a reassessment of the property, then the commission shall have authority, at its discretion, to order a reassessment of all or any part of the taxable property in the county, or district or subdivision thereof, to be made by the local assessment officers, or to cause a reassessment to be made by a person to be recommended by the county judge and appointed by the commission for that purpose.
2. Due notice of the time and place fixed for a hearing upon any complaint made as indicated shall be mailed, at least fifteen (15) days before the time fixed for the hearing, to the county judge and county assessor of the county affected, and the county judge shall immediately cause the notice to be published, at the expense of the county, in a newspaper having a general circulation in the county and district.
1. Any person appointed to reassess the property or any class of property in any county, or district or subdivision thereof, shall have all the power and authority given by law to deputy county assessors and shall perform all the duties and be subject to all restrictions and penalties imposed by law upon deputy county assessors.
2. 1. Appointees shall have access to all public records and files which may be needful or serviceable in the performance of the duty imposed and while engaged in this duty shall be entitled to have the custody and possession of the assessment roll containing the original assessment in the district and all other statements and memoranda relative thereto.
  2. A blank assessment roll, if necessary, and all property statements and other blank forms needful for the purpose of reassessment shall be furnished by the county clerk at the expense of the county.
1. For their services in making any reassessment of property pursuant to the order of the Arkansas Public Service Commission, local assessment officers shall receive no compensation other than the salary or fees allowed by law for making the original assessment; but when the person making any reassessment does not officially serve the county, or district or subdivision thereof, compensation for which service is elsewhere provided, then each person so employed shall receive five dollars ($5.00) per day for each day's services.
2. Claims for services shall be presented, audited, and paid as are other claims against the county.
1. 1. Prior to any countywide reappraisal of property for ad valorem tax purposes, the county assessor or the county assessor's employees or agents shall notify the property owners of the county assessor's intent to reappraise at least forty-five (45) calendar days prior to the reappraisal.
  2. Prior to any reappraisal of an individual's property for ad valorem tax purposes other than a countywide reappraisal under subdivision (a)(1) of this section, the county assessor or the county assessor's employees or agents shall give the property owner reasonable notice of the county assessor's intent to reappraise the property owner's property.
  3. The notice required by this section may be accomplished by publication in newspapers, by radio, by television, by direct mail, or by any other reasonable means.
2. 1. If a reappraisal under subsection (a) of this section results in an increase in the assessed value of the property, the county assessor shall note in writing on the assessment records the:
    1. Justification for the increase;
    2. Date the property was inspected; and
    3. Details of the inspection.
  2. The records of the appraisal shall be public records subject to inspection under the Freedom of Information Act of 1967, § 25-19-101 et seq.
3. Any property owner whose property is reappraised under this section may appeal to the county equalization board, and the county equalization board is required to grant an adequate hearing on the appeal.
1. 1. Except as provided in subdivision (a)(2) of this section, property shall not be reappraised for ad valorem tax purposes more than one (1) time every five (5) years unless the reappraisal is the result of a countywide reappraisal.
  2. Producing mineral interests shall be reappraised annually for ad valorem tax purposes.
2. In the event that there is a countywide reappraisal of property for ad valorem tax purposes in any county, taxes shall not be assessed on the basis of the reappraised value of any property in the county until all taxable property in the county has been reappraised.
3. When a countywide reappraisal of property is completed in any county and taxes are first assessed on the newly reappraised values, the provisions of Arkansas Constitution, Amendment 59, and § 26-26-401 et seq. relative to the adjustment or rollback of millage levied for ad valorem tax purposes shall be applicable.
4. Newly discovered real property, new construction and improvements to real property, and personal property shall be listed, appraised, and assessed as otherwise provided by law until the countywide reappraisal of property is completed.
1. It is the purpose and intent of this subchapter to reduce the number of persons avoiding the payment of tangible personal property taxes by moving from one county to another within the state or by moving outside the state between the time of assessing property for taxes and the time of collecting taxes thereon by establishing a system that reduces the time period from the date of assessment to the date of collection.
2. It is further the intent of this subchapter that, when personal property taxes are paid in advance as provided for in this subchapter, the normal procedures carried out by the various county officials and state officials with respect to property taxes shall continue in effect, and, if it is determined through the normal procedures presently in effect that any person who paid personal property taxes in advance overpaid such taxes, the overpayment will be refunded to the taxpayer, and that, if the advance payment of the tangible personal property taxes by a taxpayer is an underpayment of the tax, the taxpayer will be billed for the additional amount due.
3. It is further the intent of this subchapter that the taxpayer will be required to furnish proof of payment of tangible personal property taxes as a condition for registering or renewing the registration of any motor vehicle.
1. Nothing contained in this subchapter shall be construed to limit or restrict the right of a taxpayer to make application to the equalization board for adjustment of the tangible personal property assessment or the right of the taxpayer to obtain judicial review of the final determination of the equalization board.
2. Nothing contained in this subchapter shall be construed to limit or restrict or alter the authority and responsibility of any county official, the county equalization board, the county court, or any other agency or person having responsibility with respect to the assessment and collection of ad valorem taxes on tangible personal property.
1. A penalty of ten percent (10%) of the taxpayer's total tangible personal property taxes shall be imposed on any taxpayer who fails or refuses to assess his or her tangible personal property on or before May 31 of each year.
2. A penalty of ten percent (10%) of the taxpayer's total tangible personal property taxes shall be assessed if the taxpayer fails or refuses to pay tangible personal property taxes on or before October 15 next following the assessment of the tangible personal property for taxes.
1. 1. A taxpayer shall annually assess his or her tangible personal property for ad valorem taxes during the period from January 1 through May 31.
  2. 1. Taxable tangible personal property of a new resident and a new business established between January 1 and May 31 and taxable tangible personal property acquired by a resident during the period from January 1 through May 31, except tangible personal property acquired during the period of May 2 through May 31, shall be assessable without delinquency within thirty (30) days following the date of its acquisition.
    2. All taxable tangible personal property assessable during this period shall be assessed according to its market value as of:
      1. January 1 of the year of the assessment; or
      2. The date of acquisition if the tangible personal property was acquired during the period of January 2 through May 31 of the year of assessment.
  3. The ten percent (10%) penalty for delinquent assessment shall not apply to tangible personal property becoming eligible for assessment through May 31 if the tangible personal property is assessed on or before May 31, except that:
    1. If May 31 of an assessment year falls on a Saturday, Sunday, or postal holiday, then the last day to assess without incurring a penalty shall be the following business day; and
    2. Tangible personal property acquired during the period of May 2 through May 31 shall be assessable without penalty within thirty (30) days following the date of its acquisition.
  4. 1. Taxable tangible personal property of a person moving his or her residence from Arkansas, and taxable tangible personal property disposed of by a resident and a business, during the period between January 1 and May 31, if assessed for that year, shall be removed from the assessment rolls, and, if not assessed, shall not be deemed assessable for that year.
    2. Before removal of the tangible personal property from the assessment rolls, it shall be the responsibility of the property owner to provide the county assessor with notification, and, upon request from the county assessor, proof of the disposal.
  5. The tangible personal property referred to in subdivisions (a)(1)-(4) of this section shall not include the inventory of a commercial establishment because specific provisions for the assessment of the inventory of a commercial establishment is provided elsewhere in this Arkansas Code.
  6. 1. The county assessor may list, value, and assess tangible personal property for a period extending through July 31 of each year of assessment.
    2. Assessment of tangible personal property after July 31 shall be according to provision of existing law.
2. Personal property taxes are payable each year between the first business day in March and October 15 inclusive.
1. It is the purpose of this subchapter to clarify the law relating to the taxation of state and national banks, savings and loan associations, and building and loan associations chartered under state and federal law and to simplify and to broaden the tax base applicable to these financial institutions.
2. It is the intent of this subchapter to repeal the capital stock tax and, in lieu thereof, to tax state and national banks, savings and loan associations, and building and loan associations under existing tax laws generally applicable to business corporations.
1. Financial institutions shall be subject to the ad valorem real property tax levied pursuant to the authority granted in the laws of this state, to the same extent as other owners of real property in this state.
2. The assessment of taxes upon the real property of national banking associations and state banks and trust companies shall be had and done in the manner provided by law for the assessment of all other real property by whomsoever owned.
1. Bridge, savings banks, mutual loan, building, transportation, construction, and all other companies, corporations, or associations incorporated under the laws of this state, or under the laws of any other state, and doing business in this state, other than the companies, corporations, or associations whose taxation is specifically provided for in this subchapter, shall, through their president, secretary, principal accounting officer, or agent, annually, during the month of July, make out and deliver to the county assessor of the county where the company or corporation is located or doing business a sworn statement of the capital stock setting forth particularly:
  1. The name and the location of the company or association;
  2. The amount of capital stock authorized, and the number of shares into which the capital stock is divided;
  3. The amount of capital stock paid up, its market value, and, if no market value, then the actual value of the shares of stock;
  4. The total amount of all the indebtedness, except the indebtedness for current expenses, excluding from the indebtedness the amount paid for the purchase or improvement of the property; and
  5. True valuation of all tangible property belonging to the company or corporation. The schedule shall be made in conformity to instructions and forms as may be prescribed by the Auditor of State and shall also show in what county the property is situated.
2. Corporations doing business in this state engaged exclusively in the manufacture of cotton or fiber goods or yards, which is commonly called the textile manufacturing business, having mills located in this state, and other corporations to the extent of their assets invested in textile mills located in this state, shall not be required to comply with the provisions of this section for a period of seven (7) years after the location of its textile mills in this state.
3. 1. The county assessor shall, annually, at least by June 20, deliver to the president, secretary, accounting officer, or agent of any such company, corporation, or association located in or doing business in the county a notice in writing to return the schedule by July 31 next ensuing.
  2. 1. Any president, secretary, principal accounting officer, or agent of any companies or corporations, upon whom notice shall have been served, willfully neglecting or refusing to make the return by July 31 next ensuing after the delivery of the notice, shall be guilty of a misdemeanor and, upon conviction, shall be fined in any sum not exceeding one hundred dollars ($100) or imprisoned not exceeding three (3) months, or both.
    2. The county assessor shall, from the best information he or she can obtain, make out and enter upon the proper assessment roll a list, with the valuation of all tangible and intangible property belonging to a defaulting company or corporation subject to taxation by the provisions of this section, with fifty percent (50%) penalty.
1. For purposes of this subchapter, property is used or held for use in the operation of a company as such if it is owned or controlled by a utility or carrier and is being utilized, is capable of utilization, in the operation of a utility or carrier, or is being constructed for future utilization in the utility or carrier operation. However, leased property controlled by a utility or carrier shall not be assessed by a county assessor in this state if the property is assessed for ad valorem tax purposes by the Tax Division of the Arkansas Public Service Commission.
2. 1. All property, both real and personal, used or held for use in the operation of the company as such, of carriers, by pipeline, railroads, street railway, express, sleeping car, intercounty bus lines, intercounty motor freight, airline, ferry, interurban, toll bridge, toll road, or water transportation, and by similar carriers, and all telegraph, telephone, electric power, gas, water, and other similar companies shall be assessed for ad valorem taxation by the division.
  2. Each such company doing business or authorized to do business in Arkansas and owning or having control of property, or owning or having control of property in Arkansas, shall, through its owner, president, secretary, general manager, or agent having control of the company's affairs in this state, on or before March 1 of each year, make a statement in writing to the division showing all property subject to assessment and taxation in this state. The statement shall truly show the amount, kind, and value of the property as of January 1 next preceding the filing of the annual statement. However, in the case of motor carriers, the statement and information shall be filed annually with the division on or before March 31.
1. Each company, as defined in § 26-26-1601, shall annually on or before March 1, make and deliver to the Tax Division of the Arkansas Public Service Commission, in such form as the division may prescribe, a statement of the proper official, agent, or person of the company, showing in detail the following facts:
  1. Name of company;
  2. The status of the company, whether person, firm, company, copartnership, association, or corporation, and under the laws of what state or country organized or incorporated;
  3. Location of its principal office within or without Arkansas;
  4. Name and post office address of the owner, president, secretary, general manager, and agent having control of the company's affairs in this state;
  5. The par value of all outstanding capital stock and funded debt of every kind, the market and, if no market, the actual value on January 1 next preceding;
  6. The total gross revenues, expenses, net revenues, and net income, separately, from utility operation, nonutility operation, and nonoperating properties, for the next preceding calendar year, both for the State of Arkansas and all states if the company operates in states other than Arkansas, in which latter case Arkansas's stated proportion of the total revenues, expenses, and income must include not only revenues, expenses, and income arising from intrastate business but also the state's due proportion of the revenues, expenses, and income from interstate business;
  7. The total value of all real and personal property owned or controlled by the company and situated outside of Arkansas on January 1 next preceding showing separately that part used in connection with the daily operations of the company and that part used otherwise, if there is any;
  8. A detailed statement of all real and personal property owned or controlled by the company and situated in Arkansas on January 1 next preceding, giving the description, location, and value thereof, and showing separately that part used in connection with the daily operations of the company and that part used otherwise, if there is any; and
  9. Such other and additional information as to ownership, amount, kind, location, operation, and value of property owned or controlled as the division may require.
2. The official, agent, or person of the company submitting the required statement shall make and sign, on the face of the required statement, the following declaration:
1. 1. Unless for good cause shown, should any company fail to file on or before March 1 the complete statement required of it by §§ 26-26-1602 and 26-26-1603, the time for making the return shall be extended for not more than sixty (60) days.
  2. The Tax Division of the Arkansas Public Service Commission shall advise the company in writing of the delinquency, and, thereafter, should the company fail to file the statement before May 1, the division shall immediately report the delinquency to the commission, and should delinquency exist on May 31 of the assessment year, the commission shall certify the delinquency to the Secretary of the Department of Finance and Administration.
2. 1. By proper action in the name of the state, the secretary may recover from any delinquent company a penalty not to exceed one hundred dollars ($100) for each day's delinquency, beginning as of March 1 of the assessment year.
  2. In the alternative, the secretary may petition the commission for revocation of the certificate or permit of authority issued to the delinquent company to operate in the State of Arkansas.
1. 1. The Tax Division of the Arkansas Public Service Commission shall meet the first Monday in March of each year for the purpose of assessing the property which it is required to assess.
  2. Before entering upon the discharge of his or her duties, each commissioner shall subscribe to an oath that he or she will well and truly value and assess the property required to be assessed by the division. The oath shall be recorded at length upon a book used by the division for recording the assessments.
2. The division shall examine the returns filed of all persons, firms, companies, copartnerships, associations, and corporations required by law to make them and, also, such information as it may have obtained in addition thereto, and shall determine the valuation of the items of property which it is required to value, and shall assess the property at its true and full market or actual value, or such percentage thereof as the division shall have so adopted and ordered.
3. In valuing the property of persons, firms, companies, copartnerships, associations, and corporations, the division shall take into consideration the value of all the property of the company as a unit, whether all or only a part of it is within this state.
1. The returns of the persons, firms, companies, copartnerships, associations, and corporations whose assessment is provided for by this subchapter shall not be held to be conclusive as to the value of the property so returned, but the Tax Division of the Arkansas Public Service Commission may make such assessment of the property as it may deem just and equitable.
2. The division shall ascertain the value of all property, tangible and intangible, including good will, easements, and franchises, except the right to be a corporation, it being the purpose of this subchapter to include in the valuation every element that adds value to the property.
1. The valuation of the taxable property, both real and personal, of all persons, firms, companies, copartnerships, cooperatives, associations, and corporations required by law to be assessed by the Tax Division of the Arkansas Public Service Commission shall be made upon the consideration of what a clear fee simple title thereto would sell for under conditions which usually govern the sale of property of that character.
2. The division in determining fair market value, insofar as other evidence and information in its possession does not make it appear improper or unjust for it to do so, shall ascertain and determine as nearly as it can and consider:
  1. Original cost less depreciation, replacement cost less depreciation, or reconstruction cost less depreciation. Proper consideration may be made for functional or economic obsolescence and for operation of nonprofitable facilities which necessitate regulatory body approval to eliminate;
  2. 1. The market value of all outstanding capital stock and funded debt, excluding current and deferred liabilities, except accumulated deferred income taxes, investment tax credits, and items associated therewith. A premium or discount to capital stock may be considered above or below the current market price where evidence warrants.
    2. In cases where the outstanding capital stock is not traded or is not capable of reasonably accurate determination, book values may be substituted;
  3. 1. 1. The utility operating income after deduction of all actual income taxes paid, capitalized in the manner and at such rates as shall be just and reasonable, but in no event shall the capitalization rate be less than six percent (6%). The deduction from income of deferred income taxes, investment tax credits, and items associated therewith is specifically prohibited for purposes of this subsection.
      2. The utility operating income after the deduction of all income tax expense capitalized in a manner which recognizes the utility's ability to defer income taxes, utilizing accumulated deferred income taxes, investment tax credits, and items associated therewith as cost-free debt in the capital structure to determine the capitalization rate.
    2. The utility operating income to be capitalized should be determined by reference to the company's historical income stream, appropriately weighted, with consideration to the future income stream.
    3. Directory sales revenue produced in this state is considered attributable to utility real and personal property located in this state and is to be appropriately considered in determining operating income; and
  4. Such other information as evidence to value as may be obtained that will enable the division to determine the fair market value of the property of the companies. The fair market value of affiliated properties separately assessed and the nonoperating properties of such companies shall be ascertained and determined as nearly as possible and deducted from the total unit value of the properties of the companies if the properties are included in the unit value. Insofar as it is possible or practical to do so, the same method of evaluating the properties of the companies separately assessed, or nonoperating properties, shall be used as was used in determining the unit value of the company.
3. The division, in valuing property pursuant to subsection (b) of this section for broadband communications entities, shall exclude all intangible property acquired after January 1, 2015, in accordance with the following provisions, provided that the values determined pursuant to this subsection shall be correlated to a final unit value and then allocated to the state:
  1. The cost approach should be calculated based on the total original cost of the tangible and intangible operating property, less depreciation and amortization reflected on the company's balance sheet;
  2. The cost approach value determined pursuant to subdivision (c)(1) of this section shall be adjusted to determine the “adjusted cost indicator value”. The adjusted cost indicator equals the value determined pursuant to subdivision (c)(1) of this section reduced by all intangible property acquired after January 1, 2015. Intangible assets acquired after January 1, 2015, shall not include assets previously included in an Arkansas property tax valuation;
  3. The value determined pursuant to subdivisions (b)(2) and (3) of this section shall be adjusted by multiplying each by a fraction as follows; provided, however, that this adjustment shall only apply if the original cost less depreciation of the tangible property located in this state is less than or equal to the adjusted value allocated to this state:
    1. The numerator equals the “adjusted cost indicator value” determined pursuant to subdivision (c)(2) of this section; and
    2. The denominator equals the original cost of the operating assets less depreciation as reflected on the balance sheet determined pursuant to subdivision (c)(1) of this section;
  4. For purposes of this section, intangible property includes but is not limited to goodwill, trademarks and trade names, licenses, established customer base and lists, patents, franchises, rights and proprietary technology, but, solely for purposes of this subsection, intangible property does not include software; and
  5. For purposes of this subsection, “broadband communications entities” means entities investing in intangible and tangible property to enhance broadband deployment and connectivity and shall include the following:
    1. Commercial mobile service as defined in § 23-17-403;
    2. Telecommunications providers as defined in § 23-17-403;
    3. Video service providers as defined in § 23-19-202; and
    4. Cable television systems as defined in § 26-26-1801.
1. After the Tax Division of the Arkansas Public Service Commission shall have completed the original assessment of any property within its jurisdiction, it shall, as soon as practicable, give notice in writing by first class mail to the owner, officer, agent, or attorney making the statement, or, if no statement has been filed, then the notice is to be forwarded by first class mail to the party or company against which the assessment has been made, showing the total amount of the assessment.
2. 1. 1. If the owner of the property so assessed is dissatisfied with the assessment made by the division, as approved by the Arkansas Public Service Commission or the State Highway Commission, the owner, within thirty (30) days from date of notice under subsection (a) of this section, may file with the appropriate commission a written petition for review of the assessment.
    2. The deadline for filing a written petition under subdivision (b)(1)(A) of this section may be extended for fifteen (15) days by order of the appropriate commission for good cause shown.
    3. 1. A written petition under subdivision (b)(1)(A) of this section may be signed and filed by the property owner or an officer, agent, or attorney on the property owner's behalf.
      2. However, the appropriate commission may require that the property owner be represented by a licensed attorney in any filings or proceedings following the filing of the petition.
  2. 1. All hearings on the petition shall be had before the appropriate commission or its agent on or before November 1 after assessment notice has been given. However, hearings on petitions for review of assessments of bus lines, motor carriers, airlines, water transportation companies, and private car companies, which assessments are certified to the Secretary of the Department of Finance and Administration for collection of tax, shall be to the appropriate commission or its agent, on or before December 31 of the assessing year.
    2. However, a hearing may be continued by order of the appropriate commission for a period not to exceed ninety (90) days.
3. 1. The company, on an appeal to the Pulaski County Circuit Court from an order or finding of the appropriate commission during the pendency of a final judgment after any appeal, shall pay all taxes due before the date on which penalties are attached based upon the original assessment.
  2. If on or prior to the final date for the payment of taxes without penalty the final judgment of the court shall have been entered, all taxes due shall be based upon the amount of the assessment arising under the final judgment.
4. 1. In the event any company shall not have paid on or before the final date for payment of taxes without penalty, all taxes due based upon the assessment record on the tax rolls on the final date, then the company shall be required to pay, in addition to these taxes and by reason of the delinquency, all penalties at the time provided by law, together with the costs as shall have accrued.
  2. 1. At the time the payment is made, the company shall, in writing, advise the official to whom payment of taxes, penalties, and costs have been paid that a specified amount thereof is being paid under protest.
    2. 1. Upon receipt of the payment and written protest, the collecting official shall cause the specified amount set forth by the company to be deposited into an ad valorem tax protest fund.
      2. If as a result of any final judgment the company shall be entitled to a refund, then the collecting official shall cause a refund, as determined by the final judgment to be made from the fund; and the remaining if any or the whole if no refund is due the company shall be distributed for the benefit of the respective taxing units entitled thereto.
1. When the Tax Division of the Arkansas Public Service Commission has ascertained the assessed value of the property of any company which it is required to originally assess other than bus lines, motor freight, airlines, water transportation companies, and private car companies, the valuation shall be entered in detail in a record to be kept for that purpose.
2. On or before July 15 of each year, it shall be the duty of the division to certify out, through its director or secretary, to the proper official of the respective counties in which is located or operated any property which it is required to assess so much of the value of the property as has been assigned or apportioned to each county and the districts and towns thereof.
3. The official shall enter upon the proper record the assessments certified, and neither the county assessor, the county equalization board, nor the county court has authority to change the assessment so certified, and the taxes shall be extended and collection made on the assessment so certified in like manner as extension and collection is made in case of property locally assessed.
1. 1. Having ascertained and fixed the taxable value of the tangible and intangible property used or held for use in the operation of each intercounty bus line, intercounty motor freight, airline, or water transportation company, as required by law, the Tax Division of the Arkansas Public Service Commission shall levy and extend against each valuation the average rate of ad valorem levy prevailing throughout this state for the assessment year, and then ten (10) days before the due date, the division shall certify the tax to the Secretary of the Department of Finance and Administration for collection.
  2. The secretary shall immediately forward by first-class mail a notice showing the assessed valuation, applicable rate of levy, the amount of tax charged, and the due date of the tax charged to each company against which a tax has been extended and so certified.
2. 1. If the taxes are not paid on or before the date on which ad valorem taxes or any part of ad valorem taxes on personal property become delinquent, the secretary shall add a penalty of ten percent (10%) and mail a statement of the tax and penalty to each person, company, or corporation so delinquent.
  2. 1. If the tax and penalty are not paid on or before the date on which a county collector may collect taxes by distraint, in lieu of the ten percent (10%) penalty, the secretary shall add to the tax a penalty of twenty-five percent (25%).
    2. The statement of tax and ten percent (10%) penalty from the secretary shall warn that if the tax and penalty are not paid within the time stated, in lieu of the ten percent (10%) penalty, a penalty of twenty-five percent (25%) will be added.
3. 1. For the purpose of collecting the taxes and penalties, in addition to the powers vested in the secretary for the collection of taxes, the secretary shall have all the powers vested in county collectors for the purpose of collecting delinquent personal property taxes.
  2. The secretary may petition the Arkansas Public Service Commission for revocation of the certificate or permit of authority issued to the delinquent company to operate in the State of Arkansas.
1. 1. Except as provided in subsections (c) and (d) of this section, all taxes and penalties collected under § 26-26-1614 shall be deposited into the State Treasury as trust fund income to the credit of the Ad Valorem Tax Fund.
  2. 1. The Treasurer of State shall annually transmit to the respective county treasurers of the several counties of this state the proportionate part of the Ad Valorem Tax Fund coming from the source that the improved state highway mileage in each county bears to the improved state highway mileage in all counties, the highway mileage figures to be furnished by the Arkansas Department of Transportation on request of the Treasurer of State.
    2. The respective county treasurers shall prorate the amount so received among the several county funds, school districts, and municipalities of the county in the same ratio that the taxes received from the millage levy by each bore to the total taxes from the millage levy received by all county funds, school districts, and municipalities, according to the local county collector's settlement for the particular assessment year.
2. 1. So long as any agency of this state shall have the function or be charged with the duty of making audits of the records and accounts of the officers and employees of counties, municipalities, or school districts or so long as any agency of this state shall have the function or be charged with the duty of assessing the property referred to in this subchapter or so long as any agency of this state shall have the function or be charged with the duty of furnishing guidance, instruction, and assistance to the county assessor in the performance of his or her duties, then the aggregate total amount expended by this state in the performance and carrying out of the functions and duties indicated shall be a proper charge against the taxes and penalties credited to the Ad Valorem Tax Fund under subsection (a) of this section.
  2. It shall be the duty of the Chief Fiscal Officer of the State to annually determine the amount of these costs and to certify to the Treasurer of State the amount that the aggregate of the taxes and penalties exceeds these costs in order that the excess may be transmitted to the respective county treasurers as provided in this section.
3. 1. The first one hundred thousand dollars ($100,000) collected in taxes and penalties under § 26-26-1614 during each fiscal year shall be deposited into the State Treasury as nonrevenue receipts credited to the State Central Services Fund for use by the Revenue Division of the Department of Finance and Administration.
  2. No funds collected pursuant to § 26-26-1614 shall be withheld by the state if those funds were collected under the authority of Arkansas Constitution, Article 14, § 3(b)(1).
4. When the taxes and penalties collected from water transportation companies under § 26-26-1614 are at least equal to two million five hundred thousand dollars ($2,500,000) for the calendar year, a portion of the revenues from the taxes and penalties shall be deposited as follows:
  1. 1. On October 1 of each year, fifty thousand dollars ($50,000) shall be credited to the Miscellaneous Agencies Fund Account to be used exclusively by the Arkansas Waterways Commission.
    2. If the taxes and penalties collected are not at least equal to two million five hundred thousand dollars ($2,500,000) by October 1 of any year, the fifty thousand dollars ($50,000) credited under subdivision (d)(1)(A) of this section shall not be credited to the Miscellaneous Agencies Fund Account until the last day of the month in which the taxes and penalties collected are at least equal to two million five hundred thousand dollars ($2,500,000) for the calendar year; and
  2. Any taxes and penalties collected in excess of two million five hundred fifty thousand dollars ($2,550,000) each calendar year shall be deposited as follows:
    1. Seventy percent (70%) shall be credited to the Arkansas River Navigation System Fund; and
    2. Thirty percent (30%) shall be credited to the Arkansas Port, Intermodal, and Waterway Development Grant Program Fund to be used exclusively for the purposes stated in § 15-23-205.
1. If any private car company shall fail or refuse to make and file the statement required by § 26-26-1702 within the time therein prescribed or shall fail or refuse to authorize in writing the use of the information and data submitted by the several railroads in determining its assessment, the Tax Division of the Arkansas Public Service Commission shall proceed to determine and fix the assessment of each car company on the basis of information reported to it by the several railroad companies and other information it may obtain. Each assessed valuation so determined shall be increased by ten percent (10%) as a penalty for failure to file its report, and taxes shall be extended and certified on the increased amount.
2. If any railroad shall fail or refuse to make and file the statement as required in § 26-26-1703, it shall forfeit to the state, as a penalty for the failure or refusal, the sum of five hundred dollars ($500). Any failure or refusal shall be certified by the division to the Attorney General, whose duty it shall be to institute such action as he or she may deem proper for the collection of any penalty.
1. The Tax Division of the Arkansas Public Service Commission, from the statements required by §§ 26-26-1702 and 26-26-1703 and other information it may obtain, shall ascertain and fix, as the basis for assessment, a uniform daily average travel of cars of each particular class and the valuation per car of each particular class and, accordingly, the number of cars required to make the total mileage traveled in this state within the year by the cars of each class of each private car company, and the assessed valuation of all cars of each car company.
2. When the basis for assessment is determined, written notice shall be forwarded by first-class mail to each car company having filed the report required in § 26-26-1702, and each company, if dissatisfied with the basis for assessment so fixed, may file written petition for review within ten (10) days from date of the notice.
1. The Tax Division of the Arkansas Public Service Commission, having ascertained and fixed the assessed valuation of the cars of each private car company as provided in § 26-26-1705, shall levy and extend against each valuation the average rate of ad valorem levy prevailing throughout the state for the respective assessment year, this rate to be determined as provided by § 26-26-1615, whereupon, the division, ten (10) days before due date, shall certify the tax so extended to the Secretary of the Department of Finance and Administration for collection.
2. The secretary shall immediately forward by first-class mail to each private car company against which a tax has been extended and so certified a notice showing the assessed valuation, the applicable rate of levy, the amount of tax charged, and the due date thereof.
3. 1. If the taxes are not paid on or before the date on which taxes, ad valorem, or any part thereof, on personal property become delinquent, the secretary shall add a penalty of ten percent (10%) and mail to each company so delinquent a statement of the tax and penalty.
  2. 1. If the tax and penalty are not paid on or before the date on which county collectors are authorized to collect taxes by distraint, the secretary shall, in lieu of the ten percent (10%) penalty, add to the tax a penalty of twenty-five percent (25%) and certify the tax and penalty to the Attorney General for collection.
    2. The secretary's statement of tax and ten percent (10%) penalty shall warn that if the tax and penalty are not paid within the time therein stated, in lieu of the ten percent (10%) penalty, a penalty of twenty-five percent (25%) will be added, and the tax and penalty shall be certified to the Attorney General for collection.
4. For the purpose of collecting these taxes and penalties, the secretary or the Attorney General, in addition to the powers in them vested for the collection of taxes, shall have all the powers vested in county collectors for the purpose of collecting delinquent personal property taxes.
1. 1. All taxes and penalties collected under the provisions of this subchapter shall be deposited into the State Treasury as trust fund income, to the credit of the Ad Valorem Tax Fund.
  2. 1. The Treasurer of State shall annually transmit to the respective county treasurers of the several counties of the state the proportionate part of the fund coming from the source that the assessed value of the single or first main track railroad mileage in his or her respective county bears to the assessed value of the single or first main track railroad mileage in all counties, the ratios to be furnished by the Tax Division of the Arkansas Public Service Commission on request of the Treasurer of State.
    2. The respective county treasurers shall allocate the amount so received among the several county funds and the school districts and municipalities of his or her county in which is located main track railroad mileage, in the ratio that millage taxes payable to each on the assessed value of single or first main track railroad mileage for the respective assessment year, when separately computed, bears to the total millage taxes payable to all such funds, districts, and municipalities from this source, when separately computed.
2. 1. So long as any agency of this state has the function or is charged with the duty of making audits of the records and accounts of the officers and employees of counties, municipalities, or school districts, or so long as any agency of this state has the function or is charged with the duty of assessing the property referred to in this subchapter, or so long as any agency of this state has the function or is charged with the duty of furnishing guidance, instruction, and assistance to the county assessor in the performance of his or her duties, then the aggregate total amount expended by this state in the performance and carrying out of the functions and duties indicated shall be a proper charge against the taxes and penalties credited to the fund under subsection (a) of this section.
  2. It shall be the duty of the Chief Fiscal Officer of the State to annually determine the amount of these costs and to certify to the Treasurer of State the amount that the aggregate of the taxes and penalties exceeds these costs in order that the excess may be transmitted to the respective county treasurers as provided in this section.
1. Except as provided in subsection (b) of this section, each county in the State of Arkansas shall be required to appraise all market value real estate normally assessed by the county assessor at its full and fair market value at a minimum of one (1) time every three (3) years.
2. 1. Except as provided in subdivision (b)(2) of this section, any county that has completed a reappraisal under subsection (a) of this section or completed a reappraisal between the years 2002 through 2004 shall not be required to commence or complete an additional reappraisal under the three-year cycle but shall be required to appraise all real property normally assessed by the county assessor at its full and fair market value at a minimum of one (1) time every five (5) years from the previous assessment.
  2. 1. If, as a result of a three-year reappraisal cycle, the new market value real estate assessment is greater than fifteen percent (15%) from the market value real estate assessment in the county in the year preceding the beginning of the reappraisal cycle, the county shall be required to complete its next reappraisal at a minimum of one (1) time every three (3) years from the previous assessment until the new market value real estate assessment is less than fifteen percent (15%) from the market value real estate assessment in the year preceding the beginning of the reappraisal cycle, at which point the county shall be placed into a five-year reappraisal cycle.
    2. If a county in a five-year reappraisal cycle has a new market value real estate assessment that is twenty-five percent (25%) greater than the market value real estate assessment in the county in the year preceding the beginning of the reappraisal cycle, the county shall be required to complete its next reappraisal at a minimum of one (1) time every three (3) years from the previous assessment until the new market value real estate assessment is less than fifteen percent (15%) from the market value real estate assessment in the year preceding the beginning of the reappraisal cycle, at which point the county shall be placed into a five-year reappraisal cycle.
    3. The market value real estate assessments shall be calculated by comparing the total values, unadjusted for the assessment increase limitations required under Arkansas Constitution, Amendment 79.
  3. 1. At the time that a county submits its market value real estate assessments to the Assessment Coordination Division, the county may appeal its new or continued placement into a three-year reappraisal cycle if the increased market value real estate assessment is a result of a single property improvement.
    2. 1. The division shall place a county in a five-year reappraisal cycle if the division concludes that the increase in the new real estate market value assessment is a result of a single property improvement in the county.
      2. This decision by the division shall be made within thirty (30) calendar days after receiving the appeal.
  4. Each county shall provide the division with the previous and new market value real estate assessments on or before October 1 of the year in which it is required to have completed reappraisal.
  5. This section does not affect the requirement that producing mineral interests be reappraised annually under § 26-26-1308.
3. 1. The county assessor or other official or officials designated by law shall compare the assessed value of each parcel under a reappraisal or reassessment that is completed in 1999 or later to the assessed value of the parcel for the previous year.
  2. In the first countywide reappraisal performed after January 1, 2001, by counties subject to Arkansas Constitution, Amendment 79, § 2:
    1. If the assessed value of the parcel increased, then the assessed value of the parcel for the year in which the parcel is reappraised or reassessed shall be adjusted by adding one-third (1/3) of the increase to the assessed value for the year prior to the reappraisal or reassessment; and
    2. An additional one-third (1/3) of the increase shall be added in each of the next two (2) years.
1. To carry out the provisions of this subchapter, the Assessment Coordination Division, as it deems necessary, appropriate, and consistent with the objectives of this subchapter, shall:
  1. Develop and implement rules relating to reappraisal procedures to be followed by counties, specifying annual objectives with respect to the discovery, listing, and valuation of real property for assessment purposes;
  2. 1. Develop and implement rules relating to training, experience, and testing requirements for determining whether a person is qualified to manage a reappraisal.
    2. Any division personnel responsible for approving reappraisal plans or property values resulting from those reappraisals shall be required to meet the same criteria; and
  3. 1. Enter into contracts with private entities for appraisal services on behalf of counties on such terms and conditions as the division deems are consistent with the provisions of this subchapter and are necessary and appropriate in its implementation.
    2. Section 19-11-101 et seq. shall not apply to a contract made under this subchapter and to the expenditure of funds from the Arkansas Real Property Reappraisal Fund.
2. 1. Each county shall follow the reappraisal procedures established by the division and file a reappraisal management plan with the division no later than November 1 of the year preceding the commencement of the reappraisal.
  2. The reappraisal management plan shall specify a proposed budget, personnel needs, and projected annual progress with respect to the discovery, listing, and valuation of property.
3. The division shall follow preestablished division rules to determine whether a reappraisal management plan is approved or rejected.
4. 1. The division shall establish training, experience, and testing requirements, and such other criteria as it deems necessary to determine whether a person is qualified to manage a reappraisal performed under this subchapter.
  2. The division shall not approve a reappraisal management plan that does not name a qualified manager.
5. 1. Employees of the county assessor may be used to reappraise the county and the county assessor or a designated employee may manage the reappraisal if the county assessor or the designated employee meets the qualifications established in this subchapter and the rules established under this subchapter.
  2. 1. If the initial reappraisal management plan required in subsection (b) of this section as submitted by the county assessor is rejected by the division, the county assessor shall be allowed to submit an alternate reappraisal management plan within thirty (30) days of the rejection of the initial reappraisal management plan.
    2. If the alternate reappraisal management plan is rejected by the division, the county shall employ and enter into a contract for professional services with a professional reappraisal company on behalf of all taxing units in the county as set forth in subsection (f) of this section.
6. 1. The county assessor may enter into a contract for professional services with a professional reappraisal company when both the proposed contract and the reappraisal management plan submitted by the contractor have been approved by the division.
  2. 1. If the initial reappraisal management plan submitted by the contractor is rejected by the division, the contractor shall be allowed to submit an alternate reappraisal management plan.
    2. If the second reappraisal management plan is rejected by the division, the division shall write a reappraisal management plan that the county shall employ and enter into a contract for professional services with a professional reappraisal company on behalf of all taxing units in the county.
  3. The reappraisal contract must be accompanied by an approved reappraisal management plan.
1. County assessors or those otherwise responsible for the valuation of real property for assessment purposes shall employ computer-assisted mass appraisal systems approved by the Assessment Coordination Division.
2. Information stored in the electronic database used in the computer-assisted mass appraisal system shall include, but not be limited to, pertinent physical characteristics and historical sales prices of each property in the county.
3. The division shall have access to view and obtain the data stored in each county's computer-assisted mass appraisal system via common-use technologies as determined by the division, including without limitation:
  1. The internet;
  2. Network technologies;
  3. Phone line and modem technologies;
  4. Compact disk technologies;
  5. Magnetic tape technologies; or
  6. Other similar common-use technologies.
1. 1. There is created a fund to be known as the “Arkansas Real Property Reappraisal Fund”.
  2. The proceeds of the fund shall be used to pay counties and professional reappraisal companies for the reappraisal of real property required by this subchapter and shall be in lieu of real property reappraisal funding by the local taxing units in each county of this state.
2. For cause and after an opportunity for a hearing, the Director of the Assessment Coordination Division may suspend or terminate the contract of any appraisal firm or county.
3. 1. The fund proceeds shall be distributed monthly, except when there is a determination by the division that proper reappraisal procedures established by the division are not being followed.
  2. 1. 1. Upon a finding by the division that proper reappraisal procedures are not being followed, the county assessor or contractor shall be notified that the reappraisal is out of compliance with accepted guidelines as established in this subchapter and rules enacted pursuant to this subchapter.
      2. The division shall notify the county assessor or contractor in writing that the county assessor or contractor has thirty (30) days in which to bring the reappraisal into compliance.
    2. If there is a further finding that proper reappraisal procedures are not being followed, the contract shall be promptly terminated and the division shall negotiate another contract and reappraisal management plan for the completion of the reappraisal project.
4. Based on its expertise and the criteria and requirements set forth in this subchapter, the division shall establish by rule the findings that indicate proper reappraisal procedures are not being followed.
5. At the end of each countywide reappraisal, the division shall issue a report of the status of the county.
6. Reappraisal funding under this section may be withheld and forfeited under § 26-80-101(b)(4)(A).
1. The Arkansas Public Service Commission shall constitute the State Equalization Board and shall equalize the assessment of property throughout the state.
2. For this purpose, in addition to the powers and duties conferred on the commission, it shall have power to equalize the assessment of all property in this state between districts, cities, and townships of the same county, between the different counties of this state, and of the property assessed by the commission in the first instance.
1. The Arkansas Public Service Commission shall meet as the State Equalization Board on the first Monday in October of each year for the purpose of equalizing the taxable valuation of all real or personal property.
2. The board shall:
  1. Examine and compare the returns of the assessment of property in the counties of this state;
  2. Summon and hear witnesses and make or cause to be made investigation relative thereto; and
  3. Proceed to equalize the property, so that all the taxable property throughout this state shall be assessed uniformly at its true and full market or actual value, or at such percentage as has been duly certified by the commission.
1. A record of the proceedings of the State Equalization Board shall be kept by the secretary thereof.
2. 1. A certified copy of the record or such part thereof as affects his or her county shall, on or before the third Monday in November, be furnished the county clerk of each county in which property, the assessed valuation of which has been ordered by the board increased or reduced, is situated.
  2. In carrying out the order of the board, the county clerk shall add to or deduct from the valuation of any property, as adjusted by the local assessment and equalization officials, such percentage or amount as the board might so order and shall enter the adjusted or equalized valuation in the proper record and extend taxes thereon.
1. There is created a county equalization board in each county of this state to be selected in the manner provided by §§ 26-27-302 — 26-27-305.
2. The county equalization boards shall have all the powers and authority, and perform all of the duties which are conferred by law on the boards in this state.
1. The county equalization board of each county shall consist of five (5) members.
2. However, in counties having a population in excess of seventy-nine thousand (79,000) persons, according to the most recent federal decennial census, the county equalization board may consist of nine (9) members.
1. 1. When the county equalization board consists of five (5) members:
    1. One (1) member shall be selected by the representatives of the several school districts in the county;
    2. One (1) member shall be selected by the representatives of all cities and incorporated towns in the county;
    3. One (1) member shall be appointed by the county judge; and
    4. Two (2) members shall be appointed by a majority vote of the county quorum court in the following manner:
      1. The county quorum court shall appoint a licensed real estate appraiser to at least one (1) of these two (2) positions, but if a licensed real estate appraiser is not available or willing to serve, the county quorum court may appoint a licensed real estate broker;
      2. If a licensed real estate broker is not available or willing to serve, the county quorum court may appoint a licensed real estate salesperson; and
      3. If a licensed real estate salesperson is not available or willing to serve, the county quorum court may appoint any qualified elector of the county.
    5. The five (5) members shall be selected from different sections of the county.
  2. When the county equalization board consists of nine (9) members:
    1. Two (2) members shall be selected by the representatives of the several school districts in the county;
    2. Two (2) members shall be selected by the representatives of all cities and incorporated towns in the county;
    3. Two (2) members shall be appointed by the county judge; and
    4. Three (3) members shall be appointed by a majority vote of the county quorum court in the following manner:
      1. The county quorum court shall appoint a licensed real estate appraiser to at least one (1) of these three (3) positions, but if a licensed real estate appraiser is not available or willing to serve, the county quorum court may appoint a licensed real estate broker;
      2. If a licensed real estate broker is not available or willing to serve, the county quorum court may appoint a licensed real estate salesperson; and
      3. If a licensed real estate salesperson is not available or willing to serve, the county quorum court may appoint any qualified elector of the county.
    5. The selecting or appointing agency in each instance shall select or appoint the members from different sections of the county.
2. 1. 1. 1. For the purpose of making the selection of its members of the county equalization board as provided in this section, the school district's superintendent or designee of each school district in each county shall serve as the representative of his or her respective school district.
      2. The representatives of the several school districts of each county shall hold a meeting during the month of May of each year in which the term of any of their members of the county equalization board shall expire.
    2. The county judge shall serve as chair of the meeting and shall issue the call for the meeting, which shall specify the time, date, and place of the meeting.
    3. 1. The selection of members of the county equalization board shall be by majority vote of the school board representatives present, and no action shall be taken unless there is a quorum present.
      2. A majority of all of the school board representatives in the county shall constitute a quorum.
  2. 1. 1. For the purpose of making the selection of their members of the county equalization board, the representatives of the cities and incorporated towns in the county shall hold a meeting during the month of May of each year in which the term of any of their members of the county equalization board shall expire.
      2. The mayor of the city or town or his or her designee shall serve as the representative of his or her city or town.
    2. The mayor or his or her designee of the county seat city or town or, if there are two (2) county seats, the mayor or his or her designee of the larger county seat city or town shall serve as chair of the meeting and shall issue the call, which shall specify the time, date, and place of the meeting.
    3. 1. The selection of members of the county equalization board shall be by majority vote of the representatives of the cities and towns present, and no action shall be taken unless there is a quorum present.
      2. A majority of all of the representatives of all cities and incorporated towns in the county shall constitute a quorum.
      3. Each of the cities and incorporated towns within the county shall be entitled to one (1) vote.
  3. The county judge and the county quorum court of each county shall make the appointment of their members of the county equalization board during the month of May of each year in which the term of any of their members of the county equalization board shall expire.
1. The terms of office of the members of the county equalization boards shall be staggered as follows:
  1. 1. In those counties having a county equalization board composed of five (5) members, the members shall serve three-year staggered terms of office, with each expiring term to expire on the first Monday of June of each year, or until his or her successor is selected or appointed and qualified.
    2. However, on the first Monday in July, 1999, the terms of the present members of each county equalization board with three (3) or five (5) members shall expire and new members shall be appointed as is provided by law, and within thirty (30) days thereafter, the five (5) new members shall meet and determine by lot their respective staggered terms in such a manner that one (1) member's term should expire one (1) year thereafter, two (2) members' terms should expire two (2) years thereafter, and two (2) members' terms should expire three (3) years thereafter; and
  2. 1. In those counties having a county equalization board composed of nine (9) members, the members shall serve three-year staggered terms of office, with each expiring term to expire on the first Monday of June of each year, or until his or her successor is selected or appointed and qualified.
    2. However, on the first Monday in July, 1999, the terms of the present members of each county equalization board with nine (9) members shall expire and new members shall be appointed as is provided by law, and within thirty (30) days thereafter, the new members shall meet and determine by lot their respective staggered terms in such a manner that the terms of three (3) members each should expire one (1), two (2), and three (3) years, respectively, thereafter.
2. 1. Upon the expiration of a member's term under the provisions of this section, the successor member shall be appointed or selected for a three-year term or until his or her successor is selected or appointed and qualified.
  2. Upon the expiration of the term of any member of any county equalization board or upon the vacancy of a membership of any county equalization board, the member to fill the vacancy shall be selected by the same group, either the directors of the several districts of the county, the members of the city and town councils of the cities and incorporated towns in the county, the county judge, or the county quorum court that made the selection of the member whose term has expired or has been vacated.
1. Each member of a county equalization board, before entering upon the discharge of his or her duties, shall take the oath of office prescribed in Arkansas Constitution, Article 19, § 20, and further, that he or she will fearlessly, impartially, and faithfully equalize the assessed value of all property assessed and subject to taxation.
2. The oath shall be subscribed and sworn to by each member of the county equalization board before the county clerk, and the county clerk shall make it a matter of record in his or her office.
1. The county clerk or his or her designee shall serve as secretary of the county equalization board of his or her county and shall keep a complete and accurate journal of its proceedings and perform such other duties as may be by law required by the county equalization board.
2. In addition, within ten (10) days after the appointment of the county equalization board for the county clerk's county, the county clerk or his or her designee shall file from time to time with the Assessment Coordination Division a statement showing the name and address of each member of the county equalization board.
3. When any change in the personnel of the county equalization board is made, the county clerk shall immediately so advise the Arkansas Public Service Commission.
1. The members of the county equalization board and the secretary thereof of the counties of this state shall receive for their services an amount to be fixed by the county quorum court of the county.
2. All compensation, together with expenses necessarily incurred by reason of official action of the county equalization board, shall be audited and paid by the county as other claims against the county are audited and paid.
1. 1. The county equalization board shall meet on August 1 of each year at the office of either the county clerk or the office of the county assessor.
  2. However, if August 1 falls on a Saturday, a Sunday, or a legal holiday, the meeting shall be held on the next business day which is not a Saturday, a Sunday, or a legal holiday.
2. At the first meeting of the county equalization board, it shall organize by electing one (1) of its members as chair who, in addition to all other powers and duties conferred in this subchapter, shall have the power to administer oaths to witnesses appearing before the county equalization board.
3. 1. In addition, the county equalization board shall exercise its functions as a board of equalization to equalize the assessed value of all acreage lands, city and town lots, other real property, and personal property subject to local assessment, regardless of the year in which the property was last assessed by the local county assessor.
  2. 1. Beginning August 1 of each year and continuing through October 1, the county equalization board shall meet as often as is necessary to consider the equalization of all property assessments and all requests for adjustments of assessments by taxpayers.
    2. 1. However, in a county where the assessed value of real and personal property has been found by the Assessment Coordination Division to be below the percentage of the true or fair market value as required by law, the meetings of the county equalization board shall continue until all property assessments are equalized and all requests for adjustments of assessments by taxpayers are considered.
      2. However, the meetings shall not run later than the third Monday in November of each year.
4. A majority of the members of the county equalization board shall constitute a quorum for the transaction of business.
1. 1. 1. On petition of the county judge or the county quorum court or on the county equalization board's own motion at any time after adjournment of its regular monthly meeting or after its equalization meetings from August 1 each year through October 1 and before the third Monday in November of each year, the county equalization board of any county shall convene in special session for the purposes of:
    2. 1. For these purposes, the county equalization board shall be vested and charged with all the powers and duties with which the county equalization board is vested and charged when meeting in regular session.
      2. In addition, the county equalization board may employ qualified appraisers, abstractors, or other persons needed to appraise properties which the county equalization board may need in the discharge of its duties.
  2. The petition to the county equalization board shall specify the date on which the county equalization board shall convene, and the county equalization board may thereafter exercise its functions but not later than the third Monday in November next following.
2. 1. An appeal from the action of the county equalization board when in special session shall be to the county court in the manner as provided by law.
  2. Any appeal shall be filed within ten (10) days from date of notice of action by the county equalization board and shall be heard and order made by the county court not later than forty-five (45) days prior to the date on which the tax books for the year are required to be delivered to the county collector.
3. 1. The expense of any special session of the county equalization board including the expense for employment of appraisers, abstractors, and other persons needed shall be allowed and paid from the general fund of the county.
  2. 1. The general fund of the county shall be reimbursed by transfer to it from the funds of the respective taxing units of the county.
    2. The amount to be contributed by each taxing unit shall be in the proportion that the total of the ad valorem taxes collected for the benefit of each taxing unit bears to the total of the ad valorem taxes collected for the benefit of all taxing units during collection period next following the special session.
1. 1. The county equalization board, on petition of the county judge or on its own motion, shall, at any time, convene in special session for the purpose of planning its work of equalization of property assessments.
  2. For this purpose only, the county equalization board shall be vested and charged with all the powers and duties with which the county equalization board is vested and charged when meeting in regular session. In addition, the county equalization board shall be empowered to employ qualified appraisers, abstractors, or other persons needed to appraise properties, which appraisal the county equalization board may need in the discharge of its duties.
2. 1. The expense of any special session of the county equalization board, including the expense for employment of appraisers, abstractors, and other persons needed shall be allowed and paid from the general fund of the county.
  2. The general fund of the county shall be reimbursed by transfer to it from the funds of the respective taxing units of the county, and the amount to be contributed by each taxing unit shall be in the proportion that the total of the ad valorem taxes collected for the benefit of each taxing unit bears to the total of the ad valorem taxes collected for the benefit of all taxing units during the collection period next following the special session.
1. Immediately after the county assessor files his or her report of the assessment of real and personal property in the office of the county clerk as required by law, the county clerk shall present the report of the assessment to the county equalization board, and the county equalization board shall proceed to equalize the assessed valuation of the properties.
2. For this purpose, the county equalization board shall observe the following rules:
  1. 1. It shall raise or lower the valuation of any property to bring about a complete equalization of property at the proper value under § 26-26-407 or § 26-26-1202 or in accordance with a value otherwise prescribed by law.
    2. It shall not raise or lower the valuation of any property without documenting the reason for raising or lowering the valuation of the property to achieve the proper value under § 26-26-407 or § 26-26-1202 or in accordance with a value otherwise prescribed by law, and the documentation shall be attached to the appropriate property record card or cards.
    3. 1. It shall not raise or lower the value of any property without reviewing values of similarly situated properties.
      2. If the same reason for raising or lowering the value of the property exists for those similarly situated properties, the values for those properties shall also be raised or lowered, and the changes shall be documented.
    4. It shall not materially change the records of the county assessor's office, but may only direct that the assessed value of property be raised or lowered in keeping with its documented findings;
  2. 1. In each instance in which the county equalization board shall raise the valuation of any property, it shall immediately notify the owner or his or her agent by first class mail of the increase.
    2. However, all persons present before the county equalization board in person or by agent at the time the increase is ordered are there so notified and shall not be entitled to further notice.
    3. The notice shall state the valuation returned by the county assessor and the valuation fixed by the county equalization board and shall advise the owner or his or her agent that he or she may in person, by agent, petition, or letter apply for and receive consideration or hearing by or before the county equalization board if the application shall be made on or before the first Saturday next preceding the third Monday in September if in regular session for equalization or before the first Saturday next preceding the third Monday of November if meeting in special sessions; and
  3. In each instance in which an assessment is raised and the owner or his or her agent has applied for consideration or hearing for an adjustment of his or her assessment, if the county equalization board has failed to take action on his or her application before adjourning its regular session or if it fails to convene in special session to consider the application, then the county equalization board shall reduce all such increases to the assessed levels of the previous year.
1. The county equalization board, or any member thereof, shall have free access to the records of the office of the county clerk and of the office of the circuit clerk and ex officio county recorder of the county.
2. 1. The county equalization board or any member may enter upon and view property, and may require witnesses to appear before the county equalization board and testify regarding the location, amount, kind, and value of any or all items of any class or character of property in the county.
  2. The secretary of the county equalization board, in vacation or in session, at the direction of the county equalization board or any member thereof, shall summon witnesses for examination by the county equalization board.
1. 1. A property owner or an agent of a property owner may apply in person, by petition, or by letter to the secretary of the county equalization board on or before the third Monday in August of each year for the adjustment of the county assessor's assessment on the property owner's property or the property of another person.
  2. The county equalization board may not adjust any assessment other than the assessment made during the year it meets to consider an application made under subdivision (a)(1) of this section.
  3. The county equalization board does not have jurisdiction over and shall not accept or consider a petition or letter under subdivision (a)(1) of this section for the adjustment of the:
    1. County assessor's determination of a property's tax-exempt status under Arkansas Constitution, Article 16, § 5(b);
    2. Valuation of agricultural land, pasture land, or timberland derived by the guidelines and methods set forth by the Assessment Coordination Division under § 26-26-407; or
    3. Valuation of producing mineral rights in accordance with the directions and methods established by the division under § 26-26-1110.
2. 1. A property owner or an agent of the property owner may personally appear before the county equalization board or pursue the appeal by supplying written documentation as to the adjustment desired.
  2. The property owner or an agent of the property owner shall notify the secretary of the county equalization board, who shall schedule a hearing, and, if practicable, the hearing shall be held at the convenience of the property owner.
3. 1. The county equalization board shall begin hearing appeals no later than the second Monday in August.
  2. On at least one (1) day each week, appeals shall be heard after normal business hours to accommodate working property owners.
4. 1. 1. At a hearing before a county equalization board, the county assessor shall first present to the county equalization board any evidence that the county assessor's office or a contracted appraisal company considered when determining the valuation of the property that is the subject of the hearing.
    2. After the county assessor has presented the evidence as required in subdivision (d)(1)(A) of this section, the appealing property owner or his or her agent shall present to the county equalization board any evidence that supports a valuation of the property that is different from the valuation set by the county assessor.
    3. 1. After the appealing property owner or his or her agent presents evidence under subdivision (d)(1)(B) of this section, the county assessor shall have the opportunity to rebut the evidence presented by the appealing property owner or his or her agent in the proceeding.
      2. If the appealing property owner presents material evidence that has not been provided to the county assessor at least five (5) business days before the hearing, the county equalization board may continue the hearing to a future date in order for the county assessor to review and prepare a response, including without limitation additional evidence.
    4. 1. For protests and appeals of commercial and industrial property, operating as such at the time of assessment, any party that intends to offer into evidence a sale or lease transaction as evidence of the value of the property that is the subject of the protest or appeal before the county equalization board shall have an affirmative duty to disclose both of the following at least five (5) days prior to the hearing:
        
        Whether the proposed comparable property was occupied or unoccupied at the time of the transaction; and
        
        Whether the proposed comparable property was subject to any use, deed, or lease restriction at the time of the transaction that prohibits the property on which a building or structure sits from being used for the purpose for which the building or structure was designed, constructed, altered, renovated, or modified.
      2. The purpose of the disclosure is so that the county equalization board can determine whether the proposed comparable property is similarly situated to the subject property on appeal.
        
        If the information required under this section is not disclosed as required under this section, the county assessor shall advise the county equalization board that the failure to disclose the information should be considered a material omission affecting the weight of the evidence.
    5. After the evidence has been presented by both parties under this subsection, the county equalization board shall consider all evidence presented at the hearing and make a determination based on evidence presented by the parties to either accept the valuation of the subject property set by the county assessor or raise or lower the valuation of the subject property.
    6. 1. Except as necessary during other hearings of the county equalization board for the purpose of comparison or equalization, or both, ex parte communications between members of the county equalization board or between a member of the county equalization board and other persons concerning property on appeal before the county equalization board are prohibited.
      2. However, members of the county equalization board may communicate with the attorneys for the county equalization board and with the secretary for the county equalization board for purposes of scheduling.
5. 1. The county equalization board shall decide the merits of an adjustment of assessment application and notify the property owner of its decision in writing at least ten (10) business days after the hearing.
  2. The county equalization board's notification shall include:
    1. The county equalization board's decision;
    2. The right of the property owner to appeal the county equalization board's decision to the county court;
    3. The deadline for petitioning the county court for a hearing; and
    4. A statement that a petition filed in county court for a hearing on behalf of a corporation, limited liability company, or other business entity shall be signed and filed by an attorney licensed to practice law in Arkansas.
1. 1. 1. The county assessor or a property owner who is aggrieved at the action of a county equalization board may appeal from the action of the county equalization board to the county court by filing a petition of appeal with the county clerk, who shall assign a case number to the appeal.
    2. The county clerk shall not charge a fee for filing an appeal under subdivision (a)(1)(A) of this section.
  2. The county clerk shall summon the members of the county equalization board and issue such process as the county assessor, the county equalization board, or the county judge may request for witnesses and evidence of the amount and value of the property.
2. No appeal to the county court shall be taken unless the petitioner:
  1. Has exhausted his or her remedy before the county equalization board; or
  2. Was not sent the notice of value change as required by § 26-23-203.
3. 1. An appeal must be filed on or before the second Monday in October of each year and shall have preference over all matters before the county court and shall be heard and an order made on or before the fifteenth day of November.
  2. 1. The county court shall notify in writing the property owner or county assessor of its decision no later than twenty (20) working days after the property owner's appeal hearing.
    2. The notification shall state the county court's decision and that the property owner may appeal the decision to the circuit court.
4. 1. On an appeal from the action of the county equalization board or a subsequent court order affecting the valuation of the property, the petitioner or plaintiff shall have the burden of proving by a preponderance of the evidence the true and correct value of the property for ad valorem tax purposes as prescribed by law.
  2. A presumption of correctness or weight of authority does not attach to the action of the county assessor or the county equalization board, and the petitioner or plaintiff is not required to:
    1. Show that the assessed valuation of property is clearly erroneous, manifestly excessive, or confiscatory; or
    2. Meet a higher standard of proof than preponderance of the evidence.
  3. 1. For protests and appeals of commercial and industrial property, operating as such at the time of assessment, any party that intends to offer into evidence a sale or lease transaction as evidence of the value of the property that is the subject of the protest or appeal before the court shall have an affirmative duty to disclose both of the following at least five (5) days prior to the hearing:
      1. Whether the proposed comparable property was occupied or unoccupied at the time of the transaction; and
      2. Whether the proposed comparable property was subject to any use, deed, or lease restriction at the time of the transaction that prohibits the property, on which a building or structure sits from being used for the purpose for which the building or structure was designed constructed, altered, renovated, or modified.
    2. The purpose of the disclosure is so that the court can determine whether the proposed comparable property is similarly situated to the subject property on appeal.
    3. 1. The court shall consider all evidence when determining whether comparable properties are similarly situated to the subject property.
      2. Nothing in this section is meant to restrict a court's consideration of whether a proposed comparable property is similarly situated to the subject property.
5. Upon an appeal, any property owner in the county may appear and be heard in support of or in opposition to the appeal.
6. 1. 1. The county court shall acquire no jurisdiction to hear the appeal unless the county clerk shall have first given notice of the appeal by publication:
    2. The notice shall state:
      1. The name of the parties taking the appeal;
      2. The assessment complained of, together with a definite description of the property so assessed;
      3. The name of the supposed property owner;
      4. The time and place fixed for the hearing of the appeal; and
      5. That any property owner in the county may appear at the hearing of the appeal and be heard in support of or in opposition to the appeal.
  2. The notice of appeal may be in the following form:
7. It shall be the duty of the prosecuting attorney or his or her deputy, when called upon by the county assessor, a member of the county equalization board, or the county court, to represent the county and the state in the prosecution of all appeals before the county courts and the circuit courts.
1. Each county equalization board, immediately on the completion of its work of equalization and before final adjournment, shall adopt a resolution wherein it shall be stated the percentage of true market or actual value at which it has equalized the assessed values of the property of the county under its jurisdiction for the year.
2. 1. The resolution shall be signed by a majority of the members of the county equalization board.
  2. A copy of the resolution, together with an abstract of the adjusted assessment by total of items and value, shall be forwarded to the Assessment Coordination Division no later than thirty (30) days after final adjournment of the county equalization board.
1. It is the duty of the county clerk of each county to enter upon the assessment record of his or her county the adjusted or equalized assessed value of any and all property as found and fixed by the county equalization board.
2. In making the tax books of the county, unless further adjustments are ordered by the county court or the State Equalization Board, the county clerk shall extend the taxes on the adjusted or equalized values.
1. The county clerk of each county shall, on or before the second Monday in November of each year, unless otherwise ordered and directed by the State Equalization Board, file with the State Equalization Board, on such forms as it may prescribe, a “final abstract of the tax books”.
2. The abstract shall show, by total of items and value, the total assessment of his or her county after all adjustments as may be ordered by the county equalization board and the county court have been made.
1. The purpose of this section is to:
  1. Set out the procedure for a county equalization board to follow when changing real property values in a year when a county is not completing reappraisal; and
  2. Require the county equalization board to consult with the Assessment Coordination Division to utilize data compiled under the division's sales ratio study.
2. If in the judgment of the county equalization board or the county judge based upon current economic conditions a number of real estate parcels in a county may have decreased in market value since the last countywide reappraisal, then the county equalization board may by its motion or the county judge may petition for the county equalization board to enter into a special session to determine what action is needed under this section to address the decrease in market value.
3. The county equalization board shall not take action as proposed in the special session under subsection (b) of this section until the county equalization board has:
  1. Consulted the county assessor on the proposed action in the special session;
  2. Consulted the division on the proposed action in the special session; and
  3. Analyzed the current real estate market in the county.
4. The county equalization board may employ a professional appraisal manager to analyze the current real estate market in the county to fulfill its obligation under subdivision (c)(3) of this section.
5. If the county equalization board determines in the special session that action is needed under this section, the county equalization board shall adjust market values of real estate in the county under the methodology established by the rules of the division.
6. The division shall promulgate rules to:
  1. Set out the procedure for a county equalization board to make a determination whether action is needed under this section; and
  2. Establish the methodology to be used when adjusting the market values of real property.
7. If the county equalization board fails to follow the methodology to adjust real estate values as set out in the division's rules, the county equalization board shall be subject to withholding of funds from the Arkansas Real Property Reappraisal Fund under § 26-26-1907.
8. A special session convened under this section is subject to the procedures for a special session of the county equalization board under § 26-27-312.
1. In addition to its other duties, a county equalization board shall hear appeals under § 14-126-103.
2. The county equalization board shall meet as necessary to hear appeals under § 14-126-103.
1. 1. Beginning January 1, 2018, the Director of the Assessment Coordination Division shall:
    1. Approve curricula and provide materials for use in training and educating members of county equalization boards;
    2. Supervise a comprehensive course for training and education of members of county equalization boards and issue certificates indicating course completion;
    3. Make all materials for use in training and educating members of county equalization boards freely available online; and
    4. Provide staff to respond to technical questions relating to the duties and responsibilities of members of county equalization boards and property appraisal issues.
  2. The director may contract with one (1) or more service providers to assist with the requirements of this subsection.
2. The curricula and materials for the comprehensive course established under this section shall include without limitation information regarding the:
  1. Cost, income, and market data comparison methods of property appraisal;
  2. Appraisal of business personal property;
  3. Duties of the county assessor;
  4. Duties of a county equalization board, including without limitation the independence of a county equalization board from the county assessor and other employees and contractors of the county assessor;
  5. Prohibition against ex parte communications applicable to members of a county equalization board;
  6. Requirements regarding equal and uniform appraisal of property; and
  7. Right of a property owner to protest the appraised value of the property and the procedures for an appeal.
3. 1. Except as otherwise provided in this subsection, each member of a county equalization board shall complete the comprehensive course established under subsection (a) of this section.
  2. 1. A member of a county equalization board who is required to attend the comprehensive course shall not participate in a county equalization board hearing unless the member of the county equalization board has been certified as completing the comprehensive course established under subsection (a) of this section.
    2. A member of a county equalization board who is appointed after the date the comprehensive course established under subsection (a) of this section is offered for that year may serve without certification until the next comprehensive course established under subsection (a) of this section is offered.
  3. 1. Until January 1, 2021, no more than one-third (1/3) of the members of a county equalization board, as designated by the chair of the county equalization board serving on January 1 of each year or, if no chair is serving on January 1, then by the county judge, shall be required to attend the comprehensive course established under subsection (a) of this section in a single year.
    2. The director may waive the requirements of this subsection for:
      1. Appraisers who are registered, licensed, or certified to perform appraisals in Arkansas; and
      2. Attorneys licensed to practice law in Arkansas.
4. 1. For purposes of continuing education, a member of a county equalization board shall obtain certification of completion of the comprehensive course established in subsection (a) of this section every three (3) years.
  2. If a member of a county equalization board does not become recertified under subdivision (d)(1) of this section three (3) years after his or her previous certification of the course, the member of a county equalization board shall not participate in a hearing before the county equalization board until the member is recertified.
1. The Director of the Assessment Coordination Division shall establish uniform hearing procedures for county equalization boards, which shall include without limitation information regarding:
  1. The notice required for a hearing;
  2. Conducting a hearing;
  3. Scheduling, rescheduling, and canceling a hearing;
  4. The right of the county assessor and property owner to offer evidence and testimony and examine and cross-examine witnesses at a hearing;
  5. A property owner's right to appear by an agent at a hearing;
  6. The prohibitions against ex parte communications and a county equalization board's consideration of information not provided at a hearing; and
  7. Conflicts of interest.
2. 1. A county equalization board shall adopt at its first meeting of each year and shall follow the uniform hearing procedures established by the director under this section.
  2. Upon request, the secretary of a county equalization board shall provide an owner of property in the county with a copy of the uniform hearing procedures that have been adopted by the county equalization board for that year's hearings.
  3. A copy of the uniform hearing procedures adopted by a county equalization board shall be conspicuously posted in a prominent place in the room in which the county equalization board hearings are held.
3. 1. At the first meeting of a county equalization board each year, each member of the county equalization board shall sign an affidavit stating that the member of the county equalization board will not knowingly violate any law or procedure regarding the conducting of county equalization board hearings.
  2. If a member of a county equalization board violates a law or procedure regarding the conducting of county equalization board hearings before or during a hearing, the member of the county equalization board shall recuse himself or herself from further participation in that hearing.
  3. 1. If a member of a county equalization board recuses himself or herself from a hearing under subdivision (c)(2) of this section or otherwise, the county judge shall appoint an interim member of the county equalization board to serve for the duration of that hearing.
    2. An interim member of a county equalization board appointed under this subdivision (c)(3) shall not be subject to the education and training requirements stated in § 26-27-324.
1. 1. If a county by appropriate action elects to acquire, lease, rent, or otherwise provide for the use of electronic data processing equipment, commonly referred to as a computer, to keep the assessment records, to prepare the tax books, to prepare the tax settlements, and to prepare the county collector's records and receipts for property taxes, the county quorum court by ordinance may designate one (1) or more appropriate county officers to be responsible for the maintenance and operation of the computer, the keeping of the assessment records, the preparation of the tax books, the preparation of the county collector's records and receipts for property taxes, and the preparation of the tax settlements.
  2. 1. If any county officer other than the county clerk is designated to prepare the tax books or tax settlements, that county officer shall be reimbursed in the manner provided by law.
    2. If the county assessor is designated as the county officer to keep the assessment records, prepare the tax books, and prepare the county collector's receipts by use of electronic data processing equipment, the cost shall be prorated among the respective taxing units in the same manner as is provided by law for defraying the cost of operating the county assessor's office.
2. When any county acquires, leases, rents, or otherwise provides for the use of electronic data processing equipment for the purposes prescribed in subsection (a) of this section, the county quorum court may, by ordinance, authorize the use of the equipment for any other appropriate county purposes and may provide for prorating the costs thereof among the various county offices.
1. It shall be the duty of the preparer of tax books to add each tax book delivered to the county collector, making the separate columns of values when added together amount to the sum of the column of total values when added up and, at the end of the tax book, recapitulate the additions of each page, so as to make it prove itself to be correct.
2. A copy of the recapitulation under this section shall be a part of the tax books.
1. In all cases in which any preparer of the tax books shall omit, by inadvertence or mistake, in any year to enter on the books of his or her county any lands or lots or parts of lots situated in his or her county subject to taxation, it shall be his or her duty to enter them on the tax books of the next succeeding year and to add to the taxes of the current year the simple taxes of each and every preceding year in which the lands or lots so escaped taxation.
2. There shall be separate recapitulation of those lands and lots.
1. 1. The preparer of the tax books shall mark opposite every tract, town lot, or city lot that may have been forfeited to the state for the nonpayment of taxes the word “forfeited”.
  2. 1. On that tract, town lot, or city lot there shall not be charged any taxes unless the Commissioner of State Lands shall officially advise the preparer that it has become subject to taxation.
    2. In that event, the same taxes shall be charged and collected on the tract, town lot, or city lot as may be allowed by law.
2. The county assessor shall assess all the lands or lots, or parts of lands or lots, that may appear on the plats or lists furnished to the county assessor.
3. If any county clerk shall have lost or if the records of his or her office shall not contain a list of the lands forfeited to the state within his or her county, the county clerk shall certify that fact to the Commissioner of State Lands, and the Commissioner of State Lands shall immediately furnish the county clerk with that list.
1. On or before February 1 of each year, the preparer of tax books of each county shall make out and deliver the tax books of his or her county to the county collector with the preparer of tax books' warrant attached, under his or her hand and the seal of his or her office, authorizing the county collector to collect the taxes.
2. The county collector shall give a receipt for the tax books, in which the amount of the different taxes shall be separately stated, and the county clerk shall file the receipt in the records of the county.
1. When, after the tax books have been delivered to the county collector, it is ascertained that there is an error in the real or personal property tax books, the error shall be corrected in the following manner:
  1. 1. When the county assessor discovers an error in the real property tax books or any error is brought to the attention of the county assessor by any person, the county assessor shall cause the error to be corrected by completing the following prenumbered form in triplicate, indicating thereon the correction to be made:
    2. Upon completing and signing the above real property tax correction form in triplicate, the county assessor shall retain the original in the county assessor's records and shall transmit two (2) copies to the county collector. The county collector shall sign the two (2) copies received from the county assessor, shall retain one (1) copy in the county collector's records, and shall transmit the remaining copy to the county clerk, who shall sign it and file it in the records of the county clerk.
  2. 1. When the county assessor discovers an error in the personal property tax books or any error is brought to the attention of the county assessor, he or she shall cause the error to be corrected by completing the following prenumbered form in triplicate, indicating thereon the correction to be made:
    2. Upon completing and signing the above personal property tax correction form in triplicate, the county assessor shall retain the original in the county assessor's records and shall transmit two (2) copies to the county collector. The county collector shall sign the two (2) copies received from the county assessor, shall retain one (1) copy in the county collector's records, and shall transmit the remaining copy to the county clerk who shall sign it and file it in the records of the county clerk.
2. The real property tax correction forms and the personal property tax correction forms required by this section to be kept in the records of the county assessor, county collector, and county clerk may be destroyed upon the expiration of one (1) year after the date on which the Legislative Joint Auditing Committee accepts and files the audit of the particular office performed by Arkansas Legislative Audit.
3. 1. This section applies only to the correction of extension errors, erroneous property descriptions, classifications, or listings.
  2. 1. A correction shall be made under this section regardless of whether the error was caused by the county assessor or the taxpayer or was the result of an erroneous record or report or other circumstance.
    2. However, a correction under this section shall not be utilized to make any change in the valuation of real or personal property as shown on the tax books and related records other than a change in valuation necessitated by the correction of factual errors as provided in this section.
  3. A reduction in the valuation of real or personal property shall not be made, except such as shall have been ordered by the county equalization board, the county court, the circuit court, or the Supreme Court, or be caused by the correction of actual and obvious errors as provided in this section.
4. When the county assessor discovers or is informed of an error described in subsection (c) of this section in the real or personal property tax books before the tax books have been delivered to the county collector, the county assessor shall correct the error directly on the tax books and shall maintain a record of the correction in the county assessor's records.
1. This section applies to a tax or fee on the county tax books that is levied by any entity that:
  1. Is not on the county tax books for the prior year;
  2. Applies to more than five-tenths of one percent (0.5%) of either the personal or real estate assessments in the county; and
  3. Requires the county collector to collect the tax or fee.
2. 1. The entity that levies the tax or fee shall deliver to the preparer of the tax books of the county a complete listing of the real estate parcels or personal assessments on which the tax or fee is applied.
  2. The list shall include the following information:
    1. The name of the owner of the property;
    2. The county parcel and identifying number;
    3. If real property, the legal description; and
    4. The amount of taxes or fees due for each real estate parcel or personal assessment.
  3. The list shall be delivered to the preparer of the tax books no later than January 1 of the year the tax or fee is to be collected.
  4. If the county uses a computer and other electronic equipment to collect taxes, the list shall be given to the preparer of the tax books in an electronic format compatible with and useable by the county's computer or electronic equipment.
3. All due dates, transfers of funds, and recordkeeping on the tax or fee shall be the same as those currently in use for real estate or personal property taxes.
1. If an entity determines that an emergency exists, it may petition the county quorum court of the county to allow the entity to place a tax or fee on the tax books of the county after January 1 and before July 31 of the year in which collection is to be made.
2. If the county quorum court agrees that an emergency exists:
  1. 1. The tax or fee will be added to the tax books if the entity complies with § 26-28-114.
    2. The January 1 deadline under § 26-28-114 shall become August 15 of the year to be collected; and
  2. 1. The entity shall pay the expense of adding the tax or fee to the tax books and any additional expense incurred by the county in collecting the tax or fee.
    2. The additional expense shall be determined by a committee consisting of the county judge, the preparer of the tax books or the county clerk, and the county collector not later than October 1 of the collection year.
    3. The expense shall be withheld from the proceeds for the tax or fee by the county treasurer and be credited to the county collector's commission account.
1. Under the unit tax ledger system, all counties in the State of Arkansas which shall adopt it shall cause the county collector's office to be the exclusive tax collecting and accounting office of the county, and the county collector shall collect current and delinquent taxes on real and personal property.
2. All laws and parts of laws relating to real and personal tax collecting, recording, charging, billing, and accounting wherein reference is made to the county clerk, county treasurer, and delinquent tax collector shall mean “county collector.” However, the county collector shall settle with the county treasurer of the counties which may adopt the system as is provided by law.
1. All county assessors in counties where the system contemplated by this subchapter is installed shall deliver to the county collector real and personal property assessments on forms furnished by the county collector. The county collector shall then make proper posting of each assessment. As postings are made, the county collector shall compile a proof journal list of the assessments showing the total valuation. The total valuation shall balance with the total of all real and personal property assessments as made by the county assessor.
2. Thereafter, the county assessor shall verify the total and, when found to be correct, shall make a certificate of assessment of the real and personal property in the county showing a total valuation of all real and personal property assessed in the county, which shall conform with the total valuation assessed by the Arkansas Public Service Commission as certified down to the county assessor, the county assessor adding to the certificate required by law the following additional paragraph:
3. 1. The county assessor shall make the certificate in triplicate and file one (1) copy with the commission, which shall be the county assessor's abstract and which shall give the valuation of all assessments in the county by total and not by items, as provided by § 26-26-1103, and one (1) copy of the certificate shall be filed in the county clerk's office, and the county assessor shall keep one (1) copy in the file in his or her office.
  2. All three (3) of the certificates shall be subscribed and sworn to as provided by law.
1. 1. The county quorum court of any county in this state by ordinance may provide for the use of electronic data processing equipment, commonly referred to as a computer, to keep the assessment records, to prepare the tax books, and to prepare the county collector's records and receipts for property taxes.
  2. The county quorum court by ordinance may designate the appropriate county officer to be responsible for the maintenance and operation of the computer.
  3. The county quorum court by ordinance may designate the county clerk, the county assessor, or the county collector as preparer of the tax books.
2. When a county acquires, leases, rents, or otherwise provides for the use of electronic data processing equipment for the purposes prescribed in subsection (a) of this section, the county quorum court by ordinance may authorize the use of the electronic data processing equipment for any other appropriate county purposes and may provide for prorating the costs of the electronic data processing equipment among the various county offices.
1. Taxes assessed upon real and personal property shall bind them and be entitled to preference over all judgments, executions, encumbrances, or liens whensoever created.
2. All taxes assessed shall be a lien upon and bind the property assessed from the first Monday of January of the year in which the assessment shall be made and shall continue until the taxes, with any penalty which may accrue thereon, shall be paid. However, as between grantor and grantee, the lien shall not attach until the last date fixed by law for the county clerk to deliver the tax books to the county collector in each year after the tax lien attaches.
3. 1. Failure to satisfy a personal property tax lien following a purchase of a business or a business's assets, goods, chattels, inventory, or equipment not in the ordinary course of business shall result in the assessment of an additional penalty under § 26-36-201(c) except with respect to a purchase of the following:
    1. A vehicle subject to registration; or
    2. A manufactured home or a mobile home.
  2. A purchase of a business or a business's assets, goods, chattels, inventory, or equipment not in the ordinary course of business does not include the deed of property in lieu of foreclosure or the acquisition of title to property following a foreclosure sale.
1. Whenever an action may be brought against any person holding the office of county collector, county assessor, or county clerk for performing or attempting to perform any duty or thing authorized by any of the provisions of this act or the laws of this state, for the collection of the public revenues, the county collector, county assessor, or county clerk shall be allowed and paid out of the county treasury reasonable fees of counsel and other expenses for defending the action or suit and the amount of any damages or costs adjudged against him or her.
2. The fees, expenses, damages, and costs shall be apportioned ratably by the county clerk among all the parties entitled to share the taxes so collected and shall be deducted by the county clerk from the shares or portions of revenue at any time payable to each, including, as one of the parties, the state itself, as well as the counties, townships, towns, or cities, and other corporations or other organizations entitled thereto as indicated.
1. 1. It shall be unlawful for any railroad company, bus line company, truck line company, motor vehicle carrier, or any other common carrier, whether person, firm, or corporation, or the agent or receiver thereof, to knowingly transport, or permit to be transported, within the State of Arkansas any goods, wares, merchandise, or articles whatsoever upon the sale or possession for sale of which a tax is imposed by law when the tax has not been paid upon the goods, wares, merchandise, or articles. And it shall be unlawful for any carrier to sell, offer for sale, or deliver to any person, or permit the sale or delivery of any goods, wares, merchandise, or articles upon which the tax has not been paid as required by law.
  2. Each sale, offer for sale, or delivery shall constitute a separate offense.
2. For each violation of this section, a fine of twenty-five dollars ($25.00) shall be imposed, and the person, firm, corporation, or the agent or receiver thereof, violating any of the provisions of this section shall also be liable for the amount of tax due.
3. All fines collected for the violation of any of the provisions of this section shall be paid into the State Treasury.
4. All taxes due under this section may be recovered by a civil action brought at the instance of the Attorney General in the name of the Secretary of the Department of Finance and Administration of the State of Arkansas.
5. This section is not to be construed to repeal any law, but it shall be cumulative to all present laws affecting the subject matter contained in this section.
1. 1. All banks, savings and loan associations, and other financial institutions and all persons, firms, or corporations which are holders of escrow funds for payment of real property taxes, within thirty (30) days after sufficient funds have accumulated in each account for the payment of property taxes, shall notify the county collector.
  2. If sufficient funds for the payment of one (1) year's taxes on real estate have accumulated within an escrow account prior to the commencement of the period in which the county collector may collect real property taxes for the year in which due, this notification shall be made within thirty (30) days after the county collector is authorized by law to commence collecting real property taxes during the year.
  3. Further, those holders of escrow funds must remit payment for property taxes within sixty (60) days of receipt of the tax bills from the county collector.
  4. 1. Any bank, savings and loan association, or other financial institution or any person, firm, or corporation holding escrow funds for the payment of real property taxes due on properties belonging to persons for whom the escrow accounts are being held, which fails to pay to the county collector the real property taxes on the property within the time limitation imposed by this subsection, shall be subject to a penalty of ten percent (10%) of the amount of the total taxes due.
    2. The penalties shall be paid from funds belonging to the holder of the escrow account.
2. In no event shall moneys paid as penalties for late payment of real property taxes under the provisions of subsection (a) of this section be charged against the escrow account.
3. All penalties collected by the county collector under subsection (a) of this section shall be credited to the various taxing units of the county in the respective proportions that each taxing unit shares in real property taxes collected by the county.
1. If a county collector has reason to believe that a person charged with taxes, other than taxes upon real estate, is about to remove from the county without paying the person's taxes, at any time the county collector may levy and collect the taxes with costs by distress and sale.
2. A county collector may levy and collect the charged taxes with costs by distress and sale if the delinquent taxes are not satisfied or paid in full following the sale of a business or the sale of the assets, goods, chattels, inventory, or equipment of a business not in the ordinary course of business.
1. Every person shall be liable to pay tax for the lands, town, or city lots of which he or she may stand seized for life, by curtesy, or in dower, or may have the care of as guardian, executor, or administrator, or as agent or attorney, having the funds of the principal in his or her hands.
2. It shall be the duty of each person holding lands as indicated to pay the taxes which may be assessed thereon each year.
1. In all cases where any tract of land may be owned by two (2) or more persons as joint tenants, coparceners, or tenants in common, and one (1) or more proprietors shall have paid the tax or tax and penalty charged on his or her proportion of the tract, or one (1) or more of the remaining proprietors shall have failed to pay his or her proportion of his or her tax or tax and penalty charged on the land and partition of the land has or shall be made between them, then the tax or tax and penalty, paid as indicated, shall be deemed to have been paid on the proportion of the tract set off to the proprietor who paid his or her proportion of the tax or tax and penalty, and the proprietor so paying the tax or tax and penalty, as indicated, shall hold the proportion of the tract set off to him or her, as indicated, free from the residue of the tax or tax and penalty charged on the tract before partition, and the proportion of the tract set off to the proprietor who shall not have paid his or her proportion of the tax or tax and penalty, remaining unpaid, shall be charged with the tax or tax and penalty in the same manner as if the partition had been made before the tax or tax and penalty, had been assessed.
2. Whenever any land so held by tenants in common shall be sold upon proceedings in partition or shall be taken by the election of any of the parties to such proceedings, or when any real estate shall be sold at judicial sale, or any administrator's, executor's, guardian's, or trustee's sale, the court shall order the taxes and penalties and the interest thereon, against the lands to be discharged out of the proceeds of the sale or election.
1. Every person holding lands as guardian, executor, or administrator and neglecting or refusing to list or pay the taxes upon them, in the manner indicated, shall be liable to an action by his or her ward or devisee for any damage sustained by his or her neglect.
2. Every person having the care of lands as agent or attorney as indicated having funds of the principal in his or her hands, for such purpose, and neglecting or refusing to list or pay the taxes on the lands shall be liable in an action to his or her principal for any damage the principal may have sustained by his or her neglect or refusal.
1. 1. All ad valorem taxes levied on real and personal property by the several county courts of the state when assembled for the purpose of levying taxes, except taxes on the property of utilities and carriers and all ad valorem taxes on real property held in escrow, are due and payable between the first business day in March and October 15 inclusive in the year succeeding the year in which the levy is made.
  2. 1. Except as provided in § 26-35-601, every taxpayer other than a utility or carrier has the option to pay the current taxes on real property and personal property of the taxpayer in installments as follows:
      1. The first installment of one-fourth (¼) of the amount of the taxes is payable between the first business day in March and the third Monday in April inclusive;
      2. A second installment of one-fourth (¼) or a first installment of one-half (½) if no payment was made before the third Monday in April is payable between the third Monday in April and the third Monday in July inclusive; and
      3. The third installment of one-half (½) is payable between the third Monday in July and October 15 inclusive.
    2. 1. A county collector may authorize the county's taxpayers other than a utility or carrier to pay current real property taxes and personal property taxes in installments in any amount between the first business day in March and October 15 inclusive.
      2. Except as provided in § 26-35-601, a county collector shall not accept payment of delinquent real property taxes from a taxpayer unless the delinquent personal property taxes of the taxpayer are paid in full.
2. All ad valorem taxes levied on the real and personal property of utilities and carriers are due and payable as follows:
  1. One-fourth (¼) between the first business day in March and the third Monday in April inclusive;
  2. One-fourth (¼) between the third Monday in April and the second Monday in June inclusive; and
  3. One-half (½) between the second Monday in June and October 15 inclusive in the year succeeding the year in which the levy is made.
3. 1. A county collector shall assess a penalty of ten percent (10%) against all unpaid tax balances remaining after October 15 for every taxpayer other than a utility or carrier or after the prescribed dates listed in subsection (b) of this section for utilities and carriers.
  2. 1. A taxpayer paying in installments under subdivision (a)(2) of this section shall not be assessed a penalty until the taxes become due and remain unpaid after October 15.
    2. However, if the last day for the payment of taxes on any installment is a Saturday, Sunday, or postal holiday, the last day to pay taxes without a penalty is the following business day.
  3. 1. A property tax balance payment is timely received under this subsection if mailed through the United States Postal Service and postmarked by October 15.
    2. If October 15 is a Saturday, Sunday, or postal holiday, a property tax balance payment is timely received if mailed and postmarked through the United States Postal Service the following business day.
1. The county collector of each county in the State of Arkansas shall receive county warrants in payment of county taxes, and the orders or warrants that may be payable on presentation of any town or city for their respective taxes.
2. This section shall not be so construed as to compel the county collector to accept any order or warrant that is by the laws of this state required to be refunded.
1. No county collector or deputy county collector shall, either directly or indirectly, contract for or purchase any orders or warrants issued by the county of which he or she is collector, or any state warrants, town orders, or the orders or warrants of any city, town, or other body politic for which he or she is the collector of taxes, at any discount whatever upon the sum due on those orders or warrants.
2. If any county collector or deputy county collector, directly or indirectly, contracts for, purchases, or procures any orders or warrants at any discount whatever upon the sum for which they are respectively issued, he or she shall not be allowed, on settlement, the amount of the warrants or orders, or any part thereof, and shall also forfeit the whole amount due on the warrants or orders and the sum of one hundred dollars ($100) for each and every breach of the provisions of this section, to be recovered in a civil action at the suit of the state for the use of the county.
3. 1. The Treasurer of State or the person to whom the county collector of any county is required to return the state, county, city, town, village, school, or road tax is, respectively, prohibited from receiving from any county collector any warrants, orders, or bonds in payment of taxes collected by him or her or his or her deputies unless with the warrants, orders, or bonds, the county collector shall file his or her affidavit with the Treasurer of State or the person entitled to receive the tax, stating therein that all warrants, orders, and bonds were received at their par value and that he or she has faithfully performed his or her duties as prescribed in this section.
  2. Whoever swears falsely in this affidavit is guilty of perjury and, upon conviction, shall be punished by confinement in the state penitentiary for not less than one (1) nor more than three (3) years.
1. All county collectors may accept payment of county property taxes, penalties, and associated costs by an approved credit card or debit card.
2. 1. As authorized by subsection (a) of this section, all county collectors may enter into contracts with credit card companies and may pay the fees normally charged by those companies for allowing the county collector to accept their cards as payment.
  2. 1. When a taxpayer pays his or her property taxes by an approved credit card, the county collector shall assess a service fee equal to the amount charged to the county collector by the credit card issuer.
    2. This charge may be added to and become part of any underlying obligation.
1. Each county collector in this state shall be charged with the responsibility of collecting personal property taxes shown to be due by the taxpayer as reflected by the records in the county collector's office at the time the taxpayer pays the general taxes due on real estate.
2. Any county collector willfully accepting payment of general real estate taxes without requiring the payment of personal property taxes due as reflected by the records in the county collector's office shall be deemed guilty of a misdemeanor and upon conviction shall be fined in a sum not less than twenty-five dollars ($25.00) nor more than one hundred dollars ($100).
3. 1. Except as provided in subdivisions (c)(2)-(4) of this section, it is the intention of this section to require the collection of personal property taxes as reflected by the records in the office of the county collector and to prevent a taxpayer from paying and the county collector from receiving payment of general real estate taxes without payment of personal property taxes if any personal property taxes are shown to be due.
  2. The provisions of this section shall not prevent any person, firm, partnership, or corporation from paying general real estate taxes on property securing the payment of indebtedness due the person, firm, partnership, or corporation seeking to pay the taxes.
  3. Notwithstanding the other provisions of this section, a county collector shall accept payment of general real estate taxes on a parcel of property at the time the ownership of the property is being transferred if the taxpayer transferring title to the property has paid all delinquent personal property taxes.
  4. Furthermore, a purchaser in a foreclosure sale shall not be responsible for the payment of the personal property taxes required to be paid by this section.
1. 1. Arkansas Legislative Audit shall require every county collector of taxes to keep any and all tax money collected in a separate account from all other money which the county collector may have in his or her possession.
  2. A county collector shall have no authority to check on this account except in favor of a treasurer or depository to whom he or she is required to pay the money or to himself or herself for commission or salary already earned.
2. 1. 1. Failure to comply with this section on the part of a county collector shall be a violation and shall render him or her liable to a penalty of not less than twenty-five dollars ($25.00).
    2. Each day's failure shall be considered a separate offense.
  2. Upon finding that public funds and private funds are being jointly deposited or improperly disbursed under this section, the director shall notify immediately the bondsmen of the offending officer and the public of the violation.
1. 1. Any county collector who shall resign, be removed, or be disqualified shall pay over all moneys, which may be in his or her hands, due the state, county, city, town, or school district, to his or her successor in office and take duplicate receipts therefor.
  2. One (1) of the receipts shall be filed with the county clerk and the other retained by the county collector.
2. The county clerk shall certify to the Auditor of the State the amount of the receipt, and it shall be the duty of the county collector charged therewith to pay it into the county treasury in the same manner and at the same time as regular revenues are to be paid.
3. In the receipts, it shall be specified particularly on what account the moneys mentioned were received, whether from taxes or from other sources.
1. Whenever any county collector dies after he or she has received the tax books for any year and before he or she has collected the taxes charged therein, his or her legal representative shall hand at once to his or her successor, as soon as he or she is appointed and qualified, the tax books and pay at once all moneys, less his or her commission, which have been collected by the deceased county collector from all sources then in his or her hands.
2. 1. The new county collector shall execute receipts in triplicate, to be attested by the county clerk, for the tax books so delivered and showing the amount already collected upon them and the amount uncollected.
  2. 1. The new county collector shall also execute receipts in triplicate for the amount of taxes collected by the deceased county collector from all sources and paid over to him or her by the executor or administrator, one (1) of which shall be certified by the county clerk to the Auditor of State, who shall charge the new county collector with the balance of the state taxes due on the tax book and the amount paid over to him or her by the executor or administrator of the deceased county collector.
    2. Another receipt shall be filed with the county clerk, who shall charge the new county collector with the balance of taxes due on the tax books and with the amount paid over by the executor or administrator.
3. The third receipt shall be given to the executor or administrator of the deceased county collector.
1. The Governor may, by proclamation, extend the time when the penalty shall attach for making distraint, returning delinquent list, advertising and selling delinquent lands, making settlement and paying over the revenue, and for the performance of any other duty by the county collectors so that the taxpayer may have the same time to pay the taxes and the county collector have the same time to perform the duties of his or her office as allowed by law in case the failure or vacancy had not occurred.
2. The Governor shall, in his or her proclamation, fix the time for the performance of the acts mentioned in this section. A copy shall be filed in the office of the county clerk and recorded in the records of the county court by the county clerk.
3. The proclamation shall be published in some newspaper in the county for two (2) weeks if a newspaper is published therein.
4. All acts and duties performed in the time fixed in the proclamation shall be as valid and binding as if performed in the time fixed by the general law.
1. Any county collector may contract with one (1) or more financial institutions to act as his or her agents to receive real and personal property tax payments on his or her behalf.
2. Tax payments received under a contract as provided for in this section shall be collected at the same time and in the same manner as all other property tax payments, and no payments shall be collected after the last payment day established by law.
3. A financial institution receiving tax payments under a contract as provided for in this section, shall, on the first working day of each week, transmit to the county collector all property taxes received during the preceding week.
4. As used in this section, “financial institution” means any organization or enterprise which receives deposits and forwards checks, drafts, or orders for collection and which is subject to state rules or federal regulation.
5. Nothing in this section shall permit a county collector to make any payment to a financial institution for receiving real and personal property taxes as provided in this section.
1. In all counties, including those having two (2) or more levying courts or two (2) or more judicial districts, in which the county collector is required by law to visit each precinct or township in the county for the purpose of collecting taxes due, the county collector shall not be required to make these visits but shall publish notice and collect the taxes as provided by § 26-35-702.
2. In any county where the county collector is required to go to the various townships, he or she shall publish a notice in a newspaper stating that his or her visits to the several townships will be discontinued. The notice shall state where the taxes may be paid, and, where there are two (2) or more county sites, the notice shall advise the dates upon which taxes may be paid at the respective sites.
1. Where there are two (2) or more county sites, the tax books shall be kept at one (1) site part of the time and at the other site part of the time, the time to be divided between the two (2) or more sites as in the judgment of the county collector will be proper.
2. Where there are two (2) or more sites, the notices shall state the dates between which the county collector will be at each county site.
1. No later than July 1 of each year, the county sheriff or county collector shall be required to mail statements of taxes due by a taxpayer to the address provided by the taxpayer.
2. 1. No later than July 1 of each year, the county sheriff or collector may in his or her discretion establish an electronic registry allowing each taxpayer to voluntarily register the taxpayer's personal information authorizing statements of taxes due by the taxpayer to be sent electronically using the information provided by the taxpayer.
  2. The county sheriff or county collector in his or her discretion may provide electronically to the taxpayer subsequent statements or notices for property taxes due or delinquent by using the information provided by the taxpayer.
  3. In the event the taxpayer's information changes and the electronic attempt to notify is returned undelivered, it shall be the taxpayer's obligation to furnish the correct information or the tax statements will be sent to the mailing address of the taxpayer.
3. In the event that the mailing address or electronic address information of the taxpayer changes, the taxpayer has an obligation to furnish the correct mailing address or electronic address information.
1. Every county collector who mails tax statements may charge the taxpayers a postage fee not to exceed the cost of first-class postage to defray the expense of processing and mailing tax statements.
2. The postage fee shall be noted on each tax statement and shall be paid at the same time or before the tax is paid.
3. The taxpayer's receipt shall include the amount of postage fee paid.
4. 1. Postage fees received shall be accounted for on the county collector's final settlement.
  2. The county collector may use the fees to purchase postage, and any amount of fees collected in any month which are not used for the purchase of postage that month shall be deposited into the county general fund.
5. Due to the substantial savings in postage, paper, handling, and labor cost from delivery of statements and notices electronically using information provided by the taxpayer, the county sheriff or county collector sending the tax statement and notices may waive the costs for mail delivery from taxpayer property tax statements or may charge the reduced costs of electronic notification.
1. Real or personal property shall not be returned as delinquent for nonpayment of taxes, nor shall any penalty or interest be added to taxes in excess of the amount required to be paid before the delinquency date under this section, while there is pending in the circuit court, Court of Appeals, or the Supreme Court an appeal from an order of the county court fixing the assessed value of property.
2. If there has been no final disposition of an appeal before the last day fixed by law for the payment of the taxes without penalty, the taxpayer shall have thirty (30) days after final disposition of the appeal within which to pay any taxes in excess of the amount required to be paid before the delinquency date under this section without penalty or interest.
3. A property owner appealing a personal property tax assessment to the circuit court shall pay:
  1. To the county collector as otherwise provided by law the amount the taxpayer claims is owed under the personal property tax assessment; and
  2. Into the registry of the circuit court an amount equal to the difference between the personal property tax assessment and the amount the taxpayer claims is owed under the personal property tax assessment.
4. A property owner appealing a real property tax assessment to the circuit court shall pay to the county collector the least of:
  1. The amount of taxes due on the portion of the taxable value of the real property that is not in dispute, subject to this section;
  2. The amount of taxes due on the real property under the court order from which the appeal is taken; or
  3. The amount of taxes due on the real property based on the previous year's assessment.
5. 1. In the case of a property owner who elects to pay the amount of taxes under subdivision (d)(1) of this section, the property owner shall include in the complaint filed in the circuit court, or declare by subsequent affidavit filed with the circuit court, not less than sixty (60) days before the last day fixed by law for the payment of taxes without penalty, the taxes due on the portion of the taxable value of the property that is not in dispute or the lawful basis for any claim of exemption.
  2. On the motion of a party, the circuit court with jurisdiction over the appeal shall hold a hearing to review and determine compliance with this section, including verification of the amount of taxes the taxpayer claims is owed under subdivision (d)(1) of this section.
  3. Upon conclusion of the hearing, the circuit court shall order the property owner to pay to the county collector the amount that the circuit court determines is the proper undisputed amount under subdivision (d)(1) of this section.
  4. 1. If the circuit court determines that the property owner has not substantially complied with this section, the circuit court shall dismiss the pending action.
    2. If the circuit court determines that the property owner has substantially but not fully complied with this section, the circuit court shall dismiss the pending action unless the property owner fully complies with the circuit court's determination within thirty (30) days of the determination.
6. 1. A property owner may include a request in the complaint on appeal to the circuit court, or file a motion with the circuit court, to waive payment of taxes due during the pendency of appeal if the payment would constitute an unreasonable restraint on the party's right of access to the courts.
  2. The request or motion to waive payment shall include a sworn affidavit of inability to pay the taxes at issue.
  3. Upon the filing of a request or motion, the circuit court shall hold a hearing to review the property owner's request and may set terms and conditions on any grant of relief as may be reasonably required by the circumstances.
  4. A property owner may be excused from the payment requirements under this section if upon hearing the circuit court finds that the payment would constitute an unreasonable restraint on the property owner's right of access to the courts.
7. Except as provided under subsection (f) of this section, a property owner who appeals a property tax assessment to the circuit court shall pay taxes on the property subject to the appeal in the amount required by this section before the last day fixed by law for the payment of taxes without penalty, or the property owner forfeits the right to proceed to a final determination of appeal.
8. 1. A property owner who pays to the county collector an amount of taxes greater than the amount required by this section does not forfeit the property owner's right to a final determination of the appeal by making the payment.
  2. The property owner may pay an additional amount of taxes at any time.
  3. If the property owner files a proper and timely appeal to the circuit court, taxes paid on the property are considered under protest, whether paid before or after the appeal is filed.
9. 1. The pendency of an appeal of a property tax assessment does not affect the delinquency date for the taxes on the property subject to appeal.
  2. However, the delinquency date applies only to the amount of taxes required to be paid under this section.
10. 1. In an appeal of an order of the county court to a circuit court as to the sole claim or issue of whether property is exempt under Arkansas Constitution, Article 16, § 5, the property owner shall not be required to pay any portion of the taxes assessed on the real property at issue in the appeal and shall not be found delinquent for nonpayment of real property taxes during the pendency of the appeal to the circuit court, the Court of Appeals, or the Supreme Court.
  2. 1. Within sixty (60) days before the delinquency date, a party may file a motion, based upon a good faith belief that the personal property at issue in the appeal will be removed from the jurisdiction of the county during the pendency of the appeal, requesting that the court order the property owner to file with the circuit court an irrevocable letter of credit or surety bond in the amount of the personal property taxes due.
    2. If a party elects not to file a motion, the property owner shall not be required to pay any portion of the taxes assessed on the personal property at issue in the appeal and shall not be found delinquent for nonpayment of personal property taxes during the pendency of the appeal to the circuit court, the Court of Appeals, or the Supreme Court.
  3. The property owner may elect to pay any real or personal property taxes due before the date of delinquency under subsection (c) or subsection (d) of this section, and such payment shall not affect the taxpayer's ability to appeal the exempt status of the property to the court of proper jurisdiction.
  4. After final disposition of an appeal:
    1. The property owner shall be required to pay the amount of taxes the court determines is owed, if any, within thirty (30) days of final disposition; and
    2. Any award of a refund shall be made by the county upon the order of a court of proper jurisdiction.
1. 1. When any person has paid taxes on any real property or personal property, erroneously assessed, as defined and described in § 26-28-111(c), upon satisfactory proof being adduced to the county court of this fact, the county court shall make an order directed to the county treasurer refunding to the person the amount of tax so erroneously assessed and paid.
  2. All erroneous assessment claims for property tax refunds shall be made within three (3) years from the date the taxes were paid.
  3. If an erroneous assessment claim is for erroneous assessments made in two (2) or more tax years, the county court may order that the property tax refund be made in up to two (2) equal annual installments, by December 31 of each year, beginning with the year in which the order is entered.
  4. A clerk of a county court shall not charge a fee for filing a petition with the county court requesting a refund under this section.
2. The general fund of the county shall be reimbursed by transfer to it from funds of the respective taxing units, and the amount contributed by each taxing unit shall be the amount of the erroneous payment received by the taxing unit.
1. It is the public policy of this state that circuit courts may, in meritorious litigation brought under Arkansas Constitution, Article 16, § 13, in which the circuit court orders any county, city, or town to refund or return to taxpayers moneys illegally exacted by the county, city, or town, apportion a reasonable part of the recovery of the class members to attorneys of record and order the return or refund of the balance to the members of the class represented.
2. If, after expiration of a reasonable period of time for the filing of claims for the illegally exacted moneys as ordered by the circuit court, residual funds exist, said residual funds shall be deemed abandoned and escheat to the county, city, or town which exacted same.
1. 1. All taxes levied on real estate and personal property for the county courts of this state, when assembled for the purpose of levying taxes, are due and payable at the county collector's office between the first business day of March and October 15 inclusive.
  2. All taxes unpaid after October 15 are delinquent.
2. 1. The county collector shall extend a penalty of ten percent (10%) against all delinquent taxpayers that have not paid their taxes within the time limit specified.
  2. The county collector shall collect the penalty provided in subdivision (b)(1) of this section.
3. The county collector shall extend an additional penalty of ten percent (10%) upon all delinquent taxpayers if the taxpayers' delinquent personal property taxes are not satisfied or paid in full by October 15 following the purchase of a business or the assets, goods, chattels, inventory, or equipment of a business not in the ordinary course of business.
4. A penalty shall not be assessed against a taxpayer who is a member of the United States Armed Forces, reserve component of the armed forces, or the National Guard during the taxpayer's deployment plus one (1) tax year after the deployment ends.
5. When October 15 falls on a Saturday, Sunday, or a holiday observed by the United States Postal Service, the taxes shall become due and payable the following business day that is not a holiday observed by the United States Postal Service.
1. No taxes returned delinquent shall be paid into the State Treasury except by the county collector.
2. It shall be the duty of the county clerk to add a penalty of ten percent (10%) upon all taxes returned delinquent, which shall be collected in the manner provided for the collection of delinquent taxes.
1. 1. 1. No later than December 1 in each year, the county collector shall prepare a list of delinquent personal property taxes and deliver a copy of the list to a legal newspaper of the county.
    2. 1. Within seven (7) days thereafter, the newspaper shall publish the list.
      2. The newspaper shall publish the list in at least seven-point type.
    3. If the newspaper regularly publishes a total market coverage edition or supplement publication that has wider circulation within the county or district, the newspaper may publish the list in that edition or publication.
  2. If there is no newspaper in the county or district, the publication shall be in the nearest newspaper having a general circulation in the county or district for which the list is being published.
2. The publication shall show, besides the name of the taxpayer, the taxpayer's school district and the total amount of taxes delinquent, including penalties. The publication shall be in substance as follows:
3. 1. The newspaper publishing this list shall receive as publication cost the sum of one dollar and twenty-five cents ($1.25) per name, per insertion, which sum, together with fifty cents (50¢) per name for the county collector preparing and furnishing the list, shall be charged to the delinquent taxpayer and shall be paid by the county collector from any moneys in the county collector's possession derived from payment of personal property taxes.
  2. The receipt for the payment, verified by the certificate of the county clerk as to its correctness, shall entitle the county collector to a credit for the amount so paid.
4. This section shall be cumulative to all existing laws relative to the collection of personal property taxes.
1. The delinquent list, together with the fees allowed to any county collector, shall be delivered to his or her successor, and it shall be returned to the county clerk by the outgoing county collector for that purpose, and so on until the whole shall be collected.
2. After the list has been returned two (2) years, the county court shall have power to strike all names of persons who, in the opinion of the county court, own no property out of which the taxes due on the list can be made by sale or otherwise.
3. The county court shall have the authority to strike off the delinquent and assessment list at any time the names of persons who own mobile homes which are assessed as real property, improvement only, who, in the opinion of the county court, have vacated the jurisdiction or own no property out of which the taxes due can be made by sale or otherwise.
1. 1. At any time after October 15, the county collector shall distrain sufficient goods and chattels belonging to a person who owes taxes upon the person's personal property to pay the taxes due upon the personal property and a penalty of twenty-five percent (25%) on the taxes due.
  2. If the county collector distrains goods and chattels under subdivision (a)(1) of this section, the county collector shall immediately proceed to advertise the sale of the goods and chattels in three (3) public places in the county, stating the time when and the place where the goods and chattels will be sold.
  3. The county collector shall collect taxes and penalties under this subsection and deposit the taxes and penalties under this subsection into the county school fund.
2. 1. If the taxes for which property is distrained, and costs which shall accrue thereon are not paid before the day appointed for sale, which shall not be less than ten (10) days after taking the property, the county collector shall proceed to sell the same at public vendue, or so much thereof as will be sufficient to pay the taxes and the costs of the distress and sale.
  2. The county collector shall not distrain any goods and chattels for taxes levied on real property, except as provided in § 26-3-204.
3. 1. The county collector is authorized and empowered to levy on and sell the goods and chattels of the person liable for taxes provided, in the same manner and under the same restrictions as goods and chattels are required to be levied and sold under execution on judgment at law, when not inconsistent with the provisions of this subchapter.
  2. No goods and chattels of any person shall be exempt from levy and sale.
4. The county collector is allowed the same fees for making distress and sale of goods and chattels for the payment of taxes which are allowed by law to the county sheriff for making levy and sale of property on execution under § 21-6-307 for each delinquent taxpayer.
5. 1. If a taxpayer operating a business in a county is delinquent in the payment of personal property taxes for personal property owned by or used in the business, then following the certification and publication of delinquency under § 26-36-203, the county collector may distrain goods or chattels of the taxpayer owned by or used in the business under subsection (a) of this section by publication of a Notice of Distraint and Tax Sale in three (3) public places in the county or in a newspaper of general circulation in the county.
  2. The Notice of Distraint and Tax Sale shall contain:
    1. The location, date, and time of the sale;
    2. The name of the taxpayer and business under which the goods or chattels to be sold is assessed;
    3. The principal sum of personal property taxes owed with a certification of the principal sum by the county collector;
    4. The following specific information:
    5. A statement that it is a Class B misdemeanor to remove, destroy, or deface the Notice of Distraint and Tax Sale or to interfere or obstruct the sale of or the access to the goods or chattels on the date of the sale by the county collector, the county sheriff, or their deputies.
  3. The county collector shall provide a copy of the Notice of Distraint and Tax Sale to the taxpayer by regular mail or by posting a copy at the physical location where the goods or chattels are held.
  4. The Notice of Distraint and Tax Sale shall be posted conspicuously at the location of the sale.
  5. In lieu of physically securing the goods or chattels or storing or transporting the goods or chattels to another location for sale, the sale may be held at any place of business, warehouse, storeroom, or facility owned or under the possession of the taxpayer, including without limitation the current location of the goods or chattels to be sold.
  6. It is a Class B misdemeanor to knowingly remove, destroy, or deface a Notice of Distraint and Tax Sale posted under this section or to knowingly interfere or obstruct the sale or access of the county collector, the county sheriff, or their deputies to the goods or chattels on the date of the sale.
1. 1. If the tax upon personal property, moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise of a person, association, or corporation remains unpaid after October 15 in any year and the county collector is unable to find any personal property of the person, association, or corporation on which to levy to make the taxes due, then the county collector shall present the account for taxes to any person who may be indebted to the person, association, or corporation, and demand the payment of the taxes.
  2. The person to whom the account for taxes is presented shall pay over to the county collector the amount of the taxes that the person owes up to the amount of the debt and take the county collector's receipt for the payment. The receipt shall be taken in all courts of this state as payment on the taxpayer's indebtedness to the full amount expressed on the county collector's receipt.
2. If the person should fail or refuse, on demand, to pay over the amount of the tax that he or she owes to the county collector, the county collector shall file a statement of the amount of the tax with the person so refusing, which shall operate as a garnishment upon the person so served. The county collector shall proceed to collect the taxes in the manner fixed by law in cases of garnishment.
3. No person shall be compelled to pay any debt before it may be due nor a greater amount than he or she may be owing the person, corporation, or association.
4. The cost of garnishment shall be paid by the party refusing to pay the taxes when so requested.
1. Each county collector in making returns of the delinquent lists of personal property to the county clerk shall note on the margin of the returns the county in this state to which any delinquent taxpayer may have removed or resides in, with the date of his or her removal, if the county collector is able to ascertain that fact.
2. The county clerk shall immediately forward to the county clerk of any county of this state, which any delinquent taxpayer has removed to or resides within, a certified statement or account of the taxes so assessed and not paid. The certified statement shall specify the value of the property on which the taxes were levied and the amount of the taxes levied thereon, with the penalty and cost. The county collector shall proceed to collect the delinquent taxes in the same manner, and with like authority, as prescribed in this subchapter for collecting delinquent taxes upon personal property and shall make return thereof to the county collector of the proper county.
1. The county collector may collect, at any time, all delinquent personal property tax in his or her county, or any that may be sent from another county, by the sale of property or otherwise, and the county collector shall make returns of the amount so collected to the proper counties and officers.
2. 1. The county collector shall pay over to the county treasurer on the first day of each month or within ten (10) days after the first day of each month all amounts collected for his or her county under this section.
  2. However, upon a certificate of distribution of the amounts collected under this section being prepared by the county clerk, county collector, or other county officer designated pursuant to § 26-28-102(a), which certificate shall be issued on or before the thirtieth day of each month, the county treasurer shall transfer to the various funds the amount due each fund.
3. 1. All costs associated with such delinquent personal property taxes shall be prorated to the original taxing entities.
  2. All penalties shall be deposited as county revenues into the county general fund.
4. For purposes of this section, the costs and penalties associated with delinquent personal property taxes shall not be considered a portion of the county collector's revenue in calculating excess commissions.
1. 1. When the ad valorem taxes on working interests, royalty interests, or overriding royalty interests in oil or gas of any taxpayer is delinquent for a period of one hundred eighty (180) days or more, any one (1) or more taxing units which are entitled to a portion of the delinquent taxes when collected shall have a cause of action against the delinquent taxpayer for that portion of the delinquent taxes and costs of collection, including the penalty and interest thereon, to which the taxing units are entitled, plus a reasonable attorney's fee.
  2. 1. Any such action shall be brought in the circuit court of the county in which the delinquent taxpayer resides or in which property of the delinquent taxpayer is situated.
    2. Any judgment awarded a taxing unit in such cause of action shall be enforceable to the same extent and in the same manner as other civil judgments.
2. 1. Any taxpayer offering to redeem tax-delinquent property after an action has been filed as authorized in this section shall be required to pay costs, including attorney fees, incurred by any taxing unit in pursuing its remedies under this section.
  2. When any judgment rendered against a delinquent taxpayer pursuant to this section is satisfied, the tax liability on the property and the amount required to be paid to redeem the property shall be reduced by the amount of the taxes, penalty, and interest included in the judgment.
1. 1. 1. If a county collector demands payment of property tax due on mineral interests by a known owner of mineral interests at the taxpayer's last known address and the taxpayer fails to pay the property tax due on mineral interests by October 15, the county collector, after December 1, may:
      1. Present a certified statement or account for taxes to any person who has in the person's possession funds that are:
        
        Derived from the property on which the delinquent taxes are outstanding; and
        
        Due and owing to the delinquent taxpayer; and
      2. Demand payment of the delinquent taxes plus any penalties and interest.
    2. 1. For property taxes on mineral interests that are delinquent after December 1 and at the time the certified statement or account is presented, an additional penalty of ten percent (10%) of the amount of the delinquent property taxes shall be assessed as an administrative collection fee.
      2. Upon collection of the delinquent property taxes and any penalties and interest from the person receiving the certified statement or account, the county collector shall pay, upon request, one-half (½) of the penalty assessed and collected under subdivision (a)(1)(B)(i) of this section to the person making the payment for the administrative costs incurred in collecting and paying to the county collector the delinquent taxes, penalties, and interest.
      3. A portion of the administrative collection fee retained by the county collector under this section shall represent the interest continuing to accrue for the period of up to ninety (90) days from the date that the certified statement or account is presented until the certified statement or account is returned with payment. No other form of interest is due from the person receiving the certified statement or account.
    3. Before a county collector may initiate collection proceedings under this section:
      1. The county collector shall:
        
        Prepare a list of the delinquent taxes on mineral interests in his or her county; and
        
        Provide the list, including without limitation the following information, to the Association of Arkansas Counties by December 1 of each year:
        
        The name and last known address of the owner of the mineral interests;
        
        The applicable well name, uncontrolled lease name, or unitized area name as recognized by the Oil and Gas Commission;
        
        The county, section, township, and range of the property containing the mineral interests;
        
        Notice of the penalty provided under subdivision (a)(1)(B)(i) of this section; and
        
        Notice that the county collector may seek collection under this section if the property taxes, penalties, and interest remain unpaid after December 1;
      2. The Association of Arkansas Counties shall:
        
        Create a website that is accessible by the public and is dedicated to publishing notice of delinquent taxes on mineral interests; and
        
        Within seven (7) days of receiving a list under subdivision (a)(1)(C)(i)(b) of this section, publish the list to the website created under subdivision (a)(1)(C)(ii)(a) of this section.
        
        The publication required under this subdivision (a)(1)(C) shall be in substantially the following form:
      3. The county collector shall:
        
        Publish notice in a newspaper that has general circulation in the county or district for which the list is being published.
        
        If there is no newspaper in the county or district, the publication of notice shall be in the nearest newspaper having a general circulation in the county or district for which the list is being published.
        
        The notice required under subdivision (a)(1)(C)(iii)(a)(1) of this section shall provide the website at which the delinquent mineral interest tax list may be found;
        
        Publish notice at the county courthouse; and
        
        Provide notice through the county website.
  2. 1. Except as provided in subdivision (a)(2)(C) of this section, the person to which the certified statement or account for taxes is presented shall pay the county collector the amount of the taxes, penalties, and interest that the delinquent taxpayer owes up to the amount of funds the person has in the person's possession that is due and owing to the delinquent taxpayer.
    2. 1. The county collector shall provide a copy of the county collector's receipt for the payment to the person making the payment under this section and to the delinquent taxpayer at the delinquent taxpayer's last known address.
      2. The receipt provided under subdivision (a)(2)(B)(i) of this section shall be accepted in the county collector's office and in all courts of the state as payment on the delinquent taxpayer's indebtedness of the amount expressed on the county collector's receipt.
    3. 1. The county collector shall not receive or accept a partial payment of the delinquent taxes, penalties, and interest due.
      2. If, at the end of the ninety-day period allowed for the return of the certified statement or account, a person to which the certified statement or account for taxes is presented has in the person's possession an amount of funds due and owing to the delinquent taxpayer that is less than the amount of the taxes, penalties, and interest that the delinquent taxpayer owes, the person to which the certified statement or account is presented is not required to pay any amount.
2. 1. Service of the certified statement or account of the tax under this section shall operate as a levy upon the person served.
  2. The certified statement or account shall:
    1. State the name of the delinquent taxpayer and the delinquent taxpayer's last known address;
    2. 1. Identify the delinquent taxpayer's assessed property interests.
      2. The county collector shall include in the certified statement or account the identification information provided in the notice of publication made under subdivision (a)(1)(C) of this section and a copy of the tax statements containing the delinquent taxpayer's last known address;
    3. State that the certified statement or account is returnable within ninety (90) days from receipt by the person indebted to the delinquent taxpayer;
    4. State the amount of taxes, penalties, and interest owed;
    5. Be returned with payment of the amount owed and delinquent as reflected on the certified statement or account; and
    6. Be effective until the earlier of the following:
      1. The date the certified statement or account is paid in full; or
      2. One (1) year from the date the certified statement or account is presented for payment under this section.
  3. A person shall not be compelled to pay the following:
    1. Any amount before it is due and owing to the delinquent taxpayer; or
    2. A greater amount than is owed to the delinquent taxpayer.
3. 1. A person making a payment to a county collector under this section is not liable to the delinquent taxpayer to which the person is indebted for complying with a demand for payment under this section.
  2. A payment made under this section is considered to be made to the delinquent taxpayer and satisfies any contractual obligation or indebtedness due and owing the delinquent taxpayer by the person making the payment on the certified statement or account for the amount expressed on the county collector's receipt.
1. The purpose of this subchapter is to establish as policy that all claimant agencies and the Revenue Division of the Department of Finance and Administration shall cooperate in identifying debtors who:
  1. Qualify for refunds from the division; and
  2. Owe money to the state, to an Arkansas county, city, or town, or to a housing authority created under § 14-169-101 et seq., through its various claimant agencies.
2. It is also the intent of this subchapter that procedures be established for setting off against any such refund the sum of any debt owed to the state, to an Arkansas county, city, or town, or to a housing authority created under § 14-169-101 et seq.
1. All claimant agencies shall submit, for collection under the procedure established by this subchapter, all debts which they are owed, except in cases where the agencies are advised by the Attorney General not to submit a claim because the validity of the debt is legitimately in dispute, because an alternative means of collection is pending and believed to be adequate, or because such a collection attempt would result in a loss of federal funds.
2. As a condition precedent to setoff, all claimant agencies shall obtain the full name and Social Security number and submit this information to the Revenue Division of the Department of Finance and Administration and, whenever possible, also obtain and submit the address and any other identifying information required by rules promulgated by the division pursuant to the authority of § 26-36-320 for any person for which the claimant agencies provide any service or transact any business and who the claimant agencies can foresee may become a debtor under the terms of this subchapter.
1. 1. A claimant agency seeking to attempt collection of a debt through setoff shall notify, in writing, the Revenue Division of the Department of Finance and Administration and supply the debtor's name, Social Security number, and any other information necessary to identify the debtor whose refund is sought to be set off.
  2. Notification to the division and the furnishing of identifying information must occur on or before December 1 in the year preceding the calendar year during which the refund would be paid. Additionally, subject to the notification deadline specified, the notification shall be effective only to initiate setoff for claims against refunds that would be made in the calendar year subsequent to the year in which notification is made to the division.
2. 1. The division shall determine whether the debtor to the claimant agency is entitled to a refund.
  2. Upon determination by the division that a debtor specified by a claimant agency qualifies for such a refund and that a refund is pending, the division shall specify its sum and indicate the debtor's address as listed on the tax return.
  3. Each claimant agency must submit all claims for any year for collection under this subchapter to the division at one (1) time.
  4. Claims to be set off shall be submitted in a form compatible with the data processing equipment of the division, or the submitting claimant agency shall pay the actual cost of converting their list of claims to a form which can be used by the division for effecting setoff.
3. Unless stayed by court order, the division shall, upon certification as provided in this subchapter, set off the certified debt against the refund to which the debtor would otherwise be entitled.
1. The claimant agency shall provide written notice to the debtor whose debt has been certified to the Revenue Division of the Department of Finance and Administration of its intention to intercept the debtor's tax refund.
2. 1. The contents of the written notification to the debtor and the division's copy of the setoff claim shall clearly set forth:
    1. The basis for the claim to the refund;
    2. The intention to apply the refund against the debt to the claimant agency;
    3. The debtor's opportunity to give written notice of intent to contest the validity of the claim before the claimant agency within thirty (30) days of the date of the mailing of the notice;
    4. The mailing address to which the application for a hearing must be sent; and
    5. The fact that failure to apply for a hearing in writing within the thirty-day period will be deemed a waiver of the opportunity to contest the claim causing final setoff by default.
  2. The notification form shall be approved by the Secretary of the Department of Finance and Administration.
3. The written application by the debtor for a hearing shall be effective upon mailing the application postage prepaid and properly addressed to the claimant agency.
1. If a claimant agency receives written application of the debtor's intention to contest at hearing the claim upon which the intended setoff is based, it shall grant a hearing according to procedures established under the Arkansas Administrative Procedure Act, § 25-15-201 et seq. Additionally, it shall be determined at the hearing whether the claimed sum asserted as due and owing is correct, and if not, an adjustment to the claim shall be made.
2. Pending final determination at hearing of the validity of the debt asserted by the claimant agency, no action shall be taken in furtherance of collection through the setoff procedure allowed under this subchapter.
3. No issues may be considered at the hearing which have been previously litigated.
1. Upon final determination, through hearing provided for by this subchapter, of the debt due and owing the claimant agency or upon the debtor's default for failure to contest the claimant agency's right to setoff as provided for in this subchapter, mandating timely request for review of the asserted basis for setoff, the Revenue Division of the Department of Finance and Administration shall hold for setoff any refund as defined in this subchapter determined to be available to the individual debtor.
2. Any changes to the original debt certified will be accepted only if the new amount is less than the debt originally certified. Such changes will be forwarded to the division in writing and in a format acceptable to the division. Debtors' names may be deleted from the debt certification listing upon written notice to the division by the claimant agency.
3. Upon determination that a refund is available to a debtor who has previously been certified as owing a debt to the claimant agency, the division shall finalize the setoff by transferring the refund amount, up to the amount of the debt certified, to the claimant agency and by refunding any remaining balance to the debtor.
1. When a taxpayer who is a debtor as defined in this subchapter has filed a joint return for which he or she is due a refund or has filed a separate return on the same form resulting in a joint refund, the entire amount of the refund shall be subject to setoff.
2. 1. The Secretary of the Department of Finance and Administration shall notify each taxpayer due a joint refund of the amount and the date of a proposed setoff for a debt certified by a claimant agency to the Revenue Division of the Department of Finance and Administration.
  2. The notice under subdivision (b)(1) of this section shall be in writing and sent to the address listed on the taxpayer's most recently filed income tax return.
3. 1. 1. A taxpayer who claims that he or she is not a debtor of a claimant agency may seek administrative relief by filing a written protest under oath within thirty (30) days after the notice under subdivision (b)(1) of this section is received.
    2. The written protest shall be signed by the nondebtor taxpayer or the nondebtor taxpayer's authorized agent and include the nondebtor taxpayer's reasons for opposing the proposed setoff.
  2. The nondebtor taxpayer may request the secretary to consider his or her request for relief upon written documents furnished by the nondebtor taxpayer or upon the written document and the evidence produced by the nondebtor taxpayer at a hearing conducted under the Arkansas Tax Procedure Act, § 26-18-101 et seq.
  3. The nondebtor taxpayer's protest shall include documentation supporting the proportionate share of the nondebtor taxpayer's payment of tax and the resulting amount of the joint refund that the nondebtor taxpayer claims is not subject to setoff.
4. A nondebtor taxpayer who requests the secretary to render his or her decision based on written documents is not entitled by law to any other administrative hearing before the secretary's rendering of his or her decision.
5. Administrative relief shall not be available to a nondebtor taxpayer who fails to protest a proposed setoff within the thirty (30) days after the notice under subdivision (b)(1) of this section is received.
6. 1. If a taxpayer requests a hearing in person rather than on written documents, a hearing officer shall set the time and place for hearing on the written protest and shall give the nondebtor taxpayer reasonable notice of the hearing.
  2. At the hearing, the nondebtor taxpayer may be represented by an authorized representative and may present evidence in support of his or her position.
  3. After the hearing, the hearing officer shall render his or her decision in writing and shall serve copies upon both the nondebtor taxpayer and the claimant agency.
7. The hearings on written protests and determinations made by the hearing officer are not subject to the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
8. 1. After the issuance and service on the taxpayer of a decision of the hearing officer to sustain the setoff of the joint refund, a nondebtor taxpayer may seek judicial relief from the decision by filing suit within thirty (30) days after the date of the final determination of the hearing officer.
  2. Jurisdiction for a suit to contest a determination of the hearing officer under this section shall be in the Pulaski County Circuit Court or the circuit court of the county where the nondebtor taxpayer resides, and the matter shall be tried de novo.
9. This section is the sole means by which a nondebtor taxpayer may challenge a proposed setoff for the benefit of a claimant agency.
1. Upon effecting final setoff, the Revenue Division of the Department of Finance and Administration shall periodically write checks to the respective claimant agencies for the net proceeds collected on their behalf.
2. 1. 1. For purposes of this subchapter, except as provided under subdivision (b)(1)(B) of this section, five percent (5%) of the proceeds collected by the division through setoff shall represent the division's cost of effecting setoff, and these costs shall be charged to the respective claimant agency as a collection assistance fee.
    2. If the claimant agency is a circuit court, county court, district court, or city court, or a housing authority created under § 14-169-101 et seq., ten percent (10%) of the proceeds collected by the division through setoff shall represent the division's cost of effecting setoff and shall be charged to the respective circuit court, county court, district court, or city court, or housing authority as a collection assistance fee.
  2. The collection assistance fees paid to the division shall be deposited into the State Treasury for credit to the Constitutional Officers Fund and the State Central Services Fund.
1. 1. Simultaneously with the transmittal of a check for net proceeds collected to a claimant agency, the Revenue Division of the Department of Finance and Administration shall provide the claimant agency with an accounting of the setoffs finalized for which payment is being made.
  2. The accounting shall, whenever possible, include:
    1. The full names of the debtors;
    2. The debtors' Social Security numbers;
    3. The gross proceeds collected per individual setoff;
    4. The net proceeds collected per setoff; and
    5. The collection assistance fee charged per setoff.
2. Upon receipt by a claimant agency of a check representing net proceeds collected on a claimant agency's behalf by the division and an accounting of the proceeds as specified under this section, the claimant agency shall credit the debtor's obligation with the gross proceeds collected.
1. Notwithstanding § 26-18-303 or any other provisions of law prohibiting disclosure by the Revenue Division of the Department of Finance and Administration of the contents of taxpayer records or information and notwithstanding any confidentiality statute of any claimant agency, all information exchanged among the division, claimant agency, and the debtor which is necessary to accomplish and effectuate the intent of this subchapter is lawful.
2. The information obtained by a claimant agency from the division in accordance with the exemption allowed by subsection (a) of this section shall only be used by a claimant agency in the pursuit of its debt collection duties and practices, and any person employed by or formerly employed by a claimant agency who discloses any such information for any other purpose, except as otherwise allowed by § 26-18-303, shall be penalized in accordance with the terms of that statute.
1. The Secretary of the Department of Finance and Administration may enter into an agreement with the Internal Revenue Service to setoff state income tax refunds to satisfy a past-due and legally enforceable debt to the Internal Revenue Service.
2. This subchapter shall apply to the setoff authorized by this section, except to the extent that any provision conflicts with this section.
3. In addition to the applicable requirements and procedures under this subchapter, a setoff is not allowed for debts to the Internal Revenue Service unless the Internal Revenue Service complies with all notice and procedural requirements under federal law concerning the levy of a state tax refund.
4. The setoff and payment to the Internal Revenue Service of an income tax refund due to a taxpayer in this section shall be made from a refund amount due to the taxpayer after the setoff of the taxpayer's refund to claimant agencies other than the Internal Revenue Service.
1. 1. 1. All lands upon which the taxes have not been paid for one (1) year following the date the taxes were due, October 15, shall be forfeited to the state and transmitted by certification to the Commissioner of State Lands for collection or sale.
    2. The Commissioner of State Lands may accept an electronic certification of tax-delinquent parcels from a county.
  2. Tax-delinquent lands shall not be sold at the county level.
2. The county collector shall hold all tax-delinquent lands in the county for one (1) year after the date of delinquency, and, if the lands are not redeemed by the certification date, which shall be no later than July 1 of the following year, the county collector shall transmit it to the state by certification, after notice as provided in this chapter, indicating all taxes, penalties, interest, and costs due and the name and last known address of the owner of record of the tax-delinquent lands.
3. Upon receipt of the certification, title to the tax-delinquent lands shall vest in the State of Arkansas in care of the Commissioner of State Lands.
1. The county collector in each county shall, not less than thirty (30) days nor more than forty (40) days prior to the certification of the land, publish in a newspaper of general circulation in the county:
  1. A list of real property not previously redeemed;
  2. The names of the owners of record;
  3. The amount of the taxes, penalties, interest, and costs necessary to be paid to redeem the property;
  4. The date upon which such period of redemption expires; and
  5. Notice that unless the property is redeemed prior to the expiration of the period of redemption, the lands will be forfeited to the state.
2. Fees for the publication shall be the same as set forth in § 26-37-107.
1. Prior to certification to the Commissioner of State Lands, the county assessor shall:
  1. Verify the assessment to establish value on all parcels to be certified;
  2. Verify the name and last known address of the owner of record of the tax-delinquent land; and
  3. Determine whether the tax-delinquent land exists.
2. If the land is found to be nonexistent, the county assessor shall remove the delinquent entry from the assessment rolls.
3. No tax-delinquent lands shall be certified to the Commissioner of State Lands without the county assessor's verification.
1. All costs of notice shall be added to the costs to be collected from the purchaser or redeemer.
2. Costs of notice shall include, but not be limited to, certified mail costs, newspaper and catalog costs, and title work.
1. The Commissioner of State Lands may charge a collection fee for each deed issued by the Commissioner of State Lands, whether the land is redeemed or sold.
2. The collection fee under this section shall be established by rule adopted by the Commissioner of State Lands.
3. 1. However, the collection fee under this section shall not exceed the costs expended by the Commissioner of State Lands in producing or filing the deed.
  2. As used in subdivision (c)(1) of this section, “costs” means the actual costs expended by the Commissioner of State Lands plus three percent (3%) of the actual costs expended by the Commissioner of State Lands.
1. 1. The county collectors of this state shall cause a list of the delinquent lands in their respective counties, as corrected by the county collectors, to be entered in a permanent record appropriately labeled.
  2. The list shall be a permanent public record and open to the inspection of the public at all times.
2. The county officer designated by the quorum court under § 26-28-102 shall certify that the total amount of tax-delinquent lands in the permanent record under subsection (a) of this section is equal to the credit allowed the county collector for tax-delinquent lands on the current tax settlement.
3. The record, so certified, shall be evidence of the facts contained in the list and certificate.
1. 1. 1. The county collectors of this state shall cause the list of the delinquent lands in their respective counties to be prepared and a copy of the list to be delivered to a legal newspaper of the county by no later than December 1 of each year.
    2. 1. Within seven (7) days thereafter, the newspaper shall publish the list.
      2. The newspaper shall publish the list in at least seven-point type.
    3. If the newspaper regularly publishes a total market coverage edition or supplement publication that has wider circulation within the county or district, the newspaper may publish the list in that edition or publication.
  2. If there is no newspaper in the county or district, the publication shall be in the nearest newspaper having a general circulation in the county or district for which the list is being published.
  3. The list of delinquent lands shall contain at least the name of the owner and the legal description of the property as was recorded on the tax book.
2. The publication shall be in substance as follows:
3. 1. The legal fee for each required publication of delinquent real property tax lists shall be one dollar and fifty cents ($1.50) per tract per insertion.
  2. The fee shall be added as costs of forfeiture and shall be paid by the county collector from any moneys in the county collector's possession derived from the payment of real property taxes.
  3. The receipts for the payment, verified by the certificate of the county clerk as to its correctness, shall entitle the county collector to a credit for the amount so paid.
4. The requirements of this section do not apply to delinquent taxes on mineral interests, which shall comply with the requirements stated in § 26-36-213.
1. 1. A county collector may charge a fee of two dollars and fifty cents ($2.50) for the issuance of each certificate of land redemption for each parcel of tax-delinquent land redeemed in the county collector's office.
  2. The fee under this subsection shall be deposited into the county general fund.
2. The county collector shall accept payment for the redemption of tax-delinquent land that has not been transferred to the Commissioner of State Lands.
3. The county collector shall pay over to the county treasurer on the first of each month or within ten (10) days thereafter all amounts collected under this section. However, upon a certificate of distribution of the amounts collected under this section being prepared by the county clerk or county collector, which certificate of distribution shall be issued on or before the thirtieth day of each month, the county treasurer shall transfer to the various funds the amount due each fund, such as the county, school, or municipality fund, from the amounts collected under this section.
1. 1. The Commissioner of State Lands shall publish a notice of sale of land upon which the ad valorem property taxes have not been paid in a newspaper having general circulation in the county where the land is located.
  2. 1. The publication fee for the notice shall be adopted by rule of the Commissioner of State Lands.
    2. 1. However, the fee under this section shall not exceed the costs expended by the Commissioner of State Lands in producing, filing, or performing the deed.
      2. As used in subdivision (a)(2)(B)(i) of this section, “costs” means the actual costs expended by the Commissioner of State Lands plus three percent (3%) of the actual costs expended by the Commissioner of State Lands.
2. The notice shall:
  1. Contain the assessed value of the land;
  2. Contain the amount of taxes, interest, penalties, and other costs due on the land;
  3. 1. Contain the name of the owner, the legal description, and parcel number of the land.
    2. A part or abbreviated legal description shall be sufficient in the notice if the name of the owner and parcel number are listed;
  4. Contain a list of all interested parties; and
  5. Indicate that the land will be sold to the highest successful bidder if the bid is equal to at least the amount of delinquent taxes, penalties, interest, and the costs of the sale.
3. The successful bidder shall pay all taxes, interest, penalties, and other costs.
4. 1. Failure of the notice to contain the information required in subsection (b) of this section does not invalidate an auction sale of the land unless an owner or interested party did not receive notice in substantial compliance with § 26-37-301.
  2. Only an owner or interested party that fails to receive notice in substantial compliance with § 26-37-301 may challenge the validity of the publication notice.
5. As used in this subchapter, “owner” and “interested party” mean the same as defined in § 26-37-301.
1. 1. Bidders may bid at the sale or mail their bid to the office of the Commissioner of State Lands.
  2. Bids shall be delivered at the appropriate place before the deadline established in the notice of the sale.
2. 1. If at the scheduled public sale a person or entity does not bid at least the amount of delinquent taxes, penalties, interest, and the costs of the sale, the Commissioner of State Lands may offer to sell tax-delinquent land at a post-auction private sale.
  2. 1. If tax-delinquent land is offered at a post-auction private sale within the first two (2) years following the public sale under subdivision (b)(1) of this section, the tax-delinquent land shall be offered for at least the amount of the delinquent taxes, penalties, interest, and the costs of the sale.
    2. If tax-delinquent land is offered two (2) years or more following the public sale under subdivision (b)(1) of this section, the sale of the tax-delinquent land may be negotiated at a price the Commissioner of State Lands determines to be in the best interest of the state and the local taxing units.
  3. The Commissioner of State Lands shall submit quarterly reports to the Legislative Council or, if the General Assembly is in session, the Joint Budget Committee, listing all tax-delinquent land sold at a post-auction private sale under this section.
3. 1. Except as provided in subdivision (c)(2) of this section, the Commissioner of State Lands shall conduct tax-delinquent sales in the county where the land is located.
  2. If the Commissioner of State Lands determines that sufficient parcels of land located in one (1) county do not exist to justify a single sale in one (1) county, the Commissioner of State Lands may hold a tax-delinquent land sale in one (1) location and sell land located in more than one (1) county if the counties are adjoining counties.
4. The sales shall be conducted on the dates specified in the notices required by this subchapter.
5. 1. After a sale of the land by the Commissioner of State Lands, including a post-auction private sale, the Commissioner of State Lands shall notify the owner and all interested parties of the right to redeem the land within ten (10) days, excluding Saturdays, Sundays, and legal holidays, after the date of the sale by paying all taxes, penalties, interest, and costs due, including the cost of the notice.
  2. The notice under subdivision (e)(1) of this section shall be sent by regular mail to the last known address of the owner and all interested parties.
  3. If the land is not redeemed, a limited warranty deed shall be issued by the Commissioner of State Lands to the purchaser.
6. As used in this section, “interested party” has the same meaning as in § 26-37-301.
1. If the tax-delinquent land is sold, the Commissioner of State Lands shall convey the tax-delinquent land by issuing a limited warranty deed to the land.
2. 1. Except as provided in subdivision (b)(2) of this section, an action to contest the validity of a conveyance under this section or a negotiated sale under § 26-37-202 is barred if not commenced within ninety (90) days after the date of the conveyance.
  2. A cause of action by a person suffering a mental incapacity, a minor, or a person serving in the United States Armed Forces during time of war during the ninety-day period under subdivision (b)(1) of this section is barred if not commenced within two (2) years after the disability is removed, the minor reaches majority, or the person is released from active duty with the United States Armed Forces during time of war.
3. A deed issued after January 1, 1987, by the Commissioner of State Lands is not void or voidable on the ground that the county did not strictly comply with the laws governing tax-delinquent land.
4. This section does not prevent a taxpayer from contesting the validity of a deed issued by the Commissioner of State Lands on the ground that taxes have actually been paid.
1. In the event the sale is set aside by legal action or if the land is proven to be nonexistent or double assessed, the purchaser shall be entitled to reimbursement of moneys paid.
2. The Commissioner of State Lands shall have the authority to set aside any sale. In the event the Commissioner of State Lands determines that a sale shall be set aside, the purchaser may be entitled to reimbursement of moneys paid to the Commissioner of State Lands.
3. In cases where sales may be set aside by the Commissioner of State Lands or by legal action by the record owner or the heirs or assigns of the record owner, the record owner or the heirs or assigns of the record owner shall pay all back taxes, penalties, interest, and costs charged against the land.
4. If the Commissioner of State Lands determines that the owner and all interested parties did not receive the required notice of sale and right to redeem, the Commissioner of State Lands shall:
  1. Set aside the sale; or
  2. Notify the owner and interested parties of the reasons why the Commissioner of State Lands does not believe the sale should be set aside.
5. As used in this section, “interested party” means the same as in § 26-37-301.
6. The Commissioner of State Lands shall not be liable for any monetary damages to any owner, interested party, or purchaser of tax-delinquent land for any action taken or any omission of action related to the sale of tax-delinquent land.
7. An owner or interested party shall tender cash or certified funds, including without limitation a money order, cashier's check, or certified bank check equal to the amount of all taxes, penalties, interest, and costs charged against the tax-delinquent land:
  1. Into the registry of the court before filing a complaint, counterclaim, cross-claim, third-party complaint, or any other pleading to set aside a sale of the tax-delinquent land; or
  2. With the Commissioner of State Lands upon request by the Commissioner of State Lands before asking the Commissioner of State Lands to set aside a sale of the tax-delinquent land.
1. All moneys collected by the Commissioner of State Lands from the sale or redemption of tax-delinquent lands shall be distributed as follows:
  1. 1. First, to the Commissioner of State Lands, the penalties, the collection fees, the sale costs, and the other costs as prescribed by law.
    2. The sale costs include without limitation fees for title work;
  2. Second, to each county an amount equal to the taxes due plus interest and costs to the county as certified by the county collector, which amount shall be held in an escrow fund administered by and remitted to the county within one (1) calendar year of the receipt of the moneys by the Commissioner of State Lands;
  3. 1. Third, to each county an amount equal to the delinquent personal property taxes, plus penalty, of the owner or owners of the tax-delinquent land as certified by the county collector, which amount shall be held in an escrow fund administered by and remitted to the county after one (1) calendar year of the receipt of the moneys by the Commissioner of State Lands.
    2. The Commissioner of State Lands shall review the information provided by the county collector and any other interested party to ascertain:
      1. Whether the personal property tax and penalty qualifies to be withheld from the tax-delinquent land sale proceeds; and
      2. The amount of personal property tax and penalty that qualifies under this subdivision (a)(3) to be withheld.
    3. If the Commissioner of State Lands is required to make a refund of the personal property taxes withheld under subdivision (a)(3)(A) of this section to a purchaser of tax-delinquent lands for any reason, the amount of the refund shall be recovered by the Commissioner of State Lands from the county or counties that originally received the proceeds under this subdivision (a)(3) of the tax-delinquent land sale.
    4. The Commissioner of State Lands shall promulgate rules and forms needed to administer this subdivision (a)(3).
    5. This section does not require the Commissioner of State Lands to search county records to determine whether an owner of tax-delinquent land owes delinquent personal property taxes.
    6. This section does not grant a county a right to a lien against real property for the payment of delinquent personal property tax;
  4. 1. Fourth, to the Department of Finance and Administration an amount equal to the delinquent tax, penalty, and interest owed to the department and for which certificates of indebtedness have been filed against the owner or owners of the tax-delinquent land as certified by the department, which amount shall be held in an escrow fund administered by and remitted to the department within one (1) calendar year after the receipt of the moneys by the Commissioner of State Lands.
    2. If the Commissioner of State Lands is required to make a refund of the taxes withheld under subdivision (a)(4)(A) of this section to a purchaser of tax-delinquent lands for any reason, the amount of the refund shall be recovered by the Commissioner of State Lands from the department from the proceeds originally received under this subdivision (a)(4).
    3. The Commissioner of State Lands shall promulgate rules and forms needed to administer this subdivision (a)(4);
  5. 1. Fifth, to each county an amount equal to the delinquent solid waste assessments, plus penalty and interest, of the owner or owners of the tax-delinquent land as certified by the county collector, which amount shall be held in an escrow fund administered by and remitted to the county after one (1) calendar year of the receipt of the moneys by the Commissioner of State Lands.
    2. The Commissioner of State Lands shall review the information provided by the county collector and any other interested party to ascertain:
      1. Whether the amount of delinquent solid waste assessment and penalty and interest qualifies to be withheld from the tax-delinquent land sale proceeds; and
      2. The amount of delinquent solid waste assessment and penalty and interest that qualifies under this subdivision (a)(5) to be withheld.
    3. If the Commissioner of State Lands is required to make a refund of the delinquent solid waste assessment withheld under subdivision (a)(5)(A) of this section to a purchaser of tax-delinquent lands for any reason, the amount of the refund shall be recovered by the Commissioner of State Lands from the county or counties that originally received the proceeds under this subdivision (a)(5) of the tax-delinquent land sale.
    4. The Commissioner of State Lands shall promulgate rules and forms needed to administer this subdivision (a)(5).
    5. This section does not require the Commissioner of State Lands to search county records to determine whether an owner of tax-delinquent land owes delinquent solid waste assessments.
    6. This section does not grant a county a right to a lien against real property for the payment of delinquent solid waste assessment; and
  6. Sixth, to be placed in another escrow fund administered by the Commissioner of State Lands, the remainder, if any.
2. If no actions are brought within the time limits prescribed under this subchapter, the remaining funds, if any, shall be distributed by the Commissioner of State Lands as follows:
  1. 1. Ten percent (10%) of the remaining funds up to a maximum amount of five hundred dollars ($500) shall be paid to the Commissioner of State Lands for the administration of the distribution of the funds.
    2. However, the amount paid to the Commissioner of State Lands under this subdivision (b)(1) shall not be a sum less than the amount necessary to pay filing fees required to record any deeds;
  2. 1. After payment is made to the Commissioner of State Lands pursuant to subdivision (b)(1) of this section, the amount left in the remaining funds shall be paid to the former owners of the tax-delinquent land.
    2. 1. “Former owner” means a person, partnership, corporation, or other legal entity capable of owning real property in the State of Arkansas and that holds record title to the real property on the date of sale by the Commissioner of State Lands.
      2. “Former owner” does not include heirs or relations beyond the first degree of consanguinity.
    3. 1. A former owner must file an application with the Commissioner of State Lands requesting the release of the funds.
      2. The application shall be provided by the Commissioner of State Lands and shall require proof of ownership of the tax-delinquent land as well as proof of authority to act on behalf of the owner.
      3. The application may require other information the Commissioner of State Lands deems necessary before the release of the funds.
    4. 1. The former owner shall release and relinquish all rights, title, and interests in and to the tax-delinquent land.
      2. The Commissioner of State Lands shall provide a release deed to the former owner to execute.
    5. In the event of any dispute, claim, multiple claims of ownership, controversy regarding the release of the funds, or claim not expressly permitted under this section, the Commissioner of State Lands may require the party or parties to provide a court order to resolve the issues and to establish the party or parties entitled to the remaining funds.
    6. An agreement by a former owner, the primary purpose of which is to locate, deliver, recover, or assist in the recovery of remaining funds, is enforceable only if the agreement:
      1. Is in writing;
      2. Clearly sets forth the nature of the property and the services to be rendered;
      3. Provides a fee of not more than ten percent (10%) of the recovery;
      4. Is signed by the former owner; and
      5. States the value of the remaining funds before and after the fee or other compensation has been deducted.
    7. 1. An agreement covered by subdivision (b)(2)(F) of this section that provides for compensation that is unconscionable is unenforceable except by the former owner.
      2. A former owner who has agreed to pay compensation that is unconscionable may maintain an action to reduce the compensation to a conscionable amount.
      3. The court may award reasonable attorney's fees to a former owner that prevails in the action.
    8. Subdivision (b)(2)(G) of this section does not preclude a former owner from asserting that an agreement covered by subdivision (b)(2)(F) of this section is invalid on grounds other than unconscionable compensation.
    9. 1. The Commissioner of State Lands shall make all funds payable to the former owner.
      2. No funds shall be made payable to any other person or entity other than the former owner without a court order directing the payment to the other person or entity.
      3. No interest shall be paid to the former owner on the funds.
    10. 1. Anyone filing a claim or assisting with the filing of a claim that results in the erroneous payment of a claim is responsible for the repayment of all funds paid.
      2. Any claim filed fraudulently is punishable as a Class D felony; and
  3. 1. Any funds placed in escrow prior to July 1, 2005, shall be held in escrow for five (5) years and at the end of the five-year period, if the funds have not been distributed, the escrow funds shall escheat by operation of law to the county in which the property is located.
    2. Any funds placed in escrow on and after July 1, 2005, but before July 1, 2018, shall be held for three (3) years, and at the end of the three-year period, if the funds have not been distributed, the escrow funds shall escheat by operation of law to the county in which the property is located.
    3. Any funds placed in escrow on and after July 1, 2018, shall be held for two (2) years, and at the end of the two-year period, if the funds have not been distributed, the escrow funds shall escheat by operation of law to the county in which the property is located.
3. All funds distributed to each county by the Commissioner of State Lands from the redemption or sale of tax-delinquent lands, including any interest and costs, are to be distributed to the applicable taxing units where the delinquent land is located within the county in the manner and proportion that the taxes would have been distributed if they had been collected in the year due.
4. All funds received by a county from the redemption of tax-delinquent land at the county level, including any penalty, interest, and costs, are to be distributed to the applicable taxing units where the delinquent land is located within the county in the manner and proportion that the taxes would have been distributed if they had been collected in the year due.
5. This section shall be severable, and if any phrase, clause, sentence, or provision of this section is declared to be contrary to the laws of this state, the validity of the remainder of this section shall not be affected.
1. 1. A purchaser under this chapter of any land or town lot or city lot or another person claiming under the purchaser shall not be entitled to any compensation for any improvement that the purchaser shall make on the land or town lot or city lot within the time frame established in § 26-37-203, except for:
    1. The cost of repairs necessary to prevent deterioration of any improvements on the land or town lot or city lot; or
    2. The cost necessary to comply with any state, county, or city code requirements.
  2. The compensation allowed under subdivision (a)(1) of this section shall be a charge upon the land.
2. For an improvement made after the expiration of the time frame established in § 26-37-203, the purchaser under this chapter shall be allowed the full cash value of the improvement, and the allowance shall be a charge upon the land.
1. If a timber right, an oil right, a gas right, or a mineral right is owned or assessed separate from the fee in the land and the taxes due on the right are not paid, the timber right, oil right, gas right, or mineral right is subject to the tax laws governing forfeiture and sale of tax-delinquent land.
2. Any timber right, oil right, gas right, or mineral right forfeited and certified to the Commissioner of State Lands is subject to disposition as provided in this chapter.
1. If an owner of land dedicates the land to the city where the land is located for park purposes by a filed and recorded plat and bill of assurance, the city approves the dedication, and there are any delinquent general taxes of the state or a political subdivision of the state against the land, upon a showing that title to the land is dedicated to the city as a public park and the city has approved the dedication, the Commissioner of State Lands and the proper county officials of the county where the land lies shall cancel any delinquent general taxes.
2. If the city fails or refuses to approve a dedication of land for park purposes within one (1) year of receiving notice of the dedication, the land shall revert to the owner of the land or the owner's heirs, successors, and assigns.
1. The Commissioner of State Lands shall keep a permanent record of all lands forfeited to the state for taxes and note in the record in whose name the forfeited land was listed, for what year or years it was taxed, the amount of tax due thereon, and when forfeited.
2. The record shall be open to the inspection of anyone.
1. 1. Except as provided in § 26-37-204(a) and (b), the Commissioner of State Lands and the county from which tax-delinquent real property is certified shall be immune from liability for damages, costs, fees, or compensation for improvements made to the tax-delinquent real property.
  2. Subdivision (a)(1) of this section applies whether or not the sale is found to be invalid or void as a result of error by the Commissioner of State Lands or the county.
2. The Commissioner of State Lands is immune from liability for damages, costs, fees, and compensation arising from work undertaken by a town or city to correct, remove, or abate a condition concerning tax-delinquent real property certified to the Commissioner of State Lands that violates local codes or ordinances.
1. 1. After receiving tax-delinquent land, the Commissioner of State Lands shall notify the owner, at the owner's last known address as certified by the county, by certified mail, of the owner's right to redeem by paying all taxes, penalties, interest, and costs, including the cost of the notice.
  2. All interested parties, as identified by the Commissioner of State Lands, shall be sent notice of the sale from the Commissioner of State Lands by certified mail.
  3. If the notice by certified mail is returned unclaimed or refused, the Commissioner of State Lands shall mail the notice to the owner or interested party by regular mail.
  4. If the notice by certified mail is returned undelivered for any other reason, the Commissioner of State Lands shall send a second notice to the owner or interested party at any additional address reasonably identifiable through the examination of the real property records properly filed and recorded in the office of the county recorder where the tax-delinquent land is located as follows:
    1. The address shown on the deed to the owner;
    2. The address shown on the deed, mortgage, assignment, or other filed and recorded document to the interested party; or
    3. Any other corrected or forwarding address on file with the county collector or county assessor.
2. The notice to the owner or interested party shall also:
  1. Contain a partial or abbreviated legal description and the parcel number;
  2. State that the tax-delinquent land will be sold if not redeemed prior to the date of sale; and
  3. 1. Provide the sale date.
    2. The sale date shall be no earlier than one (1) year after the tax-delinquent land is certified to the Commissioner of State Lands.
3. As used in this section, “owner” and “interested party” mean any person, firm, corporation, or partnership holding title to or an interest in the tax-delinquent land by virtue of a bona fide recorded instrument at the time of certification to the Commissioner of State Lands.
4. The Commissioner of State Lands shall not be required to notify by certified mail or by any other means a person, firm, corporation, or partnership whose title to or interest in the tax-delinquent land is:
  1. Obtained after certification to the Commissioner of State Lands; or
  2. Expired or barred or was released or otherwise terminated before the date of sale regardless of whether a bona fide recorded instrument reflects the termination of the title or interest.
5. 1. If the Commissioner of State Lands fails to receive proof that the notice sent by certified mail under this section was received by the owner of a homestead that is tax-delinquent land, then the Commissioner of State Lands or his or her designee shall provide actual notice to the owner of a homestead by personal service of process at least sixty (60) days before the date of sale.
  2. As used in this subsection:
    1. “Homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118; and
    2. “Owner of a homestead” means:
      1. Every owner if the homestead is owned by joint tenants; and
      2. Either the husband or the wife if the homestead is owned by tenants by the entirety.
  3. The owner of a homestead that is tax-delinquent land shall pay for the additional cost of the notice by personal service of process under this subsection.
6. The validity of a notice under this section may be challenged only by an owner or interested party of tax-delinquent land that did not receive notice in substantial compliance with this section.
1. To redeem tax-delinquent land with the county collector or the Commissioner of State Lands and to purchase tax-delinquent land at the Commissioner of State Lands' sale the redeemer or purchaser of tax-delinquent land shall pay all delinquent taxes, plus:
  1. Ten percent (10%) simple interest for each year of delinquency;
  2. A ten percent (10%) penalty for each year of the delinquency; and
  3. The costs incurred by the county and the Commissioner of State Lands.
2. The penalties and interest shall accrue beginning on October 16 in the year of delinquency.
3. Payment to redeem tax-delinquent land under this section shall be made by cash or certified funds, including without limitation a credit card, debit card, electronic check, escrow check, money order, cashier's check, or certified bank check if the redemption occurs:
  1. Within thirty (30) days before the date of the scheduled sale; or
  2. During the redemption period following the sale.
4. The Commissioner of State Lands may approve additional forms of payment by promulgation of rule.
1. If the owner redeems the tax-delinquent land, the Commissioner of State Lands shall issue a redemption deed and record it in the county wherein the land is located.
2. A redemption deed shall:
  1. Serve as proof that payment under § 26-37-302 has been received by the Commissioner of State Lands; and
  2. Not convey or change the legal ownership to the property redeemed.
3. The fee for the redemption deed and the fee for recording the deed shall be borne by the owner.
1. All lands forfeited to the state for nonpayment of taxes may, until disposed of by the state, be redeemed under this section.
2. To request redemption under subsection (a) of this section, a person shall submit the following to the Commissioner of State Lands:
  1. 1. An executed petition with a verified signature to redeem the property in a form prescribed by the Commissioner of State Lands.
    2. The Commissioner of State Lands shall make the petition form available upon request;
  2. Payment in an amount equal to the total of outstanding taxes, penalties, interest, fees, and costs owed at the time the petition is received by the Commissioner of State Lands; and
  3. Any additional documentation requested by the Commissioner of State Lands.
3. The total amount due under subdivision (b)(2) of this section shall not be raised or lowered for thirty (30) days after the date the redemption under subsection (a) of this section is requested, unless:
  1. The property has been sold;
  2. The records have been amended by a county; or
  3. The actual costs, fees, and taxes are added to the total amount due.
4. An updated petition to redeem shall be provided to the Commissioner of State Lands, if the date of the submission of the petition to redeem has expired or additional costs, fees, and taxes have accrued.
5. Petitions and payment in full received by the Commissioner of State Lands at least thirty (30) days before and no later than ten (10) days following the sale date shall be made in cash, certified funds, or as provided in § 26-37-302.
6. 1. Upon redemption, a redemption deed will be issued by the Commissioner of State Lands.
  2. The deed shall be forwarded to the circuit clerk of the county in which the land or lot conveyed by the deed is situated, to be filed of record.
  3. 1. The Commissioner of State Lands may establish by rule a fee for producing a redemption deed.
    2. 1. A fee under this subsection shall not be established in an amount that exceeds the costs expended by the Commissioner of State Lands in producing or filing the redemption deed or performing the services required to carry out the established duties of the office of the Commissioner of State Lands.
      2. As used in subdivision (f)(3)(B)(i) of this section, “costs” means the actual costs expended by the Commissioner of State Lands plus three percent (3%) of the actual costs expended by the Commissioner of State Lands.
7. The redemption deed shall serve as proof that payment has been received by the Commissioner of State Lands, in accordance with the provisions of § 26-37-302, and does not convey or change the legal ownership to the property redeemed.
8. Upon receipt of the redemption deed, the county collector shall extend on the tax book against the land or lot the taxes other than state and county for the years that the taxes have not been paid since the sale of the land or lot to the state, and these taxes shall be charged and collected as other taxes.
9. The proceeds of all redemptions of forfeited lands shall be divided between the county where the lands are situated and the state, as set forth in § 26-37-205, and paid over in the manner as required and provided in this section.
1. 1. Town and city lots and blocks and acreage tracts, lots, blocks, divisions, and subdivisions that have been platted and sold as being outside of the corporate limits of towns and cities, and rural lots and parcels of land now, or which may hereafter be, forfeited to the state for nonpayment of taxes due thereon that have depreciated in value since forfeiture may be reassessed at their present value by the county assessor of the county in which the lands are located, upon application being made in writing by the application to redeem or purchase them, setting forth the reasons for the reassessment. No application shall contain more than five (5) descriptive calls. Before any such reassessment shall be valid, it shall be presented to the county judge and the chief county school officer of the county in which the lands are located and approved by them in writing and made a matter of record in the county by the county clerk.
  2. The fee of the county assessor shall be one dollar ($1.00) for each application. The fee shall be paid to the county treasurer and credited by him or her to the county general revenue fund. The fee of the county clerk shall be the regular fee allowed by law and shall be paid by the applicant seeking reassessment.
2. 1. If the county assessor deems the assessment for which parcels of land were forfeited to be too high, he or she shall prepare a certificate stating that a reassessment has been made under this section and shall state, under oath, the cause for the depreciation in the value of the lots or parcels of land.
  2. The county assessor, the county judge, and the chief county school officer are prohibited from making any such reassessment as set out in this section except for the following causes:
    1. Burned buildings not replaced and on which the applicant did not collect insurance;
    2. Buildings removed and from which the applicant received no benefit;
    3. Erosion;
    4. Damage by flood;
    5. Damage by tornado;
    6. Removal of timber from which the applicant received no benefit; or
    7. Any act of God.
  3. When the reassessment has been made, a complete record thereof, including a certified copy of the application, the reassessment, and the court order, shall be forwarded to the Commissioner of State Lands, who shall, upon its receipt, enter it upon a record to be kept by him or her in his or her office for that purpose, and he or she shall issue redemption deeds or sale deeds for forfeited lands in the manner and form provided by law, based upon the reassessment value.
1. 1. When severed mineral interests are forfeited to the state and conveyed by certification to the Commissioner of State Lands for nonpayment of property taxes, title to the severed mineral interests shall vest in the State of Arkansas in the care of the Commissioner of State Lands.
  2. The Commissioner of State Lands shall so notify the owner of record by certified mail at his or her last known address.
  3. 1. Except as provided in subsection (b) of this section, the Commissioner of State Lands shall not sell the severed mineral interests but shall retain the severed mineral interests indefinitely for redemption.
    2. However, the severed mineral interests may be leased by the Commissioner of State Lands if he or she determines that a lease is in the best interest of the state.
    3. All benefits, including royalty and leasehold payments, accruing after title vests in the state and before redemption shall be payable to the Commissioner of State Lands.
    4. Upon receipt of any such benefits, the Commissioner of State Lands shall deposit the funds into financial institutions in this state.
  4. 1. The tax-delinquent severed mineral interests may be redeemed at any time in the manner prescribed for the redemption of tax-delinquent real property.
    2. However, upon redemption the owner shall not be entitled to any payments received by the Commissioner of State Lands before redemption.
  5. All funds derived from redemption shall be held in escrow by the Commissioner of State Lands for one (1) year, at which time they shall be distributed the same as funds derived from the redemption of real property.
2. 1. After the expiration of the redemption period prescribed by this chapter, the Commissioner of State Lands shall sell the severed mineral interests to the surface owners if the surface owners opt to purchase the tax-delinquent severed mineral interests.
  2. The surface owner purchasing severed mineral interests under subdivision (b)(1) of this section shall be allowed to purchase the severed mineral interests for an amount equal to the delinquent taxes and shall not be required to pay any interest or penalties if the surface owner was not the owner of the severed mineral interests at the time the taxes became delinquent.
3. All benefits, including royalty and leasehold payments, payable to the Commissioner of State Lands pursuant to this section are not subject to the provisions of § 18-28-201 et seq. and § 18-28-401 et seq.
4. The provisions of this section shall be applicable to all tax-delinquent severed mineral interests currently forfeited to the state and certified to the Commissioner of State Lands as well as to all tax-delinquent severed mineral interests forfeited to the state in the future.
5. 1. No deed issued under this section shall be void or voidable on the ground that the assessment of the property taxes on the severed mineral interests was not subjoined to the assessment of the property taxes on the surface realty.
  2. This subsection shall be retroactive to all certifications of delinquent severed mineral interests in the records of the office of the Commissioner of State Lands.
1. As used in this section, “homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118.
2. If an owner of a homestead did not receive actual notice of the sale of his or her homestead by the Commissioner of State Lands or his or her designee by personal service of process at least sixty (60) days before the date of the sale, then the owner of a homestead may redeem the tax-delinquent land by tendering all taxes, penalties, interests, and costs within ten (10) days, excluding Saturdays, Sundays, and legal holidays, after the date of the sale.
1. As used in this section, “homestead” means a parcel of tax-delinquent land certified to the Commissioner of State Lands that is identified by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118.
2. When a homestead is certified to the Commissioner of State Lands, the county collector shall provide notice to the Commissioner of State Lands that the tax-delinquent land is a homestead.
1. All sales of lands to the state for nonpayment of taxes for the year 1970 and all years prior thereto, which have not been certified to the Commissioner of State Lands and respecting which sales there is no record in the office of the Commissioner of State Lands, are canceled. The state releases all of its right, title, or interest in and to:
  1. All lands sold to the state for nonpayment of taxes for the year 1970 and all years prior thereto, to which lands the Commissioner of State Lands has executed deeds in favor of the grantees in such deeds, their heirs, successors, and assigns; and
  2. All such lands as have not been disposed of by the Commissioner of State Lands as aforesaid, but which lands have been placed back on the tax books of the counties wherein the lands lie, and the taxes have been paid thereon for more than seven (7) years since they were sold to the state.
2. The provisions of this section apply whether or not the lands were ever certified to the county clerk and whether or not the lands were certified by the county clerk to the Commissioner of State Lands.
1. As to all lands in the State of Arkansas which were sold to the state under the provisions of an act to enforce the payment of overdue taxes, Acts 1881, No. 39, approved March 12, 1881 [repealed], and an act amendatory thereto, approved March 22, 1881, to which the Commissioner of State Lands has executed deeds of donation, deeds of sale, or deeds of relinquishment, the state does release its title in favor of the grantees in these deeds, their heirs, successors, and assigns forever. As to all these lands that have not been disposed of by the Commissioner of State Lands as indicated but which have been placed back upon the tax books of the counties wherein the lands lie, and the taxes have been paid thereon for more than seven (7) years since they were sold to the state under the provisions of these acts, the state does release all of its title. These provisions apply whether the lands were certified by the commissioner of the court to the county clerk of the county, as required by these acts, or not, and also to apply whether the lands were certified by the county clerk to the Office of the Commissioner of State Lands, or not.
2. Any person, firm, or corporation owning or claiming any of these lands may obtain evidence of his or her title thereto having been quieted under the provisions of this section by presenting to the Commissioner of State Lands a certificate under the hand and seal of the county clerk of the county wherein the lands lie, showing that he or she or his or her grantors, direct or by mesne conveyances, have paid the taxes on the lands for the number of years stated since sold to the State of Arkansas under the provisions of these acts of the General Assembly, accompanied by the affidavit of the claimant or his or her agent, showing that he or she is the present owner or claimant and has not sold or conveyed the lands to any other person, firm, or corporation. The certificate and affidavit being filed in the office of the Commissioner of State Lands, the Commissioner of State Lands shall execute a deed of relinquishment of all of the right, title, and interest of the state acquired under these acts to the claimant, or his or her successors and assigns, forever, upon the payment of a deed fee of one dollar ($1.00).
1. 1. The county clerks are authorized and empowered to execute duplicate tax deeds to land sold for delinquent taxes, to or in the name of the original grantee in any tax deed which has been lost, mislaid, or destroyed, upon the fact being shown to the county clerk.
  2. 1. If fully satisfied from the evidence of the existence and loss of the original deed, the county clerk shall, on written application for that purpose, proceed to make, execute, and deliver, to or in the name of the original grantee, a good and sufficient deed of conveyance for any such tract of land or lot.
    2. The deed shall be good and valid in law to all intents and purposes as if the original had not been mislaid, lost, or destroyed.
2. The county clerks shall receive the sum of one dollar ($1.00) as their fee for the execution of each duplicate deed, as provided in this section, from the person applying therefor.
1. Upon the presentation of any void tax deed, showing upon its face that two (2) or more tracts of land were sold together when in fact the tracts were sold separately, to the county clerk of the county in which the lands were sold for taxes and the county clerk being satisfied from the records of his or her office that the several tracts of land contained in the deed were sold separately, the county clerk shall file the void deed in his or her office and cancel it. The county clerk shall thereupon execute in lieu thereof a deed for the tracts of land, reciting the execution of the former deed, and the date thereof, the error therein, that each tract was sold separately, and the amount for which the land was sold, and, in all other respects, conform to the requirement of law.
2. The deed when executed, as provided in subsection (a) of this section, shall relate back to the void deed and have the same force and effect, both in law and equity, as if executed on the same day.
1. Under and by virtue of a deed executed substantially by the county clerk, the party claiming title adverse to that conveyed by the deed shall be required to prove, in order to defeat the title, either that the real property was not subject to taxation for the years named in the deed, or that the taxes had been paid before the sale, that the property had been redeemed from the sale, according to the provisions of this act, and that such redemption was had or made for the use and benefit of persons having the right of redemption under the laws of this state; or that there had been an entire omission to list or assess the property, to levy taxes, to give notice of the sale, or to sell the property.
2. No person shall be permitted to question the title acquired by a deed of the county clerk without first showing that he or she, or the person under whom he or she claims title to the property, had title thereto, at the time of the sale, or that title was obtained from the United States, or this state, after the sale, and that all taxes due upon the property have been paid by such person, or the person under whom he or she claims title as aforesaid.
3. In any case where a person had paid his or her taxes, and through mistake, or otherwise, by the county collector, the land upon which the taxes were paid was afterward sold, the deed of the county clerk shall not convey the title.
4. In all cases where the owner of lands sold for taxes shall resist the validity of a tax title, the owner may prove fraud committed by the officer selling the land or in the purchaser to defeat the sale, and if fraud is so established, the sale and title shall be void.
1. If real property has been forfeited to the State of Arkansas and conveyed by certification to the Commissioner of State Lands for the nonpayment of taxes, the state or the purchaser, donee, or redemptor of the real property may file a suit for confirmation of title in the circuit court of the county where the real property lies, requesting that the title to the real property be confirmed and quieted in the State of Arkansas in care of the Commissioner of State Lands, or in the purchaser, donee, or redemptor of the real property in fee simple.
2. 1. A suit to confirm title in the State of Arkansas or in a purchaser, donee, or redemptor may be filed at any time after the conveyance by certification.
  2. The state may elect to file a suit for confirmation after conveyance from the state to a purchaser, donee, or redemptor.
  3. If a suit for confirmation is filed after a conveyance from the state, the decree of confirmation inures to the benefit of the purchaser, donee, or redemptor of the real property.
1. The Commissioner of State Lands on behalf of the State of Arkansas or the purchaser, donee, or redemptor of the real property from the state or the grantees of a purchaser, donee, or redemptor of the real property from the state shall file in the office of the clerk of the circuit court of the county in which the forfeited real property is situated a complaint requesting that title be quieted and confirmed to the real property described in the complaint.
2. 1. If the Commissioner of State Lands is the plaintiff, the Commissioner of State Lands shall attach to the complaint his or her certified list describing the real property and containing the years and the amounts for which the real property was forfeited.
  2. A purchaser, donee, or redemptor of real property from the state or the grantee of a purchaser, donee, or redemptor of the real property from the state shall attach to the complaint a copy of the limited warranty deed or other documentation evidencing the transfer of the real property from the state to the purchaser, donee, or redemptor or the grantee of a purchaser, donee, or redemptor of the real property from the state.
3. The complaint may include as many parcels of real property as the Commissioner of State Lands or the purchaser, donee, or redemptor of real property from the state or the grantee of a purchaser, donee, or redemptor of the real property from the state deems proper, so long as all parcels lie within the county.
4. 1. The certified list is all the proof that is required to show prima facie title in the state.
  2. A limited warranty deed or a donation deed is all the proof that is required to show prima facie title in a purchaser, donee, or redemptor or the grantee of a purchaser, donee, or redemptor of the real property from the state.
1. Upon filing a complaint under § 26-38-202, the plaintiff shall publish for four (4) consecutive weeks, one (1) time per week, in a newspaper having general circulation in the county wherein the real property is located, a notice calling on all persons, firms, corporations, or improvement districts that can set up any right to the real property so conveyed and forfeited to show cause why the title to the real property should not be confirmed, quieted, and vested in the plaintiff in fee simple.
2. The notice shall set forth the description of the real property and the name of the person, firm, or corporation that last paid the taxes on the real property.
1. A person, firm, corporation, or improvement district claiming an interest in a parcel of real property adverse to the plaintiff under § 26-38-202 shall join or be made a party and shall have the interest adjudicated in a suit under this subchapter.
2. If a person, firm, corporation, or improvement district claims that the conveyance of real property to the plaintiff was void, the person, firm, corporation, or improvement district shall tender to the clerk of the circuit court the amount of taxes, penalties, interest, and costs due and owing on the real property.
3. 1. If the person, firm, corporation, or improvement district made a party defendant to the proceeding under this section establishes a superior claim to all or part of the real property, the decree of the circuit court shall:
    1. Be rendered in favor of the party defendant, with respect to the affected real property;
    2. Order the defendant to pay all taxes, penalties, interest, and costs due on the affected real property;
    3. Order the Commissioner of State Lands to issue a deed of redemption to the party defendant for the affected real property; and
    4. Set aside the transfer from the state to the purchaser, donee, or redemptor of the affected real property.
  2. If the party defendant fails to establish a valid defense, an order so stating will be entered, and the party defendant will be allowed to recover the funds tendered to the clerk under subsection (b) of this section.
1. Except as provided in this section and § 26-37-203, the decree of the circuit court confirming the forfeiture and conveyance to the plaintiff under § 26-38-202 shall operate:
  1. As a complete bar at law and in equity of a claim or defense of all persons, firms, corporations, quasi-corporations, associations, trustees, and holders of beneficial interests to the title of the real property; and
  2. To vest the complete and indefeasible title to the real property in the plaintiff under § 26-38-202 and the plaintiff's grantees in fee simple, free and clear of all claims regardless of whether the forfeiture and conveyance is void or voidable because of a defect or irregularity in the proceedings to forfeit and convey the real property.
2. All parties have the right to appeal a decree of confirmation under this subchapter pursuant to the Arkansas Rules of Civil Procedure.
3. 1. The claim of a person, firm, corporation, quasi-corporation, association, trustee, or holder of a beneficial interest with a properly recorded interest in the real property that is not properly served with notice of the confirmation proceedings under this subchapter is barred if not commenced within:
    1. One (1) year of the posting of a notice of entry of the decree of confirmation under subdivision (c)(2) of this section; or
    2. Three (3) years from the date that the decree is entered if a notice of entry of the decree of confirmation under subdivision (c)(2) of this section is not posted.
  2. If a notice of entry of a decree of confirmation is posted under this subsection:
    1. The notice shall be posted conspicuously on the property; and
    2. A sworn affidavit evidencing the posting shall be filed with the circuit court in the quiet title action by the party that obtained title to the real property in the quiet title action.
1. Fees and costs associated with the filing of confirmation suits may be charged to any purchaser, donee, or redemptor to whose benefit the decree of confirmation inures.
2. The state shall be exempt from payment of court costs.
3. Fees for publication of notices required under this subchapter shall be governed by § 26-37-108 [repealed].
1. 1. Subject to the additional requirements of this section, this subchapter applies to severed mineral interests that are forfeited and conveyed to the state for the nonpayment of taxes.
  2. As used in this subchapter, “real property”, “parcel”, “parcels”, or “parcel of real property” includes without limitation a severed mineral interest.
2. 1. Upon filing a suit to confirm title in severed mineral interests, the plaintiff shall:
    1. Undertake a search of the records listed in § 18-60-502 to identify persons entitled to notice; and
    2. Provide notice to all persons that have or claim to have an interest in the severed mineral interests.
  2. The interested persons shall be:
    1. Summoned as defendants in the case; and
    2. Served in the manner required for other civil actions.
  3. At a minimum, the following persons shall be made defendants in a suit to confirm title to severed mineral interests:
    1. All lessors and lessees identified in a recorded and unreleased oil, gas, or mineral lease pertaining to the severed mineral interests;
    2. All persons identified in the county real estate or county tax records as an owner of the severed mineral interests immediately before forfeiture of the severed mineral interests for nonpayment of taxes; and
    3. All heirs, successors, and assigns of the persons described in subdivision (b)(3)(A) or subdivision (b)(3)(B) of this section, if the persons are deceased or have assigned or otherwise transferred their interest in the severed mineral interests.
3. 1. In any suit to confirm title in severed mineral interests, proof that the forfeiture or conveyance sought to be confirmed is void and not merely voidable is a conclusive defense to the suit.
  2. Proof that the forfeiture or conveyance sought to be confirmed is merely voidable but not void shall be considered by the court and determined on the facts as justice and equity requires.
1. 1. A county clerk, probate clerk, circuit clerk, county sheriff, county collector, or any other county official shall pay over to the county treasurer on the first of each month, or within ten (10) days thereafter, all funds in his or her possession belonging to the county or its subdivisions that are by law required to be paid into the county treasury, whether taxes, fines, or any moneys that are collected for any purpose by law and belonging to the county.
  2. Inmate commissary trust account balances belonging to the inmate and held by the county sheriff are not deemed county funds and are not subject to this section.
2. 1. This section does not mean that the county collector shall make a distribution of taxes to all funds but that he or she shall settle with the county treasurer in a lump sum, and the county treasurer shall credit it to the county collector's unapportioned account.
  2. Upon the issuance of a certificate of the county clerk or other county officer designated pursuant to § 26-28-102(a) that is issued on or before the thirtieth day of each month, the county treasurer shall transfer to the various funds ninety percent (90%) of the advance payments made by the county collector during the collecting period and, upon final settlement, the proper adjustments shall be made with the various accounts, and the balance remaining in the unapportioned account shall be distributed upon order of the county court approving the final settlement of the county collector.
1. The county collector shall pay into the State Treasury and the county treasury, in kind, all money collected by him or her, whether specie, United States paper currency, national bank notes, silver or gold certificates, or warrants or scrip, or check drawn on the county collector's account, as authorized by law to be received.
2. Every county collector or other officer who shall fail to comply with the provisions of this section shall:
  1. Be fined one hundred dollars ($100) for each violation;
  2. Be held liable on his or her official bond for the difference in value between the funds received and those paid; and
  3. Not be eligible to hold any office of trust in this state.
1. In like manner and time as provided in § 26-39-205 [repealed], the county sheriff or county collector shall be required to settle his or her accounts of all moneys received by him or her on account of taxes, fines, penalties, and judgments. They shall be entered of record, so as to show:
  1. What is due the state and county, respectively;
  2. From what officer received;
  3. From what branch of revenue; and
  4. The particular fund, if any, to which it belongs.
2. If any county collector shall fail to make settlement with the county court at the time required, he or she shall be attached until he or she makes a settlement. Immediately after settlement with the county court, the county clerk shall certify to the Auditor of State the amount due the state. The county collector shall, within fifteen (15) days, pay the sums into the State Treasury and, in ten (10) days, pay over to the county treasurer all sums due the county.
1. Whenever the county sheriff or county collector shall receive the amount due from any officer by voluntary payment or by the sale of goods and chattels, he or she shall give the officer duplicate receipts for it, stating therein:
  1. The whole amount received;
  2. How much for the state;
  3. How much for the county; and
  4. The particular fund to which it belongs.
2. The officer taking the receipts shall, without delay, deposit one (1) of the receipts with the county clerk.
1. The county clerk shall charge the county sheriff or county collector and county treasurer with all moneys that may come into their hands by virtue of any of the provisions of this subtitle.
2. 1. The money received for penalty and costs of advertising shall be first applied by the county sheriff or county collector to the cost of advertising delinquent lands, and the surplus, if any, paid into the county treasury at the time of his or her annual settlement.
  2. Should there not be sufficient penalty and costs of advertising to pay the cost of advertising delinquent lands, the balance shall be paid out of the county treasury.
1. Whenever the county court shall make a settlement with any officer, the substance thereof shall be entered of record so as to show separately:
  1. The whole amount received by the officer;
  2. The amount of commission allowed him or her;
  3. How much remains due to the state and how much to the county; and
  4. On what account each sum of money was received and to what particular fund, if any, it belongs.
2. All officers who shall have made settlements with the county courts as provided in this chapter shall immediately pay to the county treasurer the full amount with which they shall stand charged on their settlement. In default thereof, the county sheriff or county collector shall enforce the payment in the manner and by the means prescribed in this subtitle for enforcing the collection of taxes.
1. If any person chargeable shall neglect to render true accounts or settle as provided in this chapter, the county court shall adjust the accounts of the delinquent officer according to the best information that can be obtained and ascertain the balance due the county.
2. In these cases, the county court may refuse to allow any commission to the delinquent officer, and he or she shall moreover, without delay, pay into the county treasury the balance found due as indicated.
1. 1. The county court has the duty to reconsider and adjust the settlement of any county officer made with the county court, including, but not limited to, the final tax settlement and distribution for any error discovered within three (3) years from the date of the settlement.
  2. Adjustment of an error shall be made within the year of discovery.
2. Upon discovery of any error in the settlement after three (3) years, but within five (5) years from the date of the settlement, the county judge has the duty to petition the circuit court to obtain an order to correct the errors.
1. All county collectors' settlements shall be made and filed with the county courts on or before the fourth Monday of December each year.
2. 1. It is the duty of the county courts to pass upon the settlements of the county collectors and to approve, reject, or restate them on or before December 31 of each year.
  2. Failure of the county judge to so approve, reject, or restate the settlements of the county collector within this period of time shall constitute a misfeasance in office and shall be a violation punishable by a fine of one hundred dollars ($100) or removal from office.
1. If the tax settlement shall be found to be correct, the county court shall order the tax settlement spread in full upon the records of the county court.
2. 1. The county clerk or other county officer designated pursuant to § 26-28-102(a) shall certify to the Auditor of State, without delay, the action of the county court on the tax settlement, whether approved or rejected.
  2. If rejected, the county clerk or other county officer designated pursuant to § 26-28-102(a) shall immediately proceed to restate the tax settlement and again submit it to the county court.
1. Every county collector of the county revenue, having made settlement according to law of the county revenue received and collected by him or her, shall pay the amount found due from him or her into the county treasury, and the county treasurer shall give duplicate receipts therefor, one (1) of which shall be filed by the county collector in the office of the county clerk.
2. Every county collector or county sheriff who shall fail to make payment of the amount due from him or her on settlement, in the time and manner prescribed in this section, shall forfeit and pay to the county the sum of five percent (5%) per month on the sum wrongfully withheld, to be computed from the time the payment ought to have been made until actual payment, which may be recovered by suit on his or her official bond.
1. As used in §§ 26-26-1501 — 26-26-1504, 26-51-303, 26-51-407, 26-51-408, 26-52-305, and 26-53-110, unless the context otherwise requires:
  1. “Business corporation” means a corporation incorporated under the Arkansas Business Corporation Act, § 4-26-101 et seq.;
  2. “Financial institution” means a state bank or national bank, a savings and loan association, or a building and loan association as defined in this section;
  3. “National bank” means a bank chartered under the banking laws of the United States;
  4. “Savings and loan association” or “building and loan association” means any financial institution or association established and operating under the authority of § 23-37-101 et seq., § 23-37-706, or under any other appropriate state or federal law; and
  5. “State bank” means a bank, trust company, or savings bank chartered under the banking laws of this state.
2. 1. It is the purpose of §§ 26-26-1501 — 26-26-1504, 26-51-303, 26-51-407, 26-51-408, 26-52-305, and 26-53-110 to clarify the law relating to the taxation of state and national banks and savings and loan and building and loan associations chartered under state and federal law and to simplify and to broaden the tax base applicable to such financial institutions.
  2. It is the intent of §§ 26-26-1501 — 26-26-1504, 26-51-303, 26-51-407, 26-51-408, 26-52-305, and 26-53-110 to repeal the capital stock tax and, in lieu thereof, to tax state and national banks, savings and loan associations, and building and loan associations, under the existing tax laws generally applicable to business corporations.
1. 1. It shall be the duty of all persons, firms, and corporations, and all business establishments of every kind engaged in the wholesale business of selling merchandise in this state to furnish, upon the request in writing of the Secretary of the Department of Finance and Administration of this state, the names of any retailers or other persons to whom sales have been made, together with the amount of the sales for any given period, to be used by the secretary or his or her agents for the purposes of collecting the gross receipts, use, or other tax as may be due this state, but for no other purpose.
  2. The information provided for shall be furnished to the secretary within thirty (30) days.
  3. The authority given in this subsection is in addition to any and all authority existing by reason of any statute of this state.
2. Any wholesale concern selling merchandise in this state failing and refusing to give the information in writing, as requested by the secretary, is declared to be liable for any and all tax and penalty found to be due by the retailer for such period of time as is determined by the secretary in event the tax is not collectible from the retailer.
3. The provisions of this section shall apply to out-of-state wholesalers, their agents, solicitors, salespersons, or collectors. Any person, firm, corporation, solicitor, salesperson, agent, or collector who fails, neglects, or refuses to give the information so requested, in addition to being liable for tax and penalty found due, shall be guilty of aiding in evasion of the payment of such tax and, upon conviction in any court of this state, shall be fined in any sum not less than fifty dollars ($50.00) nor more than one thousand dollars ($1,000) for each offense.
1. Before each regular session of the General Assembly, the Secretary of the Department of Finance and Administration shall report to the Legislative Council and the Governor on the effect of each exemption, discount, credit, and deduction relating to state income tax and state sales and use tax.
2. 1. In preparing the report required under subsection (a) of this section, if actual data is not available, the secretary shall use available statistical data to estimate the effect of each exemption, discount, credit, and deduction.
  2. If the secretary concludes that the effect of an exemption, discount, credit, or deduction cannot be determined, the secretary shall include in the report a complete explanation of why he or she reached that conclusion.
3. The report required under subsection (a) of this section:
  1. Shall include:
    1. An analysis of each exemption, discount, credit, and deduction that reduces the amount of tax payable, including without limitation:
      1. An estimate of the loss of revenue for a six-year period beginning with the fiscal year in which the report is submitted; and
      2. A citation to the statutory or other legal authority for the exemption, discount, credit, or deduction; and
    2. For an exemption, discount, credit, or deduction that reduces revenue by more than one percent (1%) of the total revenue for the relevant tax, the effect of the exemption, discount, credit, or deduction on:
      1. The distribution of the tax burden by:
        
        Income class; and
        
        Industry or business class; and
      2. Total income by income class; and
  2. May include:
    1. An assessment of the intended purpose of each exemption, discount, credit, and deduction and whether the exemption, discount, credit, or deduction is achieving that purpose; and
    2. A recommendation for retaining, eliminating, or amending the law related to each exemption, discount, credit, and deduction.
4. 1. The secretary may request from any state officer or state agency information necessary to complete the report required under subsection (a) of this section.
  2. Each state officer and state agency shall cooperate with the secretary in providing information or analysis for the report required under subsection (a) of this section.
1. The Secretary of the Department of Finance and Administration, with the approval of the Governor, may appoint and remove a person to be known as the “Income Tax Director” who, under the Secretary of the Department of Finance and Administration's supervision, shall have the direction and control of the assessment and collection of the taxes imposed by the Income Tax Act of 1929, § 26-51-101 et seq.
2. The Income Tax Director, with the approval of the Governor, may appoint such other officers, agents, deputies, clerks, and employees as he or she may deem necessary, such appointees to have the duties and powers which the Secretary of the Department of Finance and Administration may from time to time prescribe.
3. The salaries of all such officers, agents, and employees shall be fixed by the Secretary of the Department of Finance and Administration not to exceed the amounts appropriated by the General Assembly; and the Secretary of the Department of Finance and Administration and such officers, agents, and employees shall be allowed reasonable and necessary traveling and other expenses incurred in the performance of their duties not to exceed the amounts appropriated by the General Assembly.
4. The Secretary of the Department of Finance and Administration may require such of the officers, agents, and employees as he or she may designate to give bond for the faithful performance of their duties and in such sum and with such sureties as he or she may determine, and all premiums on these bonds shall be paid by the Secretary of the Department of Finance and Administration out of moneys appropriated for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq.
1. All taxes, interest, penalties, and costs collected under the provisions of the Income Tax Act of 1929, § 26-51-101 et seq., shall be general revenues and shall be deposited into the State Treasury to the credit of the State Apportionment Fund.
2. The Treasurer of State, on or before the fifth of the month next following the month during which the revenues shall have been received by him or her, shall allocate and transfer them to the various State Treasury funds in the proportions to each as provided by law, after first transferring to the General Revenue Fund Account an amount equivalent to the cost of collection and other pro rata charges as also provided by law.
1. For tax years beginning on and after January 1, 2014, a tax is imposed upon, and with respect to, the entire income of every resident, individual, trust, or estate. The tax shall be levied, collected, and paid annually upon the entire net income as defined and computed in this chapter at the following rates, giving effect to the tax credits provided hereafter, in the manner set forth:
  1. On the first four thousand two hundred ninety-nine dollars ($4,299) of net income or any part thereof, nine-tenths percent (0.9%);
  2. On the next four thousand one hundred dollars ($4,100) of net income or any part thereof, two and five-tenths percent (2.5%);
  3. On the next four thousand two hundred dollars ($4,200) of net income or any part thereof, three and five-tenths percent (3.5%);
  4. On the next eight thousand four hundred dollars ($8,400) of net income or any part thereof, four and five-tenths percent (4.5%);
  5. On the next fourteen thousand one hundred dollars ($14,100) of net income or any part thereof, six percent (6%);
  6. On net income of thirty-five thousand one hundred dollars ($35,100) and above, seven percent (7%);
  7. Every resident, individual, trust, or estate having net income greater than or equal to twenty-two thousand two hundred dollars ($22,200), but less than or equal to seventy-nine thousand three hundred dollars ($79,300), shall determine the amount of income tax due under this subsection in accordance with the table set forth below:
  8. Every resident, individual, trust, or estate having net income of less than twenty-two thousand two hundred dollars ($22,200) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:
  9. 1. For the tax year beginning January 1, 2020, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:
    2. For tax years beginning on and after January 1, 2021, every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300) shall determine the amount of income tax due under this subsection in accordance with the table set forth below:
  10. Every resident, individual, trust, or estate having net income of more than seventy-nine thousand three hundred dollars ($79,300), but not more than eighty-four thousand six hundred dollars ($84,600), shall reduce the amount of income tax due as determined under subdivision (a)(9) of this section by deducting a bracket adjustment amount in accordance with the table set forth below:
  11. The tables set forth in subdivisions (a)(1)-(10) of this section shall be adjusted annually in accordance with the method set forth in subsection (d) of this section.
2. However, no state income tax shall be due this state from a trust or estate created by a nonresident donor, trustor, or settlor, or by a nonresident testator even though administered by a resident trustee or personal representative except on income derived from:
  1. Lands situated in this state, including gains from any sale thereof;
  2. Any interest in lands situated in this state, including, without limitation, chattels real, including gains from any sale thereof;
  3. Tangible personal property located in Arkansas, including gains from any sale thereof; and
  4. Unincorporated businesses domiciled in Arkansas.
3. No income tax shall be due the State of Arkansas from a nonresident beneficiary on income received from a trust being administered by a resident trustee except on income derived by the trust from:
  1. Lands situated in this state, including gains from any sale thereof;
  2. Any interest in lands situated in this state, including, without limitation, chattels real, including gains from any sale thereof;
  3. Tangible personal property located in Arkansas, including gains from any sale thereof; and
  4. Unincorporated businesses domiciled in Arkansas.
4. 1. The Secretary of the Department of Finance and Administration shall prescribe annually a table which shall apply in lieu of the table contained in subsection (a) of this section with respect to each succeeding taxable year. The secretary shall increase the minimum and maximum dollar amounts for each rate bracket, rounding to the nearest one hundred dollars ($100), for which a tax is imposed under the table by the cost-of-living adjustment for each calendar year and by not changing the rate applicable to any rate bracket as adjusted.
  2. For purposes of subdivision (d)(1) of this section, the cost-of-living adjustment for a calendar year is the percentage, if any, by which the CPI for the current calendar year exceeds the CPI for the preceding calendar year, not to exceed three percent (3%). The CPI for any calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of such calendar year. “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the United States Department of Labor.
  3. The new tables, as adjusted annually, shall be used by the secretary in preparing the income tax withholding tables pursuant to § 26-51-907.
5. 1. Title 26 U.S.C. §§ 671 — 679, as in effect on January 1, 2019, are adopted for purposes of determining whether the grantor or another person shall be treated as the owner of a portion of a trust for Arkansas income tax purposes.
  2. A grantor or other person described in 26 U.S.C. §§ 671 — 679, as in effect on January 1, 2019, is subject to the filing and reporting requirements of § 26-51-806.
1. A tax is imposed and shall be assessed, levied, collected, and paid annually at the rates specified in § 26-51-201 upon and with respect to the entire net income as defined in this chapter, except as provided in this section, from all property owned and from every business, trade, or occupation carried on in this state by individuals, corporations, partnerships, trusts, or estates not residents of the State of Arkansas.
2. 1. Each nonresident as defined in § 26-51-102 shall file income tax returns with the State of Arkansas and pay the tax without distinction, or incident to the laws of the nonresident's resident state.
  2. It is the specific intention of the General Assembly that the tax shall be collected from property owned and from the conduct of every business, trade, or occupation, whether or not the individuals, corporations, partnerships, trusts, or estates are qualified to do business in the State of Arkansas and whether or not such business, trade, or occupation shall be conducted in interstate commerce.
3. However, the payment of the tax shall be based upon net income properly allocated as net income arising from the ownership of property and the conduct of a business, trade, or occupation in the State of Arkansas.
4. Additionally, no income tax shall be due the State of Arkansas from a nonresident beneficiary on income received from a trust or estate being administered by a resident trustee or personal representative except on income derived by the trust or estate from:
  1. Lands situated in this state, including gains from any sale of the lands situated in this state;
  2. Any interest in land situated in this state, including, without limitation, chattels real, including gains from any sale of an interest in land situated in this state;
  3. Tangible personal property located in Arkansas, including gains from any sale of the tangible personal property located in Arkansas; and
  4. Unincorporated businesses domiciled in Arkansas.
5. 1. No income tax shall be due the State of Arkansas from a nonresident partner with respect to that partner's distributive share of dividends, interest, or gains and losses from qualifying investment securities owned by an investment partnership, whether or not the partnership has a usual place of business located in this state.
  2. As used in this subsection:
    1. “Investment partnership” means a partnership that meets both of the following requirements:
      1. No less than ninety percent (90%) of the value of the partnership's total assets consists of qualifying investment securities and office space and equipment reasonably necessary to carry on its activities as an investment partnership; and
      2. No less than ninety percent (90%) of its gross income consists of interest, dividends, and gains from the sale or exchange of qualifying investment securities; and
    2. 1. “Qualifying investment securities” includes all of the following:
        
        Common stock, including preferred or debt securities convertible into common stock, and preferred stock;
        
        Bonds, debentures, and other debt securities;
        
        Deposits and any other obligations of banks and other financial institutions;
        
        Stock and bond index securities, futures contracts, options on securities, and other similar financial securities and instruments; and
        
        Other similar or related financial or investment contracts, instruments, or securities.
      2. “Qualifying investment securities” shall not include an interest in a partnership unless that partnership is itself an investment partnership.
  3. 1. The provisions of subdivision (e)(1) of this section shall not apply to income derived from investment activity that is interrelated with any trade or business activity of the nonresident or an entity in which the nonresident owns an interest in this state, whose primary activities are separate and distinct from the acts of acquiring, managing, or disposing of qualified investment securities, or if those securities were acquired with working capital of a trade or business activity conducted in this state in which the nonresident owns an interest.
    2. Likewise, the provisions of subdivision (e)(1) of this section shall not apply to corporate partners of an investment partnership except as provided by rules adopted by the Secretary of the Department of Finance and Administration.
1. The tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., shall be imposed upon resident fiduciaries, which tax shall be levied, collected, and paid annually with respect to:
  1. That part of the net income of estates or trusts which has not been distributed or become distributable to beneficiaries during the income year. In the case of two (2) or more joint fiduciaries, part of whom are nonresidents of this state, such part of the net income shall be treated as if each fiduciary had received an equal share;
  2. The net income received during the income year by deceased individuals who at the time of death were residents and who have died during the tax year without having made a return; and
  3. The entire net income of resident insolvent or incompetent individuals, whether or not any portion thereof is held for the future use of the beneficiaries, where the fiduciary has complete charge of the net income.
2. The tax imposed upon a fiduciary by the Income Tax Act of 1929, § 26-51-101 et seq., shall be a charge against the estate or trust.
1. Every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of the State of Arkansas, received by such corporation during the income year, on the following basis:
  1. On the first $3,000 of net income or any part thereof 1%
  2. On net income exceeding one hundred thousand dollars ($100,000), a flat rate of six and one-half percent (6½%) shall be applied to the entire net income.
2. Every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now determined by the income tax laws of Arkansas, on the following basis:
  1. On the first $3,000 of net income or any part thereof 1%
  2. On net income exceeding one hundred thousand dollars ($100,000), a flat rate of six and one-half percent (6½%) shall be applied to the entire net income.
3. 1. 1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Work Force 2000 Development Fund”.
    2. The Work Force 2000 Development Fund shall consist of those special revenues as specified in subdivision (c)(2) of this section and all other revenues as may be authorized by law.
  2. 1. The Revenue Division of the Department of Finance and Administration shall deposit the funds collected under the provisions of this section for corporate income tax into the State Treasury, there to be credited to the Revenue Holding Fund Account of the State Apportionment Fund.
    2. 1. For each of the state's fiscal years, the Chief Fiscal Officer of the State shall determine as an annual allocation available under the provisions of this section an amount based on the total net revenues, as enumerated in subsections (a) and (b) of this section, which were collected in the immediate past year, multiplied by a factor of six hundred seventy-eight ten thousandths (.0678).
        
        On the last day of each month of the respective fiscal year, the Chief Fiscal Officer of the State shall certify to the Treasurer of State an amount based on one-twelfth (1/12) of the annual allocation provided in this section for transfer as specified in subdivision (c)(2)(B)(ii) of this section.
      2. The Treasurer of State shall then transfer the amount so certified to the Special Revenue Fund Account as part of the gross special revenues.
      3. After the deductions as set out in § 19-5-203 have been made, the remaining amount shall be credited to the Work Force 2000 Development Fund.
      4. The remaining corporate income tax collections remaining in the Revenue Holding Fund Account shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections for that month in accordance with the provisions of § 19-5-201 et seq.
4. 1. All proceeds derived from the additional tax levied by this section shall be used exclusively for the authorized educational activities of:
    1. Any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, technical college, community college; or
    2. Any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, or technical college that merges with a two-year branch of a four-year institution, a four-year institution, a technical college, or a community college.
  2. 1. The distribution of the proceeds shall be supervised by the Career Education and Workforce Development Board for the postsecondary vocational-technical schools, technical institutes, and comprehensive lifelong learning centers.
    2. The distribution of the proceeds for technical colleges, community colleges, or any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, or technical college that merges with a two-year branch of a four-year institution, a four-year institution, a technical college, or a community college shall continue at the same proportion as those distributions made in fiscal year 1996-1997, excluding one-time capital disbursements and professional development disbursements made in fiscal year 1996-1997 equal to the amount of funds distributed in fiscal year 1998-1999.
    3. Any increase in the amount of funds in the Work Force 2000 Development Fund above the amount distributed in fiscal year 1998-1999 shall be supervised by the Arkansas Higher Education Coordinating Board and shall be distributed after a review of needs including, but not limited to, equity considerations and workforce development and after consultation with the presidents and chancellors of the technical and former technical colleges.
1. 1. Every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of the State of Arkansas, received by the corporation during the income year, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the second three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);
    5. On the next seventy-five thousand dollars ($75,000) of net income or any part thereof, but not exceeding one hundred thousand dollars ($100,000), six percent (6%); and
    6. On net income exceeding one hundred thousand dollars ($100,000), six and five-tenths percent (6.5%).
  2. For the tax year beginning January 1, 2021, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);
    5. On the next seventy-five thousand dollars ($75,000) of net income or any part thereof, six percent (6%); and
    6. On net income exceeding one hundred thousand dollars ($100,000), six and two-tenths percent (6.2%).
  3. For tax years beginning on or after January 1, 2022, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%); and
    5. On net income exceeding twenty-five thousand dollars ($25,000), five and nine-tenths percent (5.9%).
2. 1. Every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now determined by the income tax laws of this state, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the second three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);
    5. On the next seventy-five thousand dollars ($75,000) of net income or any part thereof, but not exceeding one hundred thousand dollars ($100,000), six percent (6%); and
    6. On net income exceeding one hundred thousand dollars ($100,000), six and five-tenths percent (6.5%).
  2. For the tax year beginning January 1, 2021, every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now determined by the income tax laws of this state, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);
    5. On the next seventy-five thousand dollars ($75,000) of net income or any part thereof, six percent (6%); and
    6. On net income exceeding one hundred thousand dollars ($100,000), six and two-tenths percent (6.2%).
  3. For tax years beginning on or after January 1, 2022, every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now determined by the income tax laws of this state, on the following basis:
    1. On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
    2. On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
    3. On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
    4. On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%); and
    5. On net income exceeding twenty-five thousand dollars ($25,000), five and nine-tenths percent (5.9%).
3. 1. 1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the “Work Force 2000 Development Fund”.
    2. The Work Force 2000 Development Fund shall consist of those special revenues as specified in subdivision (c)(2) of this section and all other revenues as may be authorized by law.
  2. 1. The Revenue Division of the Department of Finance and Administration shall deposit the funds collected under the provisions of this section for corporate income tax into the State Treasury, there to be credited to the Revenue Holding Fund Account of the State Apportionment Fund.
    2. 1. For each of the state's fiscal years, the Chief Fiscal Officer of the State shall determine as an annual allocation available under the provisions of this section an amount based on the total net revenues, as enumerated in subsections (a) and (b) of this section, which were collected in the immediate past year, multiplied by a factor of six hundred seventy-eight ten thousandths (.0678).
        
        On the last day of each month of the respective fiscal year, the Chief Fiscal Officer of the State shall certify to the Treasurer of State an amount based on one-twelfth (1/12) of the annual allocation provided in this section for transfer as specified in subdivision (c)(2)(B)(ii) of this section.
      2. The Treasurer of State shall then transfer the amount so certified to the Special Revenue Fund Account as part of the gross special revenues.
      3. After the deductions as set out in § 19-5-203 have been made, the remaining amount shall be credited to the Work Force 2000 Development Fund.
      4. The remaining corporate income tax collections remaining in the Revenue Holding Fund Account shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections for that month in accordance with the provisions of § 19-5-201 et seq.
4. 1. All proceeds derived from the additional tax levied by this section shall be used exclusively for the authorized educational activities of:
    1. Any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, technical college, community college; or
    2. Any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, or technical college that merges with a two-year branch of a four-year institution, a four-year institution, a technical college, or a community college.
  2. 1. The distribution of the proceeds shall be supervised by the Career Education and Workforce Development Board for the postsecondary vocational-technical schools, technical institutes, and comprehensive lifelong learning centers.
    2. The distribution of the proceeds for technical colleges, community colleges, or any postsecondary vocational-technical school, technical institute, comprehensive lifelong learning center, or technical college that merges with a two-year branch of a four-year institution, a four-year institution, a technical college, or a community college shall continue at the same proportion as those distributions made in fiscal year 1996-1997, excluding one-time capital disbursements and professional development disbursements made in fiscal year 1996-1997 equal to the amount of funds distributed in fiscal year 1998-1999.
    3. Any increase in the amount of funds in the Work Force 2000 Development Fund above the amount distributed in fiscal year 1998-1999 shall be supervised by the Arkansas Higher Education Coordinating Board and shall be distributed after a review of needs including, but not limited to, equity considerations and workforce development and after consultation with the presidents and chancellors of the technical and former technical colleges.
1. All income derived from the operation of any business or commercial enterprise or the sale, rental, or other disposition of any property used by a church in its operation of a business or commercial enterprise in this state shall be subject to the Arkansas income tax, except where the income is reinvested in similar property, and shall be reported and the Arkansas income tax paid thereon.
2. 1. Income from the interest on the savings and investments from dedicated funds, from the sale of dedicated church property, and from the rental of dedicated church property shall be excluded from the provisions of this section.
  2. It is not the intent of this section to impose the Arkansas income tax on rentals or gains on sales of dedicated property held only as a passive investment by a church.
3. The Secretary of the Department of Finance and Administration is authorized to promulgate reasonable rules to carry out the provisions of this section.
1. In addition to the taxes levied by § 26-51-201 et seq., § 26-51-301, and § 26-51-302 [repealed], there is levied an income tax surcharge of three percent (3%) of the tax liability of every person required to file an Arkansas income tax return.
2. 1. If an individual is a resident of an Arkansas border city described in § 26-52-601 et seq., the individual shall be liable for the income tax surcharge levied in subsection (a) of this section.
  2. The surcharge shall be computed on the tax liability that would have been due had the income tax exemption of § 26-52-601 et seq. not been available.
  3. The income tax exemption of § 26-52-601 et seq. shall not apply to the income tax surcharge levied in subsection (a) of this section.
3. The revenues derived from the additional tax imposed by this section shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections.
4. As used in this section, “tax liability” means the taxes imposed pursuant to § 26-51-201 et seq., § 26-51-301, and § 26-51-302 [repealed] before the application of any tax credits.
5. This section shall apply only to tax years beginning in calendar years 2003 and 2004.
1. As used in this section:
  1. “Head of household” means the same as defined in 26 U.S.C. § 2(b), as in effect on January 1, 2011; and
  2. “Qualifying widow or widower” means the “surviving spouse” as defined in 26 U.S.C. § 2(a), as in effect on January 1, 2011.
2. 1. Beginning with tax year 2010, the following taxpayers are exempt from state individual income tax:
    1. A single individual whose gross income is less than ten thousand six hundred eighty-two dollars ($10,682) for any income year;
    2. A married couple filing jointly with one (1) or fewer dependents whose gross income is less than eighteen thousand twelve dollars ($18,012) for any income year;
    3. A married couple filing jointly with two (2) or more dependents whose gross income is less than twenty-one thousand six hundred seventy-seven dollars ($21,677) for any income year; and
    4. A head of household or qualifying widow or widower with one (1) or more dependents whose gross income is less than fifteen thousand one hundred eighty-five dollars ($15,185) for any income year.
  2. Beginning with tax year 2011:
    1. A head of household or qualifying widow or widower with one (1) or fewer dependents whose gross income is less than the 2010 base rate of fifteen thousand one hundred eighty-five dollars ($15,185) plus the yearly cost-of-living adjustment provided by subsection (e) of this section for any income year is exempt from state individual income tax; and
    2. A head of household or qualifying widow or widower with two (2) or more dependents whose gross income is less than the 2010 base rate of eighteen thousand one hundred one dollars ($18,101) plus the yearly cost-of-living adjustment provided by subsection (e) of this section for any income year is exempt from state individual income tax.
3. 1. Beginning with tax year 2010, the following taxpayers are eligible for a low-income tax credit:
    1. A single individual whose gross income for the taxable year is ten thousand six hundred eighty-two dollars ($10,682) or more but less than fourteen thousand dollars ($14,000);
    2. A married couple filing jointly with one (1) or fewer dependents whose gross income for the taxable year is eighteen thousand twelve dollars ($18,012) or more but less than twenty-two thousand four hundred dollars ($22,400);
    3. A married couple filing jointly with two (2) or more dependents whose gross income for the taxable year is twenty-one thousand six hundred seventy-seven dollars ($21,677) or more but less than twenty-seven thousand eight hundred dollars ($27,800); and
    4. A head of household or a qualifying widow or widower with one (1) or more dependents whose gross income for the taxable year is fifteen thousand one hundred eighty-five dollars ($15,185) or more but less than nineteen thousand six hundred dollars ($19,600).
  2. Beginning with tax year 2011:
    1. A head of household or a qualifying widow or widower with one (1) or fewer dependents whose gross income for the taxable year is more than the 2010 base rate of fifteen thousand one hundred eighty-five dollars ($15,185) plus the cost-of-living adjustment provided by subsection (e) of this section but less than the 2010 base rate of nineteen thousand six hundred dollars ($19,600) plus the cost-of-living adjustment provided by subsection (e) of this section is eligible for a low-income tax credit; and
    2. A head of household or a qualifying widow or widower with two (2) or more dependents whose gross income for the taxable year is more than the 2010 base rate of eighteen thousand one hundred one dollars ($18,101) plus the cost-of-living adjustment provided by subsection (e) of this section but less than the 2010 base rate of twenty-two thousand two hundred dollars ($22,200) plus the cost-of-living adjustment provided by subsection (e) of this section is eligible for a low-income tax credit.
4. 1. For income tax year 2010, the low-income tax credit in subdivision (c)(1) of this section shall be determined in accordance with the tables below, based upon the taxpayer's filing status:
  2. For income tax year 2011, the low-income tax credit in subdivision (c)(2)(B) of this section shall be determined using the 2010 base-year table below and adding the yearly cost-of-living adjustment provided in subsection (e) of this section:
5. 1. For tax years beginning on or after January 1, 2010, for purposes of determining the exemptions from income tax in subsection (b) of this section and determining eligibility for the low-income tax credit in this section, the gross income amounts in subsections (b) and (c) of this section shall be adjusted annually by the cost-of-living adjustment for the current calendar year, rounded to the nearest whole dollar.
  2. For purposes of this subsection, the cost-of-living adjustment for any calendar year is the percentage, if any, not to exceed three percent (3%) by which the Consumer Price Index for the current calendar year exceeds the Consumer Price Index for the preceding calendar year.
  3. The Consumer Price Index for any calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of that calendar year.
  4. As used in this subsection, “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the United States Department of Labor.
6. For tax years beginning on or after January 1, 2010, following the cost-of-living adjustment for the Consumer Price Index as provided in subsection (e) of this section, the low-income tax credit in this section and the gross income limitations outlined in the tables in subsection (d) of this section shall be adjusted annually using the following method:
  1. For a single individual, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(1)(A) of this section, indexed as provided in subsection (e) of this section, and reduced, but not below zero dollars ($0.00), by four dollars ($4.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount;
  2. For a married couple filing jointly with one (1) or fewer dependents, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(1)(B) of this section, indexed as provided in subsection (e) of this section, and reduced, but not below zero dollars ($0.00), by seven dollars ($7.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount;
  3. For a married couple filing jointly with two (2) or more dependents, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(1)(C) of this section, indexed as provided in subsection (e) of this section, and reduced, but not below zero dollars ($0.00), by seven dollars ($7.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount;
  4. For a head of household or qualifying widow or widower with one (1) or more dependents, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(1)(D) of this section, indexed as provided in subsection (e) of this section, reduced, but not below zero dollars ($0.00), by six dollars ($6.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount; or
  5. Beginning with tax year 2011:
    1. For a head of household or qualifying widow or widower with one (1) or fewer dependents, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(2)(A) of this section, indexed as provided in subsection (e) of this section, reduced, but not below zero dollars ($0.00), by six dollars ($6.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount; or
    2. For a head of household or qualifying widow or widower with two (2) or more dependents, the amount of the low-income tax credit allowable shall be eighty percent (80%) of the income tax due upon the amount of gross income in subdivision (c)(2)(B) of this section, indexed as provided in subsection (e) of this section, reduced, but not below zero dollars ($0.00), by nine dollars ($9.00) for each one hundred dollars ($100), or fraction thereof, that the taxpayer's gross income exceeds the indexed amount.
7. For the purpose of determining eligibility for the low-income tax credit in this section, income from all sources shall be used in determining the gross income of the taxpayer regardless of whether the income is taxable in Arkansas.
8. A taxpayer is not eligible for the low-income tax credit in this section if the taxpayer claims an exemption in § 26-51-306 or § 26-51-307, or if the taxpayer itemizes deductions.
1. The following organizations shall be exempt from taxation under the Income Tax Act of 1929, § 26-51-101 et seq.:
  1. Fraternal benefit societies, orders, or associations:
    1. Operating under the lodge system or for the exclusive benefit of the members of a fraternity itself operating under the lodge system; and
    2. Providing for the payment of life, sickness, accident, or other benefits to the members of such society, order, or association or their dependents;
  2. Domestic life and disability insurance companies and foreign insurance companies;
  3. Cemetery corporations;
  4. Business leagues, chambers of commerce, or boards of trade not organized for profit and no part of the net earnings of which inures to the benefit of any private stockholders or individuals;
  5. Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare;
  6. Farmers' or other mutual hail, cyclone, or fire insurance companies, or other domestic insurance companies writing lines of insurance other than those specified in subdivisions (a)(1) and (2) of this section, mutual ditch or irrigation companies, mutual or cooperative telephone companies, or like organizations of a purely local character, but only if eighty-five percent (85%) or more of the income of the organization consists solely of assessments, dues, and fees collected from members for the sole purpose of meeting losses and expenses;
  7. Farmers', fruit growers', or like organizations organized and operated as sales agent for the purpose of marketing the products of members and turning back to them the proceeds of sales, less the necessary selling expenses, on the basis of the quantity of produce furnished by them;
  8. Labor, agricultural, or horticultural organizations, no part of the net earnings of which inures to the benefit of any private stockholder or member;
  9. Corporations, trusts, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of the activities of which is carrying on propaganda or otherwise attempting to influence legislation, and which does not participate in, or intervene in, including the publishing or distributing of statements, any political campaign on behalf of or in opposition to any candidate for public office; and
  10. A political organization that does not have political organization taxable income for the tax year under 26 U.S.C. § 527, as in effect on January 1, 2009.
2. 1. Every organization claiming exemption under the Income Tax Act of 1929, § 26-51-101 et seq., shall notify the Revenue Division of the Department of Finance and Administration of its exempt status.
  2. Each such organization shall provide such additional information as the division shall also reasonably require for verification of the organization's exempt status.
  3. Provided, however, that any organization which is determined to be exempt from income taxation under the provisions of the Internal Revenue Code, 26 U.S.C. § 1 et seq., for any one (1) or more of the purposes set forth in subsection (a) of this section shall verify its exempt status hereunder by delivery to the division of a copy of the document declaring its exempt status under the Internal Revenue Code, 26 U.S.C. § 1 et seq.
1. 1. 1. For tax years beginning before January 1, 2007, no member of the armed services of the United States shall be liable for or required to pay any income tax on the first six thousand dollars ($6,000) of service pay or allowances.
    2. 1. For tax years 2005 and 2006, enlisted personnel of the armed services of the State of Arkansas or of the United States shall not be liable for or required to pay any income tax on the first nine thousand dollars ($9,000) of service pay or allowances.
      2. For tax years 2005 and 2006, an officer or a warrant officer of the armed services of the State of Arkansas or of the United States is only entitled to the exemption in subdivision (a)(1)(A) of this section and is not entitled to the exemption in subdivision (a)(1)(B)(i) of this section.
    3. For tax years beginning on and after January 1, 2007, any member of the armed services of the State of Arkansas or the United States is not liable for or required to pay any income tax on the first nine thousand dollars ($9,000) of service pay or allowance.
    4. The service pay or allowance received by an active duty member of the armed forces is exempt from the income tax imposed under this chapter.
  2. The compensation and benefits are declared exempt, to the extent of the amounts provided in subdivision (a)(1) of this section, from the state income tax.
  3. All service pay or allowances of members of the armed services of the State of Arkansas or the United States in excess of the amounts provided in subdivision (a)(1) of this section shall be subject to the state income tax, unless otherwise provided for in this section.
  4. 1. Title 26 U.S.C. §§ 112 and 692, as in effect on January 1, 2007, regarding combat zone compensation of members of the armed forces and income taxes of members of the armed forces on death are adopted.
    2. The provisions contained in 26 U.S.C. § 112 are in addition to all other provisions contained in this section.
2. Nothing in this section shall exempt from taxation the income of members of the armed services derived from other sources than their service pay and allowances.
3. As used in this section:
  1. “Active duty member of the armed forces” means a member in the armed forces of the United States, including without limitation full-time training duty, annual training duty, and attendance while in the active military service at a school designated as a service school by law or by the secretary of the relevant military department;
  2. 1. “Armed forces” means the United States Army, United States Navy, United States Air Force, United States Marine Corps, and United States Coast Guard, the National Guard, and the reserve components of the United States Army, United States Navy, United States Air Force, United States Marine Corps, and United States Coast Guard.
    2. “Armed forces” does not include:
      1. A military technician (dual status) under 10 U.S.C. § 10216(a)(1), as it existed on January 1, 2019;
      2. The National Oceanic and Atmospheric Administration Commissioned Officer Corps; or
      3. The United States Commissioned Corps of the Public Health Service; and
  3. “Armed services” means the National Guard, reserve components of the armed forces, United States Army, United States Navy, United States Marine Corps, United States Coast Guard, United States Air Force, National Oceanic and Atmospheric Administration Commissioned Officer Corps, and United States Commissioned Corps of the Public Health Service.
1. 1. The first six thousand dollars ($6,000) of benefits received by a resident of this state from an individual retirement account or the first six thousand dollars ($6,000) of retirement benefits received by a resident of this state from public or private employment-related retirement systems, plans, or programs, regardless of the method of funding for these systems, plans, or programs, is exempt from the state income tax.
  2. 1. Only individual retirement account benefits received by an individual retirement account participant after reaching fifty-nine and one-half (59½) years of age qualify for the exemption.
    2. The only other distributions or withdrawals from an individual retirement account that qualify for the exemption before the individual retirement account participant reaches fifty-nine and one-half (59½) years of age are those made on account of the participant's death or disability.
    3. All other premature distributions or early withdrawals, including without limitation those taken for medical-related expenses, higher education expenses, or a first-time home purchase, do not qualify for the exemption.
2. 1. 1. Except as provided in subdivision (b)(2) of this section and subsection (e) of this section, the exemption provided for in subsection (a) of this section for benefits received from an individual retirement account or from a public or private employment-related retirement system, plan, or program is the only exemption from the state income tax allowed for benefits received from an individual retirement account or from any publicly or privately supported employment-related retirement system, plan, or program, excepting only benefits received under systems, plans, or programs which are by federal law exempt from the state income tax.
    2. Except as provided in subsection (e) of this section, a taxpayer shall not receive an exemption greater than six thousand dollars ($6,000) during any tax year under this section.
  2. This section does not apply to retirement or disability benefits received under a plan, system, or fund described in § 26-51-404(b)(6).
3. 1. Title 26 U.S.C. § 72, as in effect on January 1, 2009, is the sole method by which a recipient of benefits from an individual retirement account or from public or private employment-related retirement systems, plans, or programs may deduct or recover his or her cost of contribution to the plan when computing his or her income for state income tax purposes.
  2. A taxpayer shall not deduct or recover any portion of the taxpayer's cost of contribution to the plan that the taxpayer:
    1. Has already deducted or recovered; or
    2. Would have been allowed to deduct or recover under any provision of law or court decision.
4. 1. An individual who is sixty-five (65) years of age or older and who does not claim an exemption under subsection (a) of this section is entitled to an additional state income tax credit of twenty dollars ($20.00).
  2. This credit is in addition to all other credits allowed by law.
5. 1. The following are exempt from the income tax imposed under this chapter:
    1. Retirement benefits received by a member of the uniformed services from any of the uniformed services identified in subdivision (e)(2) of this section; and
    2. Survivor benefits that are funded by the retirement pay of a member of the uniformed services.
  2. As used in this subsection, “member of the uniformed services” means a retired member of any of the following:
    1. The United States Army, the United States Marine Corps, the United States Navy, the United States Air Force, or the United States Coast Guard;
    2. A reserve component of any of the United States Armed Forces listed in subdivision (e)(2)(A) of this section;
    3. The National Guard of any state;
    4. The commissioned regular or reserve corps of the United States Public Health Service; or
    5. The National Oceanic and Atmospheric Administration Commissioned Officer Corps.
6. A taxpayer claiming an exemption under subsection (e) of this section is not eligible for an exemption under subsection (a) of this section.
1. Title 26 U.S.C. § 664, as in effect on January 1, 2017, and the regulations of the United States Secretary of the Treasury promulgated under 26 U.S.C. § 664 and in effect on January 1, 2017, are adopted for the purpose of computing the tax liability of charitable remainder trusts and their beneficiaries under the Income Tax Act of 1929, § 26-51-101 et seq.
2. Furthermore, any other provision of the federal income tax law and regulations which are necessary for interpreting and implementing 26 U.S.C. § 664 are adopted to the extent as in effect on January 1, 2017.
1. A qualified windmill blade manufacturer that meets the criteria found in subsection (b) of this section is exempt from income taxes levied under the Income Tax Act of 1929, § 26-51-101 et seq., until December 31, 2033.
2. A windmill blade manufacturer shall meet the following criteria in order to claim the income tax exemption provided in subsection (a) of this section:
  1. Shall be classified in the North American Industry Classification System (NAICS) Code 333611, as in effect January 1, 2007;
  2. Shall locate in the state before December 31, 2007;
  3. Shall expend a minimum of one hundred fifty million dollars ($150,000,000) in the state within six (6) years of signing a financial incentive agreement with the Arkansas Economic Development Commission; and
  4. Shall hire a minimum of one thousand (1,000) employees in the state within six (6) years of signing a financial incentive agreement with the commission.
3. If any of the criteria under subsection (b) of this section are not met, the income tax exemption in subsection (a) of this section shall expire in the year that the failure to meet any of the criteria for qualification occurs.
1. A qualified windmill blade or windmill component manufacturer that meets the criteria under this section is eligible for a limited exemption from the income taxes levied under the Income Tax Act of 1929, § 26-51-101 et seq.
2. To qualify for a limited exemption under this section from income taxes, a windmill blade or windmill component manufacturer shall:
  1. Be classified in the North American Industrial Classification System (NAICS) Code 333611 as in effect January 1, 2009;
  2. Locate in the state after January 1, 2008; and
  3. Sign a financial incentive agreement with the Arkansas Economic Development Commission after January 1, 2008.
3. The limited income tax exemption allowed under this section is calculated based on the formula in subsection (d) of this section that comprises the following variables:
  1. Investment;
  2. Job creation;
  3. Tier status; and
  4. Wages.
4. The number of years that a limited income tax exemption is granted to a qualified windmill blade or windmill component manufacturer is calculated as follows:
  1. Divide the proposed number of jobs to be created by one thousand (1,000);
  2. 1. Multiply the number calculated under subdivision (d)(1) of this section by thirty-five hundredths (0.35).
    2. The number calculated under subdivision (d)(2)(A) of this section is the weighting factor for job creation under subdivision (c)(2) of this section;
  3. Divide the proposed hourly wage by the lesser of the state or county average wage;
  4. 1. Multiply the number calculated under subdivision (d)(3) of this section by thirty-five hundredths (0.35).
    2. The number calculated under subdivision (d)(4)(A) of this section is the weighting factor for wages under subdivision (c)(4) of this section;
  5. Divide the proposed investment amount by one hundred fifty million dollars ($150,000,000);
  6. 1. Multiply the number calculated under subdivision (d)(5) of this section by twenty hundredths (0.20).
    2. The number calculated under subdivision (d)(6)(A) of this section is the weighting factor for investment under subdivision (c)(1) of this section;
  7. Divide the tier number of the county in which the business locates by four (4);
  8. 1. Multiply the number calculated under subdivision (d)(7) of this section by ten hundredths (0.10).
    2. The number calculated under subdivision (d)(8)(A) of this section is the weighting factor for tier status that is associated with location under subdivision (c)(3) of this section;
  9. Take the sum of the numbers in subdivisions (d)(2)(A), (d)(4)(A), (d)(6)(A), and (d)(8)(A) of this section and multiply the sum by twenty-five (25); and
  10. The number calculated in subdivision (d)(9) of this section is the number of years of income tax exemption granted to the qualified windmill blade or windmill component manufacturer.
5. If a qualified windmill blade or windmill component manufacturer that signs a financial incentive agreement with the commission after January 1, 2008, has employed a minimum of one thousand (1,000) persons during the last year of the income tax exemption provided for in the initial signed financial incentive agreement with the commission, then additional years of income tax exemption may be authorized by the commission.
6. An income tax exemption allowed by this section shall not exceed twenty-five (25) years from the year that the exemption is first granted.
1. There is allowed an exemption from the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., for the period of time determined under subsection (b) of this section for a qualified drop-in biofuels manufacturer.
2. The number of years that an income tax exemption is allowed under this section is calculated as follows:
  1. 1. Multiply the proposed average hourly wage to be paid by the qualified drop-in biofuels manufacturer by two thousand eighty (2,080) hours.
    2. Multiply the product obtained under subdivision (b)(1)(A) of this section by the number of jobs to be created by the qualified drop-in biofuels manufacturer to determine the proposed annual payroll;
  2. 1. Multiply one hundred ten percent (110%) of the state's average hourly wage from the preceding calendar year by two thousand eighty (2,080) hours.
    2. Multiply the product obtained under subdivision (b)(2)(A) of this section by one thousand (1,000);
  3. Divide the product calculated under subdivision (b)(1) of this section by the product calculated under subdivision (b)(2) of this section;
  4. Multiply the quotient calculated under subdivision (b)(3) of this section by six-tenths (0.6) to determine the weighting factor for payroll;
  5. Divide the proposed investment of the qualified drop-in biofuels manufacturer by two hundred fifty million dollars ($250,000,000);
  6. Multiply the quotient calculated under subdivision (b)(5) of this section by four-tenths (0.4) to determine the weighting factor for investment;
  7. Add the product calculated under subdivision (b)(4) of this section to the product calculated under subdivision (b)(6) of this section; and
  8. 1. Multiply the sum calculated under subdivision (b)(7) of this section by twenty (20) and round to the nearest whole number.
    2. The number calculated under subdivision (b)(8)(A) of this section is the number of years that the income tax exemption is allowed for the qualified drop-in biofuels manufacturer.
    3. However, an income tax exemption allowed under this section shall not exceed twenty (20) years.
3. As used in this section:
  1. “Drop-in biofuels” means a liquid motor fuel that:
    1. Is a substitute for conventional petroleum-based motor fuel;
    2. Is completely interchangeable and compatible with conventional petroleum-based motor fuel;
    3. Does not require modification of conventional engine fuel systems; and
    4. Can be delivered through the existing fuel distribution systems, including without limitation:
      1. Intrastate and interstate petroleum pipelines; and
      2. Existing gasoline and diesel fuel pumps; and
  2. “Qualified drop-in biofuels manufacturer” means a person or entity that:
    1. Manufactures drop-in biofuels;
    2. Invests at least twenty million dollars ($20,000,000) in a new or expanded drop-in biofuels manufacturing facility;
    3. Creates at least one hundred (100) new jobs;
    4. If the new or expanded drop-in biofuels manufacturing facility is a subsidiary of an existing Arkansas company, establishes the new or expanded drop-in biofuels facility as a separate legal entity;
    5. Locates the new or expanded drop-in biofuels facility in the state after January 1, 2013, but before June 30, 2023; and
    6. Signs a financial incentive agreement with the Arkansas Economic Development Commission after January 1, 2013, but before June 30, 2023.
4. The ability to qualify for an income tax exemption under this section expires June 30, 2023.
1. As used in this section, “agricultural disaster program” means a program that provides compensation to a cattle farmer or cattle rancher who has suffered a loss as the result of an emergency, a disaster, or declining market prices or value, including without limitation the following programs:
  1. Livestock Forage Disaster Program;
  2. Livestock Indemnity Program;
  3. Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish;
  4. Emergency Conservation Program;
  5. Noninsured Crop Disaster Assistance Program;
  6. Pasture, Rangeland, Forage Pilot Insurance Program;
  7. Annual Forage pilot program;
  8. Livestock Risk Protection insurance plan; and
  9. Livestock Gross Margin insurance plan.
2. There is allowed an exemption from the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., for payments made to a cattle farmer or cattle rancher from an agricultural disaster program.
3. Expenses for losses related to the receipt of a payment from an agricultural disaster program to a cattle farmer or cattle rancher are not deductible or otherwise permitted to offset any other income from the tax year in which the loss or expenses are incurred.
1. There is allowed an exemption from the income tax imposed under this chapter for:
  1. Payments made to a taxpayer by the United States Department of Agriculture under the Market Facilitation Program authorized by 15 U.S.C. § 714c, as it existed on January 1, 2020; and
  2. Recovery rebates provided by the United States Department of the Treasury under Section 2201 of the Coronavirus Aid, Relief, and Economic Security Act, Pub. L. No. 116-136.
2. Expenses for losses related to the receipt of a payment from the Market Facilitation Program to a taxpayer are not deductible or otherwise permitted to offset any other income from the tax year in which the loss or expenses are incurred.
1. A taxpayer must calculate his or her Arkansas income tax liability using the same accounting method for Arkansas income tax purposes as used for federal income tax purposes.
2. A taxpayer must provide to the Secretary of the Department of Finance and Administration a copy of any certification or approval from the Internal Revenue Service authorizing the taxpayer to change his or her accounting method.
1. A taxpayer must calculate his or her Arkansas income tax liability using the same income year for Arkansas income tax purposes as used for federal income tax purposes.
2. A taxpayer must provide to the Secretary of the Department of Finance and Administration a copy of any certification or approval from the Internal Revenue Service authorizing the taxpayer to change his or her income year.
1. The term “net income” means the adjusted gross income of a taxpayer less the deductions allowed by the Income Tax Act of 1929, § 26-51-101 et seq.
2. “Adjusted gross income” means, in the case of an individual, gross income minus the following deductions:
  1. Trade and business deductions otherwise allowable as deductions under this chapter that are attributable to a trade or business carried on by the taxpayer if the trade or business does not consist of the performance of services by the taxpayer as an employee;
  2. Trade and business deductions of employees otherwise allowable as deductions under this chapter;
  3. Deductions that consist of expenses paid or incurred by the taxpayer in connection with the performance by him or her of services as an employee under a reimbursement or other expense allowance arrangement with his or her employer;
  4. Losses from the sale or exchange of property;
  5. Deductions attributable to property held for the production of rents and royalties;
  6. 1. Certain deductions of life tenants and income beneficiaries of property.
    2. In the case of a life tenant of property, an income beneficiary of property held in trust, or an heir, legatee, or devisee of an estate, the deduction for depreciation allowed by 26 U.S.C. § 167, as provided in § 26-51-428, and the deduction allowed by 26 U.S.C. § 611, as provided in § 26-51-429;
  7. Deductions for certain portions of lump-sum distributions from pension plans taxed under 26 U.S.C. § 402(e), as set forth in § 26-51-414;
  8. Deductions for moving expenses, as set forth in § 26-51-423(a)(4);
  9. Deductions for alimony payments;
  10. Deductions for separate maintenance payments;
  11. Deductions for interest forfeited to a bank, savings association, et cetera, on premature withdrawals from time savings accounts or deposits;
  12. Deductions allowed for cash payments to individual retirement accounts and deductions allowed for cash payments to retirement savings plans of certain married individuals to cover a nonworking spouse;
  13. Deductions for contributions by self-employed persons to pension, profit-sharing, and annuity plans;
  14. The border city exemption as provided by § 26-52-601 et seq.;
  15. Deductions for the health insurance costs of self-employed persons as computed in accordance with § 26-51-423(c);
  16. Deductions for contributions to a long-term intergenerational trust created pursuant to the Long-Term Intergenerational Security Act of 1995, § 28-72-501 et seq.; and
  17. Deductions for contributions to the Arkansas Tax-Deferred Tuition Savings Program not to exceed five thousand dollars ($5,000) per taxpayer under § 6-84-111(b).
3. 1. The net income shall be computed upon the basis of the taxpayer's annual accounting period, either fiscal or calendar year, in accordance with the method of accounting regularly employed in keeping the books of the taxpayer.
  2. If no such method of accounting has been employed or if the method employed does not clearly reflect the income, the computation shall be made upon such basis and in such manner as in the opinion of the Secretary of the Department of Finance and Administration does clearly reflect the income.
  3. If the taxpayer's annual accounting period is other than a fiscal year as defined by the Income Tax Act of 1929, § 26-51-101 et seq., or he or she has no annual accounting period, or does not keep books, the net income shall be computed upon the basis of the calendar year.
1. 1. “Gross income” includes:
    1. Gains, profits, and income derived from salaries, wages, or compensation for personal service of whatever kind and in whatever form paid;
    2. Gains, profits, and income derived from professions, vocations, trades, business, commerce, or sales;
    3. Gains, profits, and income derived from dealings in property, whether real or personal, growing out of the ownership of, use of, or interest in the property;
    4. Gains, profits, and income derived from interest, rent, royalties, dividends, annuities, securities, or the transaction of any business carried on for gain or profit;
    5. Gains or profits and income derived from any source whatever;
    6. Any payments of alimony and separate maintenance received pursuant to a court order;
    7. Unemployment compensation benefits paid from federal unemployment funds; and
    8. Unemployment insurance benefits received from unemployment compensation paid under Title IV of the Social Security Act, 42 U.S.C. § 601 et seq., except for unemployment or sickness payments made pursuant to 45 U.S.C. § 352, as it existed on January 1, 2017.
  2. The amount of all such items shall be included in the gross income of the taxable year in which received by the taxpayer.
  3. Any recovery of an amount which was deducted from gross income in a prior year must be treated as taxable income in the year recovered to the extent that the deduction resulted in a reduction in income tax liability.
  4. Title 26 U.S.C. § 117, as in effect on January 2, 2017, regarding the taxability of scholarships, fellowships, grants, and stipends, is adopted for the purpose of clarifying and calculating Arkansas income tax liability.
2. “Gross income” does not include the following items, which shall be exempt from taxation under the Income Tax Act of 1929, § 26-51-101 et seq.:
  1. Title 26 U.S.C. § 1033, as in effect on January 1, 2009, relating to the exclusion from gross income of gain resulting from the involuntary conversion of a taxpayer's property, is adopted for the purpose of computing Arkansas income tax liability;
  2. Title 26 U.S.C. § 121, as in effect on January 1, 2009, relating to the exclusion from gross income of gain from the sale or exchange of property owned and used as the taxpayer's principal residence, is adopted for the purpose of computing Arkansas income tax liability;
  3. Title 26 U.S.C. § 101, as in effect on January 1, 2007, relating to the exclusion from gross income of proceeds or benefits paid upon the illness or death of the insured, is hereby adopted for the purpose of computing Arkansas income tax liability;
  4. The value of property acquired by gift, bequest, devise, or descent, but the income from such property shall be included in gross income;
  5. Interest upon obligations of the United States or its possessions or upon obligations of the State of Arkansas or any political subdivision of the State of Arkansas;
  6. Any:
    1. Amounts received through accident or health insurance or under workers' compensation acts as compensation for personal injuries or sickness, plus the amount of any damages received, whether by suit or agreement, on account of such injuries or sickness; or
    2. Social Security payments, railroad retirement benefits, and unemployment insurance benefits received from the railroad retirement boards;
  7. 1. Income from domestic corporations when earned from sources without the state, and these sources shall be defined to mean places of manufacture or production and places of merchandising.
    2. When books of account do not clearly and accurately reflect the income earned from sources without the state, the Arkansas income shall be determined by processes or formulas of general apportionment prescribed by the Secretary of the Department of Finance and Administration and approved by the Governor;
  8. Dividends received by a corporation doing business within this state from a subsidiary if at least eighty percent (80%) of the subsidiary's capital stock is owned by a corporation doing business within this state;
  9. In the case of an ordained, commissioned, or licensed minister of a recognized church, 26 U.S.C. § 107, as in effect on January 2, 2013, regarding the rental value of parsonages, is adopted for the purpose of computing Arkansas income tax liability;
  10. Title 26 U.S.C. §§ 108 and 1017, as in effect on January 1, 2019, regarding income from the discharge of indebtedness, are adopted for the purpose of computing Arkansas income tax liability;
  11. Title 26 U.S.C. § 125, as in effect on January 1, 2011, is adopted in computing amounts excludible from gross income under the Income Tax Act of 1929, § 26-51-101 et seq., for payments received under a cafeteria plan;
  12. 1. Title 26 U.S.C. § 129, as in effect on January 1, 2005, regarding the exclusion from income for dependent care assistance, is adopted for the purpose of computing Arkansas income tax liability.
    2. However, no amounts excluded from gross income pursuant to subdivision (b)(12)(A) of this section shall be taken into account in computing the dependent care credit contained in § 26-51-502;
  13. Title 26 U.S.C. § 79, as in effect on January 1, 1989, regarding the exclusion from income for group term life insurance is hereby adopted for the purpose of computing Arkansas income tax liability;
  14. The following sections of the Internal Revenue Code, 26 U.S.C. § 1 et seq., regarding the exclusion from income of disability and health plan payments, are adopted for the purpose of computing Arkansas income tax liability:
    1. Title 26 U.S.C. §§ 104 and 106, as in effect on January 1, 2011; and
    2. Title 26 U.S.C. § 105, as in effect on January 1, 2017;
  15. Title 26 U.S.C. § 82, as in effect on January 1, 1995, regarding the inclusion in gross income of moving expense reimbursements, is adopted for the purpose of computing Arkansas income tax liability;
  16. Title 26 U.S.C. § 119, as in effect on January 1, 1999, regarding the exclusion from gross income of meals or lodging furnished for the convenience of the employer, is adopted for the purpose of computing Arkansas income tax liability;
  17. Title 26 U.S.C. § 126, as in effect on January 1, 1995, regarding the exclusion from gross income of certain cost-sharing payments, is adopted for the purpose of computing Arkansas income tax liability;
  18. Title 26 U.S.C. § 131, as in effect on January 1, 2003, regarding the exclusion from gross income of amounts received by a foster care provider as qualified foster care payments, is adopted for the purpose of computing Arkansas income tax liability;
  19. Title 26 U.S.C. § 132, as in effect on January 1, 2017, regarding the exclusion from income of certain fringe benefits, is adopted for the purpose of computing Arkansas income tax liability;
  20. Title 26 U.S.C. § 127, as in effect on January 1, 2017, regarding the exclusion from gross income for employees whose education expenses were paid by an employer, is adopted for the purpose of computing Arkansas income tax liability;
  21. Interest or dividends earned or capital gains recognized on a long-term intergenerational security trust created pursuant to this subchapter, except as provided in this subchapter;
  22. Interest or dividends earned on an individual development account and matching funds deposited into an individual development account pursuant to the Family Savings Initiative Act, § 20-86-101 et seq.;
  23. Title 26 U.S.C. § 138, as in effect on January 1, 1999, regarding a pilot program permitting eligible senior citizens to establish Medicare Plus Choice medical savings accounts, is adopted for the purpose of computing Arkansas income tax liability;
  24. 1. Title 26 U.S.C. § 72, as in effect on January 1, 2007, relating to the exclusion from gross income of certain proceeds received under life insurance, endowment, and annuity contracts, is adopted for the purpose of computing Arkansas income tax liability.
    2. 1. Annuity income received through an employment-related retirement plan shall not be subject to the provisions of this subsection.
      2. The income shall instead be subject to the retirement income provisions of § 26-51-307;
  25. Title 26 U.S.C. § 137, as in effect on January 2, 2013, regarding the exclusion from gross income of benefits received under an employer's adoption assistance program, is adopted for the purpose of computing Arkansas income tax liability;
  26. Contributions by an employer to an employee's health savings account within the limitations established in § 26-51-453 shall not be included in the employee's gross income;
  27. Title 26 U.S.C. § 134, as in effect on January 1, 2009, regarding the exclusion from income of qualified military benefits provided to members of the United States military, is adopted for the purpose of computing Arkansas income tax liability;
  28. Title 26 U.S.C. § 408(d)(8) as in effect on January 1, 2007, relating to tax-free distributions from individual retirement plans for charitable purposes for taxable years 2006 and 2007, is adopted for the purpose of computing Arkansas income tax liability;
  29. Child support payments shall not be included in the gross income of the recipient; and
  30. Title 26 U.S.C. § 118, as in effect on January 1, 2019, regarding the recognition or nonrecognition of income for contributions to capital, is adopted for the purpose of computing Arkansas income tax liability.
1. An individual carrying on business as a partner in a partnership shall be liable for income tax only in his or her individual capacity and shall include in his or her gross income the distributive share of the net income or net loss of the partnership received by him or her or distributable to him or her during the income year.
2. The partner shall report all deductions or credits distributable to him or her personally as a partner in the partnership.
3. A partner's distributive share of partnership loss shall be allowed only to the extent of the adjusted basis of the partner's interest in the partnership at the end of the partnership year in which the loss occurred.
4. Any excess of the loss over the basis shall be allowed as a deduction at the end of the partnership year in which the excess is repaid to the partnership.
1. Every individual, taxable under the Income Tax Act of 1929, § 26-51-101 et seq., who is a beneficiary of an estate or trust shall include in his or her gross income the distributive share of the income or loss of the estate or trust received by him or her or distributable to him or her during the income year.
2. Unless otherwise provided in the law or the will, the deed, or other instrument creating the estate, trust, or fiduciary relationship, the net income shall be deemed to be distributed or distributable to the beneficiaries, including the fiduciary as a beneficiary, in the case of income accumulated for future distribution, ratably in proportion to their respective interests.
3. Any excess losses accumulated by the estate or trust at the time of the termination of the estate or trust shall be distributable to the beneficiaries ratably and claimed by the beneficiaries on the individual Arkansas income tax returns as otherwise provided by the Income Tax Act of 1929, § 26-51-101 et seq.
1. A financial institution having its principal office in this state shall be taxed as a business corporation organized and existing under the laws of this state.
2. 1. A financial institution having its principal office outside this state but doing business in this state shall be taxed as a foreign business corporation doing business in this state.
  2. However, this subsection is not intended to recognize the right of a foreign financial institution to conduct any business activities in this state except to the extent and under the conditions permitted by Acts 1953, No. 559, §§ 1-8 [unconstitutional] and any other applicable laws of this state.
1. Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability.
2. 1. 1. A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year.
    2. An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes.
  2. A corporation that has elected to be treated as a Subchapter S corporation for federal income tax purposes shall not elect to be treated as a Subchapter C corporation for Arkansas income tax purposes.
  3. When filing an Arkansas Subchapter S income tax return, a corporation shall attach to its Arkansas Subchapter S income tax return a complete copy of the corporation's federal Subchapter S income tax return filed with the Internal Revenue Service for that taxable year.
3. 1. However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due.
  2. Failure to so report and remit on the part of any nonresident shareholder shall be grounds upon which the secretary may revoke the corporation's Subchapter S election and collect the tax from the corporation by any manner authorized by the Income Tax Act of 1929, § 26-51-101 et seq.
1. For the purpose of ascertaining the gain or loss from the sale or other disposition of real, personal, or mixed property, the basis shall be, in the case of property acquired before January 1, 1928, the assessed valuation of such property on the county tax books as of that date if such assessed valuation exceeds the original cost and, in all other cases, the cost of such property, except that:
  1. In the case of such property which should be included in the inventory, the basis shall be the last inventory value;
  2. 1. In the case of property acquired by gift after March 9, 1929, the basis shall be the same as that which it would have been in the hands of the donor or the last preceding owner by whom it was not acquired by gift.
    2. If the facts necessary to determine such basis are unknown to the donee, the Secretary of the Department of Finance and Administration shall use the assessed valuation of the property;
  3. In the case of such property acquired by gift on or before March 9, 1929, the basis for ascertaining gain or loss from sale or other disposition of such property shall be the assessed valuation; and
  4. In the case of such property acquired by bequest, devise, or inheritance, the basis shall be the appraised value of such property upon which state inheritance tax or estate tax was paid.
2. The basis for ascertaining the gain derived or loss sustained from the sale or other disposition of real, personal, or mixed property acquired before January 1, 1928, shall be the assessed value of such property including improvements as of January 1, 1928, or the actual cost of such property, but:
  1. If its assessed valuation as of January 1, 1928, is in excess of its sale price at the time of disposition, then the deductible loss shall be the difference between the assessed valuation on January 1, 1928, and the amount realized from the sale less depreciation or depletion subsequently sustained;
  2. If the assessed valuation as of January 1, 1928, is less than the sale price, then the taxable gain shall be the excess realized over the assessed valuation plus depreciation or depletion subsequently sustained; and
  3. If the amount realized is more than the cost price but not more than its assessed valuation as of January 1, 1928, or less than the cost but not less than its assessed valuation on January 1, 1928, then no gain shall be included in and no loss deducted from the gross income.
3. For the purpose of the Income Tax Act of 1929, § 26-51-101 et seq., on any exchange of real, personal, or mixed property for any other like property of similar value no gain or loss shall be recognized.
4. 1. In computing gain or loss from the sale of property, the difference between the amount realized and the adjusted basis is the amount of the gain or loss.
  2. The adjusted basis of the property is its cost, increased for capital charges and decreased for depreciation and for depletion.
  3. The amount realized from a sale or other disposition of property is the sum of any money received plus the fair market value of property or services received, less expenses.
5. Title 26 U.S.C. §§ 453, 453A, and 453B, as in effect on January 1, 2005, are adopted concerning the installment method of accounting.
6. Title 26 U.S.C. § 1045, as in effect on January 1, 1999, regarding gain on the sale or exchange of qualified small business stock, is adopted for the purpose of computing Arkansas income tax liability.
7. Title 26 U.S.C. §§ 1258 and 1259, as in effect on January 1, 1999, regarding appreciated financial positions, are adopted for the purpose of computing Arkansas income tax liability.
8. Title 26 U.S.C. § 267, as in effect on January 1, 2017, regarding losses, expenses, and interest arising from transactions between related taxpayers, is adopted for the purpose of computing Arkansas income tax liability.
1. 1. For the purpose of determining gain or loss, when property is exchanged for other property the property received in exchange shall be treated as the equivalent of cash to the amount of its fair market value if a market exists in which all the property so received can be disposed of at the time of exchange for a reasonable, certain, and definite price in cash.
  2. Otherwise, such exchange shall be considered as a conversion of assets from one (1) form to another, from which no gain or loss shall be deemed to arise.
2. In the case of the organization of a corporation, the stock received shall be considered to take the place of property transferred for the stock, and no gain or loss shall be deemed to arise from the stock received.
3. When, in connection with the reorganization, merger, or consolidation of a corporation, a taxpayer receives, in place of stock or securities owned by him or her, new stock or securities, then the basis of computing the gain or loss, if there is any, in a case where the stock or securities owned were acquired before January 1, 1928, shall be the fair market price or value thereof as of that date if such price or value exceeds the original cost, and in all other cases the cost thereof, under rules to be promulgated by the Secretary of the Department of Finance and Administration.
4. Title 26 U.S.C. §§ 351, 354 — 358, 361, 362, 367, and 368, as in effect on January 1, 2019, regarding corporate organization, reorganization, and recognition of gain, are adopted for the purpose of computing Arkansas income tax liability.
1. Title 26 U.S.C. §§ 332, 334, 336, 337, and 338, as in effect on January 1, 2007, regarding the liquidations of corporations, are adopted for the purpose of computing Arkansas income tax liability.
2. For the purposes of the application of this section, the transition rule of § 633(c) and (d) of the Tax Reform Act of 1986, Pub. L. No. 99-514, as amended by subsections (g)(2), (g)(3)(A)-(C), (g)(4), (g)(5)(A) and (B), and (g)(7) of § 1006 of the Technical and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647, shall also apply under the state income tax law.
1. 1. The following sections relating to annuities, retirement savings, and employee benefit plans are adopted for the purpose of computing Arkansas income tax liability, except Arkansas capital gains treatment and the Arkansas tax rates shall apply:
    1. Title 26 U.S.C. §§ 72, 219, 402 — 404, 406 — 416, and 457, as in effect on January 1, 2017; and
    2. Title 26 U.S.C. § 401, as in effect on March 30, 2010.
  2. The requirements for filing a joint return under 26 U.S.C. § 219(c)(1)(A) shall not apply.
2. Title 26 U.S.C. § 408A as in effect on January 1, 2010, relating to Roth individual retirement accounts, is adopted for the purpose of computing Arkansas income tax liability, except with regard to adjusted gross income under 26 U.S.C. § 408A(c)(3), which shall be determined in the same manner as under § 26-51-403(b).
3. Any additional tax or penalty imposed by this section shall be ten percent (10%) of the amount of any additional tax or penalty provided in the federal income tax law adopted by this section.
4. Title 26 U.S.C. § 1042, as in effect on January 1, 2003, regarding the deferral of gain realized on the sale of a corporation's shares of stock to the corporation's employee stock ownership plan (ESOP), is adopted for the purpose of computing Arkansas income tax liability.
1. Title 26 U.S.C. § 71 [repealed], in effect on January 1, 1987, is adopted for purposes of determining the amount of alimony or separate maintenance to include in the gross income of the recipient.
2. Title 26 U.S.C. § 215 [repealed], in effect on January 1, 1987, is adopted for purposes of determining the amount of alimony or separate maintenance that can be deducted from a taxpayer's income for any income year.
1. In addition to any other state income tax deduction permitted by law, a taxpayer in this state who is maintaining, supporting, and caring for a totally and permanently disabled child in his or her home shall be permitted a deduction on his or her Arkansas income taxes of five hundred dollars ($500) for each income year that the taxpayer maintains, supports, and cares for such totally and permanently disabled child.
2. As used in this section:
  1. “Child” means a natural or adopted child of the taxpayer; and
  2. 1. “Totally and permanently disabled” means any child who is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.
    2. A physical or mental impairment is an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical or laboratory diagnostic techniques.
3. The Secretary of the Department of Finance and Administration may adopt appropriate rules to carry out the purpose and intent of this section and to prevent abuse of the deduction provided for in this section.
1. 1. Title 26 U.S.C. § 170, as in effect on January 1, 2019, regarding deductions for charitable contributions, is adopted for the purpose of computing Arkansas income tax liability.
  2. However, with respect to contributions of qualified appreciated stock within the meaning of 26 U.S.C. § 170(e)(5) made after May 31, 1997, the provisions of this section shall apply after taking into account the extension of the provisions of 26 U.S.C. § 170(e)(5) by § 602 of the Taxpayer Relief Act of 1997, Pub. L. No. 105-34, and § 1004(a) of the Tax and Trade Relief Extension Act of 1998, Pub. L. No. 105-277.
2. The provisions of subsection (a) of this section shall apply to a corporation that files an Arkansas consolidated corporation income tax return pursuant to § 26-51-805, provided that each member of the affiliated group shall follow the provisions of § 26-51-805(f) and calculate its contribution limits separately.
3. For purposes of subsection (a) of this section, a cash contribution made in January 2005 for the relief of victims in areas affected by the December 26, 2004 Indian Ocean tsunami, for which a charitable contribution deduction is allowed under 26 U.S.C. § 170, may be treated as if the contribution were made on December 31, 2004, and not in January 2005.
1. In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there shall be allowed as deductions in addition to all other deductions allowed by law the fair market value of donated artistic, literary, and musical creations if:
  1. The taxpayer derives at least fifty percent (50%) of his or her income for the current or the prior tax year from the pursuit of his or her art-related profession;
  2. The fair market value of the art works has been verified by an independent appraiser approved by the Department of Finance and Administration, a copy of which appraisal shall be attached to the taxpayer's state income tax return;
  3. The art works were donated to and accepted by a museum, art gallery, or nonprofit charitable organization qualified under 26 U.S.C. § 501(c)(3) and located in the State of Arkansas; and
  4. The deduction for donated art works does not exceed fifteen percent (15%) of the individual's gross income in the calendar year of the donation.
2. This section shall be effective for income years beginning with income year 1983.
1. In computing net income, there shall be allowed as deductions the following expenses:
  1. Business Expenses. All of 26 U.S.C. § 162, except subsection (n), as in effect on January 1, 2019, regarding trade or business expenses, is adopted for the purpose of computing Arkansas income tax liability;
  2. Medical and Dental Expenses. Title 26 U.S.C. § 213, as in effect on January 1, 2011, is adopted in computing the medical and dental expense deduction under the state income tax law;
  3. Travel Expenses. In determining travel expenses deductible as a business expense in computing net income as provided under subdivision (a)(1) of this section, the deduction for vehicle miles shall be determined by the Secretary of the Department of Finance and Administration under his or her regulatory authority in § 26-18-301; and
  4. Moving Expenses. Title 26 U.S.C. § 217, as in effect on January 1, 2011, regarding the deduction of moving expenses, is adopted for the purpose of computing Arkansas income tax liability.
2. Title 26 U.S.C. § 274, as in effect on January 1, 2019, regarding the deduction of expenses for entertainment, amusement, recreation, business meals, travel, et cetera, is adopted for the purpose of computing Arkansas income tax liability.
3. 1. An individual who is self-employed shall be allowed a deduction equal to the applicable percentage as set forth in 26 U.S.C. § 162(l)(1)(B) as in effect on January 1, 1999, of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his or her spouse, and his or her dependents.
  2. 1. No deduction shall be allowed under this subsection to the extent that the amount of the deduction exceeds the taxpayer's earned income derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established.
    2. This subsection shall not apply to any taxpayer who is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or the spouse of the taxpayer.
  3. Any amount paid by the taxpayer for insurance to which this subsection applies shall not be taken into account in computing the amount allowable to the taxpayer as a deduction under subdivision (a)(2) of this section.
4. Title 26 U.S.C. § 221, as in effect on January 2, 2013, regarding the deduction of interest paid on qualified education loans, is adopted for the purpose of computing Arkansas income tax liability.
5. Title 26 U.S.C. § 198, as in effect on January 1, 2011, regarding the deduction of costs paid or incurred for the cleanup of certain hazardous substances, is adopted for the purpose of computing Arkansas income tax liability.
6. Title 26 U.S.C. § 190, as in effect on January 1, 2001, regarding the deduction of costs paid or incurred to improve access to vehicles and facilities for handicapped and elderly persons, is adopted for the purpose of computing Arkansas income tax liability.
7. 1. A deduction pursuant to subdivision (a)(1) of this section for interest or intangible-related expenses paid by the taxpayer to a related party shall be allowed only if:
    1. The interest or intangible-related income received by the related party is subject to income tax imposed by the State of Arkansas, another state, or a foreign government that has entered into a comprehensive income tax treaty with the United States;
    2. The interest or intangible-related income received by the related party was received pursuant to:
      1. An “arm's length” contract or at an “arm's length” rate of interest; and
      2. A transaction not intended to avoid the payment of Arkansas income tax otherwise due;
    3. The taxpayer and the secretary enter into a written agreement prior to the due date of the taxpayer's Arkansas income tax return:
      1. Authorizing the taxpayer to take the deduction for the tax year at issue; or
      2. Requiring the use of an alternative method of income apportionment by the taxpayer for the tax year at issue; or
    4. During the taxable year, the related party recipient of interest or intangible related income, in a location not described in subdivision (g)(1)(A) of this section, a “non-tax location”:
      1. Operates an active trade or business in the non-tax location;
      2. Has a minimum of fifty (50) full-time-equivalent employees in the non-tax location;
      3. Owns real or tangible personal property with a fair market value in excess of one million dollars ($1,000,000) located in the non-tax location; and
      4. Has revenues generated from sources within the non-tax location in excess of one million dollars ($1,000,000).
  2. “Related party” means a related party as defined by 26 U.S.C. § 267, as in effect on January 1, 2003.
8. Title 26 U.S.C. § 194, as in effect on January 1, 2007, regarding the amortization of qualified reforestation expenses, is adopted for the purpose of computing Arkansas income tax liability.
1. 1. In computing net income there shall be allowed as a deduction any loss sustained during the income year and not compensated for by insurance or otherwise.
  2. In the case of an individual, the deduction under subdivision (a)(1) of this section shall be limited to:
    1. Losses incurred in a trade or business; or
    2. Losses incurred in any transaction entered into for profit, though not connected with the trade or business, including without limitation gambling losses, which are:
      1. Deductible to the extent of gambling winnings; and
      2. Not subject to the two percent (2%) limitation on miscellaneous itemized deductions.
2. Title 26 U.S.C. § 165(h) and (i), as in effect on January 1, 2009, regarding losses arising from a casualty or a disaster, are adopted for the purpose of computing Arkansas income tax liability.
3. Title 26 U.S.C. § 183, as in effect on January 1, 1999, regarding hobby losses, is adopted for the purpose of computing Arkansas income tax liability.
1. Title 26 U.S.C. §§ 167 and 168(a)-(j), as in effect on January 1, 2019, and 26 U.S.C. § 179, as in effect on January 1, 2009, regarding depreciation and expensing of property, are adopted for the purpose of computing Arkansas income tax liability for property purchased in tax years beginning on or after January 1, 2014.
2. The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect to any property shall be the adjusted basis provided in § 26-51-411 for the purpose of determining the gain on the sale or other disposition of the property.
3. Title 26 U.S.C. § 197, as in effect on January 1, 2007, regarding the amortization of goodwill and certain other intangibles, is adopted for the purpose of computing Arkansas income tax liability.
1. Title 26 U.S.C. §§ 167, 168, and 179A, as in effect on January 1, 1999, and 26 U.S.C. § 179 as in effect on January 1, 2007, regarding depreciation and expensing of property, are adopted for the purpose of computing Arkansas income tax liability.
2. The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect to any property shall be the adjusted basis provided in § 26-51-411 for the purpose of determining the gain on the sale or other disposition of the property.
3. Title 26 U.S.C. § 197, as in effect on January 1, 2007, regarding the amortization of goodwill and certain other intangibles, is adopted for the purpose of computing Arkansas income tax liability.
1. In the case of all natural resources for which a deduction for depletion is allowed under 26 U.S.C. §§ 611, the provisions of 26 U.S.C. §§ 611 — 613, 614, 616, and 617, as in effect on January 1, 2019, are adopted in computing the depletion allowance deduction under Arkansas income tax law.
2. In computing the depletion allowance deduction allowed by this section for oil and gas wells, the provisions of 26 U.S.C. § 613 are not in effect, but instead the computation of the amount of the depletion deduction is controlled by the provisions of 26 U.S.C. § 613A, as in effect on January 1, 2019, which are adopted as part of the state income tax law.
1. 1. In lieu of itemizing deductions, each taxpayer may elect to use the standard deduction.
  2. In the case of a married couple, both spouses must elect to use the standard deduction or both spouses must claim itemized deductions, without regard to whether the spouses file separate returns or file separately on the same return.
2. 1. The standard deduction shall be:
    1. For the tax year beginning January 1, 2014, two thousand dollars ($2,000) per taxpayer; and
    2. For tax years beginning on and after January 1, 2015, two thousand two hundred dollars ($2,200) per taxpayer.
  2. In the case of a married couple, each spouse shall be entitled to claim a standard deduction of:
    1. For the tax year beginning January 1, 2014, two thousand dollars ($2,000); and
    2. For tax years beginning on and after January 1, 2015, two thousand two hundred dollars ($2,200).
1. In computing net income, no deduction shall in any case be allowed in respect of:
  1. Personal, living, or family expenses, except that any payments of alimony made by an individual pursuant to a court order shall be deductible;
  2. Any amount paid for new buildings or for permanent improvements or betterments made to increase the value of any property or estate;
  3. Any amount expended in restoring property for which an allowance is to be made;
  4. Premiums paid on life insurance policies; and
  5. Shrinkage in value of property.
2. Title 26 U.S.C. § 265(a), as in effect on January 1, 1993, regarding expenses and interest relating to tax-exempt income, is hereby adopted for the purpose of computing Arkansas individual income tax liability.
3. For the purpose of computing Arkansas corporation income tax liability, no deduction shall be allowed for:
  1. Expenses otherwise allowable as deductions which are allocable to income other than interest, whether or not any amount of income is received or accrued, wholly exempt from the taxes authorized by Arkansas law;
  2. Interest on indebtedness incurred or continued to purchase or carry obligations the interest on which is wholly exempt from the taxes imposed by Arkansas law; and
  3. Expenses otherwise allowable as deductions which are allocable to nonbusiness income.
1. Nonresidents or part-year residents of Arkansas shall compute their taxable income as if all income were earned in Arkansas.
2. Using Arkansas income tax rates, nonresident or part-year residents of Arkansas shall compute their tax liability on the amount computed in subsection (a) of this section.
3. From the tax liability computed in subsection (b) of this section there shall be deducted all allowable credits to determine the amount of tax due.
4. 1. Nonresidents shall divide adjusted gross income from Arkansas sources by the adjusted gross income from all sources to arrive at the applicable percentage that Arkansas adjusted gross income represents of all adjusted gross income received by the taxpayer in the income year.
  2. Part-year residents shall divide adjusted gross income received while an Arkansas resident by the adjusted gross income from all sources to arrive at the applicable percentage that the adjusted gross income received while an Arkansas resident represents of all adjusted gross income received by the taxpayer in the income year.
5. Nonresidents and part-year residents shall multiply the amount computed in subsection (c) of this section by the applicable percentage from subsection (d) of this section in order to determine the amount of income tax which must be paid to the State of Arkansas.
6. For the purpose of ascertaining the income tax due by a nonresident or part-year resident of Arkansas with income derived from two (2) or more states, the credit available under § 26-51-504 for income tax paid to other states shall be calculated in the following manner:
  1. The credit shall not exceed what the tax would be on the outside income, if added to the Arkansas income, and calculated at Arkansas income tax rates; and
  2. The credit is limited to the total income tax owed to other states on income that has been:
    1. Reported as taxable income to both Arkansas and the other states;
    2. Reported as income from all sources; and
    3. Included as Arkansas income.
1. In the case of an individual, the miscellaneous itemized deductions for any taxable year shall be allowed only to the extent that the aggregate of those deductions exceeds two percent (2%) of adjusted gross income.
2. As used in this section, “miscellaneous itemized deductions” means the itemized deductions other than:
  1. The deduction allowed under § 26-51-423(a)(1) relating to expenses in carrying on a trade or business. However, employee business expenses which are not reimbursed by the employer are miscellaneous itemized deductions;
  2. The deduction allowed under § 26-51-423(a)(2) relating to medical, dental, drug, and related healthcare expenses;
  3. The deduction allowed under § 26-51-415 relating to interest;
  4. The deduction allowed under § 26-51-416 relating to taxes;
  5. The deduction allowed under § 26-51-424 relating to losses;
  6. The deduction allowed under § 26-51-419 relating to charitable contributions;
  7. The deduction allowed under § 26-51-422 relating to the donation of artistic, literary, and musical creations; and
  8. The deduction allowed under § 26-51-418.
1. Title 26 U.S.C. § 263A(a)-(h), as in effect on January 1, 2019, regarding capitalization and inclusion in inventory costs of certain expenses, are adopted for the purpose of computing Arkansas income tax liability.
2. Title 26 U.S.C. § 195, as in effect on January 1, 2001, regarding capitalization and amortization of a corporation's start-up expenses, is adopted for the purpose of computing Arkansas income tax liability.
3. Title 26 U.S.C. § 248, as in effect on January 1, 2005, regarding capitalization and amortization of a corporation's organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
4. Title 26 U.S.C. § 709, as in effect on January 1, 2007, regarding the amortization of partnership organizational expenses, is adopted for the purpose of computing Arkansas income tax liability.
1. 1. Subchapter M of the Internal Revenue Code, 26 U.S.C. § 851 et seq., as in effect on January 1, 2019, relating to regulated investment companies, real estate investment trusts, real estate mortgage investment conduits, and financial asset securitization investment trusts, is adopted for the purpose of computing Arkansas income tax liability and shall govern all corporations that are registered as investment companies under the Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq., as in effect on January 1, 2019.
  2. 1. However, those provisions of Subchapter M of the Internal Revenue Code, 26 U.S.C. § 851 et seq., addressing the tax rates applied to financial asset securitization investment trust income are not adopted.
    2. Any financial asset securitization investment trust income subject to Arkansas income tax shall be taxed at the rates set forth in § 26-51-205.
2. As used in this section:
  1. 1. “Captive real estate investment trust” means a real estate investment trust the shares or beneficial interests of which are not regularly traded on an established securities market and more than fifty percent (50%) of the voting power or value of the beneficial interests or shares of which are owned or controlled, directly, indirectly, or constructively by a single entity that is:
      1. Treated as an association taxable as a corporation under the Internal Revenue Code, 26 U.S.C. § 1 et seq., as in effect on January 1, 2009; and
      2. Not exempt from federal income tax under 26 U.S.C. § 501(a), as in effect on January 1, 2009.
    2. “Captive real estate investment trust” does not include a real estate investment trust that is intended to be regularly traded on an established securities market and that satisfies the requirements of 26 U.S.C. § 856(a)(5) and (6), as in effect on January 1, 2009, by reason of 26 U.S.C. § 856(h)(2), as in effect on January 1, 2009; and
  2. “Real estate investment trust” means the same as defined in 26 U.S.C. § 856, as in effect on January 1, 2009.
3. For purposes of applying subdivision (b)(1)(A)(i) of this section, the following entities are not considered an association taxable as a corporation under the Internal Revenue Code, 26 U.S.C. § 1 et seq.:
  1. A real estate investment trust other than a captive real estate investment trust;
  2. A qualified real estate investment trust subsidiary under 26 U.S.C. § 856(i), as in effect on January 1, 2009, other than a qualified real estate investment trust subsidiary of a captive real estate investment trust;
  3. A listed Australian Property Trust, meaning an Australian unit trust registered as a Managed Investment Scheme under the Australian Corporations Act 2001 in which the principal class of units is listed on a recognized stock exchange in Australia and is regularly traded on an established securities market, or an entity organized as a trust, provided that a listed Australian Property Trust owns or controls, directly or indirectly, seventy-five percent (75%) or more of the voting power or value of the beneficial interests or shares of such trust; or
  4. A qualified Foreign Entity, meaning a corporation, trust, association, or partnership organized outside the laws of the United States and which satisfies the following criteria:
    1. At least seventy-five percent (75%) of the entity's total asset value at the close of its taxable year is represented by real estate assets, as defined in 26 U.S.C. § 856(c)(5)(B), as in effect on January 1, 2009, including shares or certificates of beneficial interest in any real estate investment trust, cash and cash equivalents, and United States Government securities;
    2. The entity is not subject to tax on amounts distributed to its beneficial owners or is exempt from entity-level taxation;
    3. The entity distributes at least eighty-five percent (85%) of its taxable income, as computed in the jurisdiction in which it is organized, to the holders of its shares or certificates of beneficial interest on an annual basis;
    4. More than ten percent (10%) of the voting power or value in the entity is not held directly, indirectly, or constructively by a single entity or individual, or the shares or beneficial interests of the entity are regularly traded on an established securities market; and
    5. The entity is organized in a country that has a tax treaty with the United States.
4. The dividends-paid deduction otherwise allowed by federal law in computing net income of a real estate investment trust that is subject to federal income tax shall be added back in computing the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., if the real estate investment trust is a captive real estate investment trust.
5. 1. A real estate investment trust that does not become regularly traded on an established securities market within one (1) year of the date on which it first became a real estate investment trust shall not be considered to have been regularly traded on an established securities market, retroactive to the date it first became a real estate investment trust, and the owner of the real estate investment trust shall file an amended return reflecting the retroactive designation for any tax year or part year occurring during its initial year of status as a real estate investment trust.
  2. Under this section, a real estate investment trust becomes a real estate investment trust on the first day that it has:
    1. Met the requirements of 26 U.S.C § 856 as in effect on January 1, 2009; and
    2. Elected to be treated as a real estate investment trust under 26 U.S.C. § 856(c)(1), as in effect on January 1, 2009, by the owner of the real estate investment trust.
6. Under this section, the constructive ownership rules of 26 U.S.C. § 318(a), as in effect on January 1, 2009, as modified by 26 U.S.C. § 856(d)(5), as in effect on January 1, 2009, shall apply in determining the ownership of stock, assets, or net profits of a person.
7. An election made for federal income tax purposes under Subchapter M of the Internal Revenue Code, 26 U.S.C. § 851 et seq., as in effect on January 1, 2009, shall be deemed made for state income tax purposes.
8. This section shall take effect and be enforced for tax years beginning on or after January 1, 2009.
1. Title 26 U.S.C. § 483, as in effect on January 1, 1999, regarding the allocation of unstated interest, is adopted for the purpose of computing Arkansas income tax liability.
2. Title 26 U.S.C. § 7872, as in effect on January 1, 2019, regarding the taxation of foregone interest on a below-market loan, is adopted for the purpose of computing Arkansas income tax liability.
1. Title 26 U.S.C. § 23, as in effect on January 2, 2013, and 26 U.S.C. § 36C, as in effect on January 2, 2013, are adopted for purposes of determining the allowable credit for adoption-related fees, costs, and expenses paid or incurred by a taxpayer.
2. 1. The amount of credit allowed against Arkansas income tax due is twenty percent (20%) of the federal credit as calculated under 26 U.S.C. §§ 23 and 36C.
  2. The amount of the credit that may be used by a taxpayer for a taxable year may not exceed the amount of income tax otherwise due.
1. 1. All distributions of funds other than principal from the long-term intergenerational trust shall be taxable as provided in the Income Tax Act of 1929, § 26-51-101 et seq.
  2. All distributions from the long-term intergenerational trust shall be deemed principal until all contributions of principal have been withdrawn.
2. 1. In addition to any income tax imposed for distributions from the long-term intergenerational trust as provided in subsection (a) of this section, there is hereby imposed a twenty percent (20%) penalty on all distributions from the long-term intergenerational trust in violation of this section or the Long-Term Intergenerational Security Act of 1995, § 28-72-501 et seq.
  2. The penalty shall be collected by the Department of Finance and Administration and shall be deposited into the State Treasury as general revenue.
3. A beneficiary must file a copy of the long-term intergenerational security trust agreement with his or her income tax return for each taxable year the beneficiary claims the tax benefits provided in this section and the Long-Term Intergenerational Security Act of 1995, § 28-72-501 et seq.
4. Upon the death of the beneficiary, all funds remaining in the long-term intergenerational security trust shall be distributed to the beneficiary's estate, and all undistributed income shall be included in the beneficiary's final tax return.
1. In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there shall be allowed as a deduction in addition to all other deductions allowed by law for a portion of the amount paid by the taxpayer as tuition for the taxpayer, the taxpayer's spouse or dependent to attend a postsecondary educational institution. The deduction shall be equal to fifty percent (50%) of the lesser of either the amount of tuition paid or the weighted average tuition for postsecondary educational institutions of the same classification.
2. On or before November 30, 1998, of each year thereafter, the Secretary of the Department of Finance and Administration shall determine the weighted average tuition of postsecondary institutions of each of the following classifications:
  1. Four-year institutions of higher education;
  2. Two-year institutions of higher education; and
  3. Technical institutes.
3. 1. As used in this section, “weighted average tuition” means the tuition cost resulting from the following calculation:
    1. Add the products of the annual tuition at each state-supported postsecondary institution of the same classification multiplied by that institution's total number of fiscal-year-equated students; and
    2. Divide the gross total of the product from subdivision (c)(1)(A) of this section by the total number of fiscal-year-equated students attending each state-supported postsecondary institution of the same classification.
  2. For four-year institutions of higher education only undergraduate tuition and undergraduate students shall be used in calculating weighted average tuition.
1. Title 26 U.S.C. § 530, as in effect on January 2, 2013, relating to educational individual retirement accounts, is adopted for the purpose of computing Arkansas income tax liability.
2. Any additional tax or penalty imposed by this section shall be ten percent (10%) of the amount of any additional tax or penalty provided in the federal income tax law adopted by this section.
1. In computing net income, there shall be allowed as a deduction the amount paid during a taxable year to the United States Small Business Administration as a guaranty fee associated with the acquisition of United States Small Business Administration financing.
2. The deduction shall be taken only by the small business which is the primary obligor in the financing transaction and which paid the fee.
3. “Small business” means any corporation, partnership, sole proprietorship, limited liability corporation, or other business entity qualifying as “small” under the standards contained in 13 C.F.R. Part 121, as in effect on January 1, 2001.
4. The Revenue Division of the Department of Finance and Administration may promulgate rules as necessary to administer this section.
1. Title 26 U.S.C. § 223(a)-(d), (e)(2), (f), and (g), as in effect on January 1, 2011, regarding a deduction from income for amounts deposited to health savings accounts, is adopted for purposes of computing Arkansas income tax liability.
2. A health savings account is exempt from tax under this chapter unless it no longer meets the requirements of subsection (a) of this section.
1. Title 26 U.S.C. § 1341(a)(1)-(3) and (b)(2), as they existed on January 1, 2013, regarding the computation of income tax when a taxpayer restores a substantial amount held under a claim of right, is adopted for purposes of computing income tax liability under this chapter.
2. 1. Title 26 U.S.C. § 1341(a)(4) and (5), (b)(1), and (b)(3)-(5), concerning the methods of calculating the deduction authorized under 26 U.S.C. § 1341 and special rules for net operating losses and capital losses, are not adopted.
  2. For the purpose of computing income tax when a taxpayer restores a substantial amount held under a claim of right under this section:
    1. The tax imposed under this chapter is calculated for the taxable year by allowing a deduction in the tax year the taxpayer restores the amount held under a claim of right; and
    2. Net operating losses and capital losses are calculated and deducted under §§ 26-51-427 and 26-51-815.
3. The Secretary of the Department of Finance and Administration may promulgate rules to administer this section.
1. In computing net income for the purposes of the Income Tax Act of 1929, § 26-51-101 et seq., there is allowed as a deduction in addition to all other deductions allowed by law for the:
  1. Amount paid by a volunteer firefighter and not reimbursed by the fire department or firefighting unit that the volunteer firefighter serves to purchase firefighting equipment required by the fire department or firefighting unit; and
  2. Loss of value of personal property of a volunteer firefighter that is damaged or destroyed in the course of his or her participation in fire suppression, rescue, pump operation, or other firefighting activity as a volunteer firefighter.
2. The deduction allowed under subsection (a) of this section shall not exceed one thousand dollars ($1,000).
3. As used in this section, “volunteer firefighter” means a member of a fire department or firefighting unit who:
  1. Actively engages in fire suppression, rescue, pump operation, or other firefighting activity; and
  2. Receives less than five thousand dollars ($5,000) in total compensation during the taxable year from the volunteer fire department or firefighting unit that the volunteer firefighter serves.
4. The Secretary of the Department of Finance and Administration may promulgate rules to implement this section.
1. As used in this section:
  1. “Qualified classroom investment expense” means the amount expended by a teacher during the tax year for materials used in the classroom, including without limitation the following:
    1. Books;
    2. School supplies;
    3. Computer equipment and software;
    4. Athletic equipment;
    5. Food for the teacher's students; and
    6. Clothing for the teacher's students; and
  2. “Teacher” means a teacher, instructor, counselor, principal, or aide for students in any grade from prekindergarten through grade twelve (preK-12) who is employed for at least nine hundred (900) hours in a tax year at a school certified by the state to provide public preschool, elementary, or secondary education.
2. In computing net income for the purposes of this chapter, there is allowed as a deduction in addition to all other deductions allowed by law for the qualified classroom investment expenses incurred by a taxpayer.
3. The deduction allowed under subsection (b) of this section shall not exceed two hundred fifty dollars ($250) per taxpayer or five hundred dollars ($500) for taxpayers who are married filing jointly if each taxpayer is a teacher.
4. The Secretary of the Department of Finance and Administration shall promulgate rules to implement this section, including without limitation a form for a taxpayer to use in claiming the deduction provided for under this section.
5. A taxpayer claiming a deduction under this section shall:
  1. Maintain receipts for his or her qualified classroom investment expenses; and
  2. Itemize the qualified classroom investment expenses on the form provided by the Department of Finance and Administration.
1. Except as provided in subsection (b) of this section, 26 U.S.C. § 1400Z-2, as in effect on January 1, 2018, regarding opportunity zones, is adopted for the purpose of computing Arkansas income tax liability.
2. As used in this section and for purposes of the adoption of 26 U.S.C. § 1400Z-2, “opportunity zone” means a population census tract located in Arkansas that is designated as a qualified opportunity zone under 26 U.S.C. § 1400Z-1, as of January 1, 2019.
1. There shall be deducted from the tax after the tax shall have been computed as set forth in the Income Tax Act of 1929, § 26-51-101 et seq., a personal tax credit as follows:
  1. 1. For a single individual, the adjusted individual credit.
    2. However, a taxpayer who was blind or deaf at any time during the income year shall be entitled to an additional tax credit of twenty dollars ($20.00).
    3. A single individual who is deaf-blind shall be entitled to an additional tax credit of forty dollars ($40.00).
    4. A single individual of sixty-five (65) years of age or older shall be entitled to an additional tax credit of twenty dollars ($20.00);
  2. 1. 1. (a) For the head of household, surviving spouse, or a married individual living with husband or wife, the adjusted joint credit.
      2. Subdivision (a)(2)(A)(i) of this section shall apply if the Secretary of the Department of Finance and Administration continues to provide a tax return on which a husband and wife can elect to file jointly or separately on the same return.
    2. However, in the event that the husband or wife shall be sixty-five (65) years of age or older, each of them who is sixty-five (65) years of age or older shall be entitled to an additional tax credit of twenty dollars ($20.00).
    3. However, any husband or wife filing a separate return on a separate tax form shall receive the adjusted individual credit on each return so filed, but if the husband or wife is sixty-five (65) years of age or older, each of them who is sixty-five (65) years of age or older shall be entitled to an additional tax credit of twenty dollars ($20.00).
    4. “Head of household” means the same as defined in 26 U.S.C. § 2(b), as in effect on January 1, 2001.
    5. “Surviving spouse” means the same as defined in 26 U.S.C. § 2(a), as in effect on January 1, 2001;
2. A husband and wife living together and filing either jointly or separately on the same income tax form shall receive only one (1) adjusted joint credit against their aggregate tax.
3. 1. As used in this section, “blind person” means any person:
    1. Who is totally blind, and cannot tell light from darkness;
    2. A person whose central visual acuity does not exceed 20/200 in the better eye with correcting lenses; or
    3. Whose fields of vision are so limited that the widest diameter of the visual field subtends an angle no greater than twenty degrees (20°).
  2. For the purposes of subdivision (a)(1) of this section:
    1. An individual is deaf only if his or her average loss in the speech frequencies which are five hundred hertz (500 Hz) to two thousand hertz (2,000 HZ) in the better ear is eighty-six decibels (86 dB), International Organization for Standardization, or worse; and
    2. An individual is deaf-blind only if he or she is both deaf and blind.
4. For the purposes of this section:
  1. “Adjusted individual credit” shall be twenty dollars ($20.00); and
  2. “Adjusted joint credit” shall be forty dollars ($40.00).
5. 1. 1. Not later than July 15 of each calendar year, the Secretary of the Department of Finance and Administration shall increase the adjusted individual credit and adjusted joint credit by the cost-of-living adjustment for that current calendar year, rounding each amount to the nearest dollar.
    2. The annual cost-of-living adjustment shall apply to the adjusted credits as contained in subdivisions (d)(1) and (2) of this section.
  2. 1. For purposes of subdivision (e)(1) of this section, the cost-of-living adjustment for any calendar year is the percentage, if any, by which the Consumer Price Index for the calendar year preceding the taxable year exceeds the Consumer Price Index for the calendar year 2001.
    2. The Consumer Price Index for any calendar year is the average of the Consumer Price Index as of the close of the twelve-month period ending on August 31 of that calendar year.
    3. As used in this subsection, “Consumer Price Index” means the last Consumer Price Index for All Urban Consumers published by the United States Department of Labor.
  3. The adjusted credit amounts shall apply for tax years beginning on and after January 1, 2003.
  4. The secretary shall not increase the adjusted credit for any calendar year unless the conditions of subsection (f) of this section are met.
6. The adjusted credit applicable for any calendar year shall not be increased unless:
  1. The net available general revenue forecast provided to the Joint Committee on Economic and Tax Policy under § 10-3-1404(a)(1)(A) in May of the calendar year for which a credit increase is contemplated indicates that net available general revenue growth for the fiscal year beginning in the calendar year for which a credit increase is contemplated will be four and two-tenths percent (4.2%) or greater; and
  2. Either:
    1. The net available general revenues for the fiscal year ending in the calendar year for which a credit increase is contemplated exceed the official forecast by at least five-tenths of one percent (0.5%); or
    2. The net available general revenues for the fiscal year ending in the calendar year for which a credit increase is contemplated exceed the total distributions for that fiscal year under the provisions of the Revenue Stabilization Law, § 19-5-101 et seq.
7. Title 26 U.S.C. § 151(c)(6), as in effect on January 1, 2003, regarding the tax treatment of kidnapped children, is adopted for the purpose of computing Arkansas income tax liability.
1. A credit shall be allowed to individuals against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., for expenses for household and dependent care services necessary for gainful employment in the manner prescribed by subsection (b) of this section.
2. 1. Title 26 U.S.C. § 21, as in effect on January 2, 2013, is adopted for purposes of determining the allowable credit under the Income Tax Act of 1929, § 26-51-101 et seq., for household and dependent care services necessary for gainful employment.
  2. The amount of credit shall be twenty percent (20%) of the federal credit allowable.
3. 1. 1. 1. A credit, which is equal to twenty percent (20%) of the federal childcare credit as allowed under 26 U.S.C. § 21, as in effect on January 2, 2013, shall be allowed to qualified individuals against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq.
      2. The twenty-percent childcare credit is refundable.
      3. The excess of the credit over tax liability will be returned to the taxpayer as an overpayment of tax.
    2. “Qualified individual” means a taxpayer who has a dependent child with respect to whom the taxpayer is entitled to a credit under § 26-51-501(a)(3), and who incurs childcare expenses necessary for gainful employment at an approved childcare facility, as defined in subdivision (c)(1)(C) of this section.
    3. “Approved childcare facility” means a childcare facility which provided an appropriate early childhood program, as defined in § 6-45-103, and which is approved in accordance with § 6-45-109.
  2. A taxpayer cannot claim both the credit allowed in subsections (a) and (b) of this section and the credit allowed in subsection (c) of this section.
  3. The credit allowed in this subsection shall be effective for taxable years beginning January 1, 2013.
1. In addition to the state income tax credit permitted by § 26-51-501(a) and (b), any taxpayer in this state who is maintaining, supporting, and caring for an individual with a diagnosis of a developmental disability in the taxpayer's home is permitted, in addition to all other income tax credits, a credit of five hundred dollars ($500) for each income year for that individual.
2. 1. Any person wishing to take advantage of this tax credit must have certification by a licensed physician, licensed psychologist, or licensed psychological examiner that the individual has a diagnosis of a developmental disability.
  2. The certification shall be valid for five (5) years for income tax purposes.
  3. If any person wishes to take advantage of this tax credit after using the certification for five (5) income years, the person must have the individual reevaluated by a licensed physician, licensed psychologist, or licensed psychological examiner for recertification.
  4. The recertification process shall be valid for another five (5) years for income tax purposes.
3. As used in this section:
  1. “Diagnosis of a developmental disability” means a disability of a person that:
    1. Is attributable to:
      1. An intellectual disability, cerebral palsy, epilepsy, spina bifida, Down syndrome, or autism;
      2. Another condition of the person found to be closely related to an intellectual disability because the condition results in an impairment of general intellectual functioning or adaptive behavior similar to that of a person with an intellectual disability or requires treatment and services similar to that required for a person with an intellectual disability; or
      3. Dyslexia resulting from a disability or condition described in subdivision (c)(1)(A)(i) or subdivision (c)(1)(A)(ii) of this section;
    2. Originates before the person reaches twenty-two (22) years of age;
    3. Has continued or can be expected to continue indefinitely; and
    4. Constitutes a substantial handicap to the person's ability to function without appropriate support services, including without limitation:
      1. Planned recreational activities;
      2. Medical services such as physical therapy and speech therapy; and
      3. Possibilities for sheltered employment or job training; and
  2. “Individual” means a child of the taxpayer's blood, an adopted child, or a dependent within the meaning of § 26-51-501(a)(3)(B).
1. 1. For the purpose of ascertaining the income tax due by an individual resident of Arkansas whose gross income includes income derived from property located outside the State of Arkansas, or from business transacted outside the State of Arkansas, the tax shall first be computed as if all of the income of the resident were derived from sources within the State of Arkansas, but a credit shall then be given on the tax as so computed, for the amount of income tax actually owed by the resident for the year to any other state or territory on account of income from property owned or business transacted in the other state or territory. However, credit shall not exceed what the tax would be on the outside income, if added to the Arkansas income, and calculated at Arkansas income tax rates.
  2. 1. For purposes of subdivision (a)(1) of this section, the amount of income tax owed to any other state or territory by a resident shareholder of an S corporation shall be considered to include an amount equal to the shareholder's pro rata share of any net income tax owed by the S corporation to a state which does not recognize S corporations.
    2. As used in subdivision (a)(2)(A) of this section, “net income tax” means any tax imposed on or measured by a corporation's net income.
2. Before a resident of Arkansas may claim the credit allowed under this section, he or she shall file with his or her income tax return any such additional information as the Director of the State Income Tax Division or the Secretary of the Department of Finance and Administration may by rule require showing in detail the amount of gross and net income derived from property owned or business transacted without this state, together with the amount of tax actually owed on the income to another state or territory.
3. The credit against Arkansas income tax afforded individual residents of Arkansas under this section shall also be available to fiduciaries and partnerships residing or domiciled in Arkansas which are subject to Arkansas income tax or which have to report income for purposes of Arkansas income tax.
1. There shall be allowed a credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., § 26-51-205, and § 26-51-303, an amount as determined in subsection (c) of this section, for any taxpayer who establishes or expands a manufacturing enterprise in the State of Arkansas which results in the creation of new additional full-time or part-time jobs within this state.
2. 1. As used in this section, “manufacturing” refers to and includes those operations commonly understood within their ordinary meaning and shall also include mining, quarrying, refining, extracting oil and gas, cotton ginning, the drying of rice, soybeans, and other grains, the manufacturing of feed, processing of poultry or eggs and livestock, and the hatching of poultry.
  2. 1. A “new employee” shall be a person residing and domiciled in this state, hired by the taxpayer to fill a new additional job in this state which previously did not exist in the manufacturing enterprise during the taxable year for which the credit allowed by this section is claimed.
    2. To qualify for the credit provided in this section, the employment of a new employee by the manufacturer must increase the total number of employees who are employed by the manufacturer. In no case shall the new employees allowed for the purpose of the credit exceed the total increase in employment.
    3. A person shall be deemed to be so engaged if that person performs duties in connection with the operation of the business enterprise on:
      1. A regular full-time basis; or
      2. A part-time basis if the person is customarily performing such duties at least twenty (20) hours per week for at least six (6) months during the taxable year.
3. 1. The credit shall be a portion of the state individual or corporate income tax paid by the taxpayer but not in excess of fifty percent (50%) of the tax. The portion shall be an amount determined by multiplying the number of new employees, as defined in subdivision (b)(2) of this section, by one hundred dollars ($100) per eligible new employee per taxable year.
  2. The amount of the credit allowed under subdivision (c)(1) of this section for the taxable year shall be an amount equal to the sum of:
    1. A carryover of prior unused credits arising from the taxable years beginning on or after January 1, 1983, carried to the taxable year; plus
    2. The amount of the credit allowed by subdivision (c)(1) of this section for the taxable year.
  3. If the sum of the amount of the credits under subdivisions (c)(2)(A) and (B) of this section for the taxable year exceeds the limitation imposed by subdivision (c)(1) of this section, the excess shall be treated as a carryover credit and may be carried over for a maximum of three (3) consecutive years following the taxable year in which the credit originated.
4. 1. In the case of a proprietorship or partnership, the amount of the credit determined under this section for any taxable year shall be apportioned to each proprietor or partner in proportion to the amount of income from the manufacturing entity which the proprietor or partner is required to include in his or her gross income.
  2. In the case of a Subchapter S corporation, as allowed by § 26-51-409, the amount of the credit determined under this section for any taxable year shall be apportioned pro rata among the persons who are shareholders of the corporation on the last day of the taxable year.
  3. No credit shall be allowed under this section to any organization which is exempt from state income tax.
  4. In the case of an estate or trust:
    1. The amount of the credit determined under this section for any taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each; and
    2. Any beneficiary to whom any amount has been apportioned under subdivision (d)(4)(A) of this section shall be allowed, subject to the limitations contained in this section, a credit under this section for the amount.
5. 1. The Revenue Division of the Department of Finance and Administration shall promulgate such rules as may be deemed necessary to carry out the purposes of this section.
  2. The Revenue Division of the Department of Finance and Administration shall consult with the Division of Workforce Services and the Arkansas Economic Development Council during the promulgation of the rules.
6. The tax credit provided by this section shall expire on June 30, 1988. Any unused credits may be carried over beyond this date in accordance with subdivision (c)(3) of this section.
1. The intent and purpose of this section is to increase capacity in the State of Arkansas for the use of recovered materials.
2. As used in this section:
  1. “Cost”, in the case of a transfer of title or a finance lease, means the amount of the purchase price, and, in the case of a lease which is not a finance lease but which otherwise qualifies as a purchase under this section, means the amount of the lease payments due to be paid during the term of the lease after deducting any portion of the lease payments attributable to interest, insurance, and taxes;
  2. “Equipment to service waste reduction, reuse, or recycling equipment” means expenditures, machinery, or equipment that keeps existing machinery or equipment in running order by providing repair, maintenance, adjustment, inspection, or supplies;
  3. “Finance lease” means a lease agreement which is treated as a purchase by a lessee for Arkansas income tax purposes;
  4. “Home scrap” means materials or by-products generated from and commonly reused within an original manufacturing process;
  5. “Maintenance” means expenditures, machinery, or equipment used to keep existing machinery or equipment in a condition that approaches or equates to its original condition;
  6. “Motor vehicle” means a vehicle or trailer that is licensed, or that normally would be licensed, for use on highways in Arkansas;
  7. “Postconsumer waste” means products or other materials generated by a business, governmental entity, or consumer which have served their intended end use and have been recovered from or otherwise diverted from the solid waste stream for the purpose of recycling;
  8. “Preconsumer material” means material generated during any step in the production of a product and recovered or otherwise diverted from the solid waste stream for the purpose of recycling but does not include home scrap;
  9. “Purchase” means a transaction under which title to an item is transferred for consideration or a lease contract for a period of at least three (3) years regardless of whether title to the item is transferred at the end of such period;
  10. “Qualified expansion project” means an expansion of a taxpayer's facility that:
    1. Is commenced on or after January 1, 2017;
    2. Is conducted on the site of a qualified manufacturer of steel, as defined in § 26-51-1211, § 26-52-901, § 26-52-911, Acts 2013, No. 1084, or Acts 2013, No. 1476;
    3. Has a total investment of at least one billion dollars ($1,000,000,000);
    4. Is undertaken by a taxpayer that has entered into an agreement with the State of Arkansas in which the taxpayer made a commitment to create at least five hundred (500) net new direct positions and independent direct positions as those terms are defined in Acts 2013, No. 1084, § 8, with an average annual wage of at least seventy-five thousand dollars ($75,000);
    5. Provides a positive cost-benefit analysis to the state as determined by the Arkansas Economic Development Commission and the Office of Economic Analysis and Tax Research before an incentive agreement between the state and the taxpayer is executed;
    6. Is certified as having a closing date before July 1, 2018, by which the taxpayer has certified and the state has verified that necessary capital acquisition and borrowing for the qualified expansion project has occurred to:
      1. Secure a site;
      2. Obtain engineering services;
      3. Purchase equipment; and
      4. Commence initial construction; and
    7. Is undertaken by a taxpayer that has elected by agreement with the State of Arkansas for the expansion of the taxpayer's facility to be classified as a qualified expansion project under this section;
  11. “Qualified steel specialty products manufacturing facility” means a facility:
    1. For which the taxpayer commenced construction on or after January 1, 2017;
    2. That is located in Arkansas;
    3. That melts scrap steel in an electric arc furnace to produce one (1) or more specialty steel products, including without limitation billets, structural shapes, reinforcing bars, coiled reinforcing bars, wire rods, and merchant bars;
    4. In which the taxpayer has a total investment in excess of two hundred million dollars ($200,000,000);
    5. That is undertaken by a taxpayer that has entered into an agreement with the State of Arkansas in which the taxpayer made a commitment to create at least one hundred fifty (150) net new direct positions and independent direct positions as those terms are defined in Acts 2013, No. 1084, § 8, with an average annual wage of at least seventy-five thousand dollars ($75,000);
    6. That provides a positive cost-benefit analysis to the state as determined by the Arkansas Economic Development Commission and the Office of Economic Analysis and Tax Research before an incentive agreement between the state and the taxpayer is executed;
    7. That is certified as having a closing date before July 1, 2018, by which the taxpayer has certified and the state has verified that necessary capital acquisition and borrowing for the qualified steel specialty products manufacturing facility has occurred to:
      1. Secure a site;
      2. Obtain engineering services;
      3. Purchase equipment; and
      4. Commence initial construction; and
    8. That is undertaken by a taxpayer that has elected by agreement with the State of Arkansas for the facility to be classified as a qualified steel specialty products manufacturing facility under this section;
  12. “Recovered materials” means those materials which have been separated, diverted, or removed from the waste stream for the purpose of recycling and includes preconsumer material and postconsumer waste but not home scrap;
  13. “Recycling” means the systematic collecting, sorting, decontaminating, and returning of waste materials to commerce as commodities for use or exchange;
  14. “Repair” means expenditures, machinery, or equipment used to restore existing machinery or equipment to its original or similar condition and capacity after damage or after deterioration from use;
  15. “Solid waste” means all putrescible and nonputrescible wastes in solid or semisolid form, including, but not limited to, yard or food waste, waste glass, waste metals, waste plastics, wastepapers, waste paperboard, and all other solid or semisolid wastes resulting from industrial, commercial, agricultural, community, and residential activities; and
  16. 1. 1. “Waste reduction, reuse, or recycling equipment” means new or used machinery or equipment located in Arkansas on the last day of the taxable year which is operated or used exclusively in Arkansas to collect, separate, process, modify, convert, or treat solid waste so that the resulting product may be used as a raw material or for productive use or to manufacture products containing recovered materials.
      2. “Waste reduction, reuse, or recycling equipment” also includes devices which are directly connected with or are an integral and necessary part of such machinery or equipment and are necessary for such collection, separation, processing, modification, conversion, treatment, or manufacturing.
    2. “Waste reduction, reuse, or recycling equipment” does not include motor vehicles.
3. 1. There shall be allowed a tax credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in an amount as determined in subsection (e) of this section for any taxpayer engaged in the business of reducing, reusing, or recycling solid waste for commercial purposes who purchases waste reduction, reuse, or recycling equipment used exclusively for the purpose of reducing, reusing, or recycling solid waste.
  2. 1. 1. If the tax credits are allowed with respect to a taxpayer pursuant to a qualified Amendment 82 project under the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., that, as of the end of the taxable year in which such tax credits are first allowed, does not have a public retirement system of the State of Arkansas as a proprietor, partner, member, or shareholder, no more than twenty million dollars ($20,000,000) of credit against tax or an amount equal to the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., whichever is less, issued to the taxpayer making the purchases of waste reduction, reuse, or recycling equipment under subdivision (c)(1) of this section may be claimed each tax year.
      2. Any unused tax credit that cannot be claimed in a tax year by operation of subdivision (c)(2)(A)(i) of this section may be carried forward as allowed by law. If a tax credit amount disallowed by operation of subdivision (c)(2)(A)(i) of this section would otherwise expire, the carry forward period for such unused tax credit shall instead be extended each year, for one (1) additional year at a time, to preserve the ability of the taxpayer to apply the unused tax credit to future tax liability.
    2. 1. If tax credits are allowed under this section with respect to a qualified Amendment 82 project under the Arkansas Amendment 82 Implementation Act, § 15-4-3201 et seq., and any portion of the tax credits under this section would be apportioned to a public retirement system of the State of Arkansas as a proprietor, partner, member, or shareholder of the taxpayer, the public retirement system shall have the possession and control of all tax credits, including any such tax credits otherwise apportioned to the other proprietors, partners, members, shareholders, or beneficiaries allowed under this section.
      2. The possession and control of the tax credits by the public retirement system under this subdivision (c)(2)(B) shall be confirmed in writing by a legal opinion issued by the Department of Finance and Administration under the department's promulgated rules.
      3. The public retirement system shall sell or transfer for value the tax credits allowed under this section to the State of Arkansas for eighty percent (80%) of the face value, in lieu of the right of a proprietor, partner, member, shareholder, or beneficiary of the qualified Amendment 82 project to claim the tax credits as allowed pursuant to applicable state law. No more than twenty million dollars ($20,000,000) of the tax credits in possession and control of the public retirement system with respect to a qualified Amendment 82 project pursuant to subdivision (c)(2)(B)(i) of this section may be sold or transferred each year.
      4. Any unused tax credit that cannot be sold or transferred in a tax year by the operation of subdivision (c)(2)(B)(iii) of this section may be carried forward as allowed by law. If a tax credit amount disallowed by operation of subdivision (c)(2)(B)(iii) of this section would otherwise expire, the carry forward period for such unused tax credit shall instead be extended each year, for one (1) additional year at a time, to preserve the ability of the public retirement system to sell or transfer all unused tax credits in future years.
      5. Repayment provisions in the applicable Amendment 82 agreement shall continue to apply to tax credits carried forward under subdivision (c)(2)(B)(iv) of this section and in the possession and control of a public retirement system of the State of Arkansas.
      6. Beginning July 1, 2016, by July 15 of each year, the public retirement system with possession and control of the tax credits under this subdivision (c)(2)(B) shall provide notice to the department of the amount of tax credits, including tax credits pending certification by the Division of Environmental Quality, subject to the limitations in subdivision (c)(2)(B)(iii) of this section, to be sold or transferred for value.
      7. The State of Arkansas shall pay the purchase price equal to eighty percent (80%) of the face value of all of the tax credits included in the notice required in subdivision (c)(2)(B)(vi) of this section on or before June 30 of the year following the year in which the notice was provided for all tax credits certified by the Division of Environmental Quality by June 30 of the year following the year in which the notice was provided by warrant from the Economic Development Incentive Fund funded by a transfer from general revenue.
      8. Tax credits under this section sold or transferred for value to the State of Arkansas are extinguished upon payment of the purchase price as if claimed against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq.
        
        In the event the State of Arkansas fails to timely pay the purchase price, as required in subdivision (c)(2)(B)(vii) of this section, for the tax credits included in the notice required in subdivision (c)(2)(B)(vi) of this section, the public retirement system may, before the end of the taxable year following the taxable year in which a failure to pay occurs, sell or transfer for value such tax credits to one (1) or more persons. Such person or persons may claim such tax credits in accordance with applicable law, provided however, any tax credits sold or transferred for value to such person or persons under this subdivision (c)(2)(B)(viii)(b) shall not expire before the later of the end of:
        
        The sale or transfer of tax credits under this subdivision (c)(2)(B)(viii)(b) shall be confirmed in writing by a legal opinion issued by the department under the department’s promulgated rules.
        
        Up to eleven million dollars ($11,000,000) of credit against tax or an amount equal to the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., whichever is less, issued to the taxpayer making the purchases of waste reduction, reuse, or recycling equipment under subdivision (c)(1) of this section may be claimed each tax year if the tax credits are allowed with respect to a qualified expansion project:
        
        Up to the following amounts of credit against tax or an amount equal to the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., whichever is less, issued to the taxpayer making the purchases of waste reduction, reuse, or recycling equipment under subdivision (c)(1) of this section may be claimed each tax year if the tax credits are allowed with respect to a qualified steel specialty products manufacturing facility that is owned by a taxpayer that, at the time of the agreement described in subdivision (b)(11)(E) of this section is a proprietorship, partnership, limited liability company, or other business organization treated as a proprietorship or partnership for tax purposes, and that, as of the end of the taxable year in which such tax credits are first allowed, does not have a public retirement system of the State of Arkansas as a proprietor, partner, member, or shareholder:
        
        Any unused tax credit that cannot be claimed in a tax year by operation of subdivision (c)(3)(A) or subdivision (c)(3)(B) of this section may be carried forward as allowed by law. If a tax credit amount disallowed by operation of subdivision (c)(3)(A) or subdivision (c)(3)(B) of this section would otherwise expire, the carry-forward period for such unused tax credit shall instead be extended each year, for one (1) additional year at a time, to preserve the ability of the taxpayer to apply the unused tax credit to future tax liability.
        
        (i) If tax credits are allowed under this section with respect to a qualified expansion project or a qualified steel specialty products manufacturing facility of a taxpayer that, at the time of the agreement described in subdivision (b)(10)(D) of this section for a qualified expansion project or subdivision (b)(11)(E) of this section for a qualified specialty steel products manufacturing facility, is a proprietorship, partnership, limited liability company, or other business organization treated as a proprietorship or partnership for tax purposes, and any portion of the tax credits under this section would be apportioned to a public retirement system of the State of Arkansas as a proprietor, partner, member, or shareholder of the taxpayer, the public retirement system shall have the possession and control of all tax credits, including any such tax credits otherwise apportioned to the other proprietors, partners, members, shareholders, or beneficiaries allowed under this section.
        
        No more than the following amounts of the tax credits in possession and control of the public retirement system with respect to a qualified expansion project pursuant to subdivision (c)(3)(D)(i) of this section may be sold or transferred each year:
        
        For a total investment in the qualified steel specialty products manufacturing facility of at least two hundred million dollars ($200,000,000) but less than two hundred seventy-five million dollars ($275,000,000), four million dollars ($4,000,000);
        
        For a total investment in the qualified steel specialty products manufacturing facility of at least two hundred seventy-five million dollars ($275,000,000) but less than three hundred fifty million dollars ($350,000,000), five million dollars ($5,000,000); and
        
        For a total investment in the qualified steel specialty products manufacturing facility of at least three hundred fifty million dollars ($350,000,000), six million five hundred thousand dollars ($6,500,000).
        
        The carry-forward period for such tax credits under applicable law; or
        
        The third taxable year following the year in which such tax credits were sold or transferred for value pursuant to this section.
        
        Equipment used to service the waste reduction, reuse, or recycling equipment.
  3. Annual salary requirements for the new full-time direct positions and independent direct positions as those terms are defined in Acts 2013, No. 1084, § 8, created by the project;
  4. Timeline for fulfilling the investment of job creation targets stated in the performance and claw back agreement; and
  5. Conditions for the claw back provisions, which shall be triggered if, during the test period stated in this subdivision (c)(3)(F)(ii), the taxpayer:
    1. Does not meet the required targets of the project related to capital investment, job creation, timeline, or annual salary amounts; or
    2. Fails to maintain a positive cost-benefit analysis.
4. To claim the benefits of this section, a taxpayer must obtain a certification from the Director of the Division of Environmental Quality certifying to the Revenue Division of the Department of Finance and Administration that:
  1. The taxpayer is engaged in the business of reducing, reusing, or recycling solid waste material for commercial purposes, whether or not for profit;
  2. The machinery or equipment purchased is waste reduction, reuse, or recycling equipment;
  3. The machinery or equipment is being used in the collection, separation, processing, modification, conversion, treatment, or manufacturing of products containing at least fifty percent (50%) recovered materials, provided that at least ten percent (10%) of the recovered materials shall be post-consumer waste; and
  4. The taxpayer has filed a statement with the director acknowledging that the taxpayer will make a good faith effort to utilize post-consumer waste generated in Arkansas as at least ten percent (10%) of the post-consumer waste being used in the equipment, to the extent available at a competitive price.
5. 1. The amount of the credit allowed under subsection (c) of this section shall be equal to thirty percent (30%) of the cost of waste reduction, reuse, or recycling equipment, including the cost of installation.
  2. The cost of installation shall not include the cost of:
    1. Feasibility studies;
    2. Engineering costs of a building to house the equipment and related machinery; or
  3. 1. The cost of replacement parts which serve only to keep existing waste reduction, reuse, or recycling equipment in its ordinary efficient operating condition shall not be included in determining the amount of the credit.
    2. The cost of replacement of existing waste reduction, reuse, or recycling equipment shall not be included in determining the amount of the credit unless the replacement provides greater capacity for recycling or provides the capability to collect, separate, process, modify, convert, treat, or manufacture additional or a different type of solid waste.
  4. The cost of service contracts, sales tax, maintenance, and repairs shall not be included in determining the amount of the credit.
6. 1. The taxpayer shall refund the amount of the tax credit determined by subdivision (f)(2) of this section if, within three (3) years of the taxable year for which a credit is allowed:
    1. The waste reduction, reuse, or recycling equipment is removed from Arkansas, is disposed of, is transferred to another person, or the taxpayer otherwise ceases to use the required materials or operate in the manner required by this section; or
    2. The director finds that the taxpayer has demonstrated a pattern of intentional failure to comply with final administrative or judicial orders which clearly indicates a disregard for environmental regulation or a pattern of prohibited conduct which could reasonably be expected to result in adverse environmental impact.
  2. If the provisions of subdivision (f)(1) of this section apply, the taxpayer shall refund the amount of the tax credit which was deducted from income tax liability which exceeds the following amounts:
    1. Within the first year, zero dollars ($0.00);
    2. Within the second year, an amount equal to thirty-three percent (33%) of the amount of credit allowed; and
    3. Within the third year, an amount equal to sixty-seven percent (67%) of the credit allowed.
  3. Any refund required by subdivision (f)(1)(A) of this section shall apply only to the credit given for the particular waste reduction, reuse, or recycling equipment to which subdivision (f)(1)(A) of this section applies.
  4. Any taxpayer who is required to refund part of a credit pursuant to this subsection shall no longer be eligible to carry forward any amount of that credit which had not been used as of the date such refund is required.
  5. This subsection shall apply to all credits which are certified as a result of applications for certification filed with the Division of Environmental Quality on or after July 1, 1993.
7. 1. Waste reduction, reuse, or recycling equipment shall only be eligible for one (1) tax credit.
  2. The sale or transfer of waste reduction, reuse, or recycling equipment shall not recreate the eligibility for a tax credit.
8. 1. In the case of a proprietorship or partnership engaged in the business of waste reduction, reuse, or recycling of solid waste, the amount of the credit determined under this section for any taxable year shall be apportioned to each proprietor or partner in proportion to the amount of income from the entity which the proprietor or partner is required to include as gross income.
  2. In the case of a Subchapter S corporation, as allowed by § 26-51-409, the amount of the credit determined under this section for any taxable year shall be apportioned among the persons who are shareholders of the corporation on the last day of the taxable year based on each person's percentage of ownership.
  3. In the case of an estate or trust:
    1. The amount of the credit determined under this section for any taxable year shall be apportioned between the estate or trust and the beneficiaries on the basis of the income of the estate or trust allocable to each; and
    2. Any beneficiary to whom any amount has been apportioned under this subsection shall be allowed, subject to limitations contained in this section, a credit under this section for the amount.
9. 1. The amount of the credit that may be used by a taxpayer for a taxable year may not exceed the amount of state, individual, or corporate income tax otherwise due.
  2. Any unused credit may be carried over for a maximum of three (3) consecutive years following the taxable year in which the credit originated.
10. A taxpayer who receives a credit under this section shall not be entitled to claim any other state or local tax credit or deduction based on the purchase of the machinery or equipment, except for the deduction for normal depreciation.
11. 1. 1. The Division of Environmental Quality and the Revenue Division of the Department of Finance and Administration shall promulgate rules as are necessary to administer this section.
    2. These rules may include, but are not limited to, the establishment of technical specifications and of requirements for information and documentation for taxpayers seeking a credit under this section and shall encourage, but not require, the use of Arkansas contractors and post-consumer waste generated in Arkansas in recycling projects which qualify for credits provided by this section.
  2. In order to determine eligibility for the credit or to ensure that the machinery or equipment is being utilized in the required manner, each agency shall have the right to inspect facilities and records of a taxpayer requesting or receiving a credit under this section.
12. Any person or legal entity aggrieved by a decision of the director under subsection (d) of this section or subdivision (f)(1)(B) of this section may appeal to the Arkansas Pollution Control and Ecology Commission through administrative procedures adopted by the Arkansas Pollution Control and Ecology Commission and to the courts in the manner provided in §§ 8-4-222 — 8-4-229.
1. A business which qualifies for the exemption from the gross receipts tax under former § 26-52-401(29) shall be allowed an income tax credit of three and nine-tenths percent (3.9%) of the annual salary of employees employed exclusively in providing childcare services.
2. If two (2) or more businesses participate in a childcare program for their employees as provided by former § 26-52-401(29), then each business will be allowed an income tax credit of three and nine-tenths percent (3.9%) of the annual salary of only those employees who are on the respective business' payroll and are employed exclusively for providing childcare services.
3. 1. To qualify for the income tax credit, the revenue to the business or businesses from the childcare facility cannot exceed the direct operating costs of the facility. If, on an annual basis, the childcare facility receives revenue which exceeds the direct operating costs of the facility, the business or businesses will not be entitled to the income tax credit.
  2. As used in this section, “direct operating costs” means:
    1. The cost of food and beverages provided to the children;
    2. The cost of labor for personnel whose services are performed exclusively on the premises of the childcare facility for the care of the children and all related employment taxes paid by the employer; and
    3. All materials and supplies necessary to operate the childcare facility.
4. The income tax credit created by subsection (a) of this section shall first be available in the taxable year following the year the business makes payment of wages to childcare workers. To the extent that the credit is not fully utilized in this first year, it may be carried forward for an additional two (2) years. Any credit remaining thereafter shall expire.
5. The income tax provisions of this section shall be in full force and effect for all income tax years beginning on and after January 1, 1993.
1. A business which qualifies for the refund of the gross receipts tax or compensating use tax under § 26-52-516 or § 26-53-132 shall be allowed an income tax credit of three and nine-tenths percent (3.9%) of the annual salary of its employees employed exclusively in providing childcare service, or a five-thousand-dollar income tax credit for the first tax year the business provides its employees with a childcare facility.
2. If two (2) or more businesses participate in a childcare program for their employees as provided by § 26-52-516 or § 26-53-132, then each business will be allowed an income tax credit of three and nine-tenths percent (3.9%) of the annual salary of only those employees who are on the respective business' payroll and are employed exclusively for providing childcare services. The first year's five-thousand-dollar credit will be prorated among the businesses based upon the percentage of the cost paid by each business for the initial construction and equipping of the childcare facility.
3. 1. 1. To qualify for the income tax credit, the revenue to the business or businesses from the childcare facility cannot exceed the direct operating costs of the facility.
    2. If, on an annual basis, the business receives revenues from the operation of the childcare facility which exceed the direct operating costs of the facility, the businesses will not be entitled to the income tax credit.
  2. As used in this subsection, “direct operating costs” means:
    1. The cost of food and beverages provided to the children;
    2. The cost of labor for personnel whose services are performed exclusively on the premises of the childcare facility for the care of the children and all related employment taxes paid by the employer; and
    3. All materials and supplies necessary to operate the childcare facility.
4. The income tax credit created by subsection (a) of this section shall first be available in the taxable year following the year the business makes payment of wages to childcare workers. To the extent that the credit is not fully utilized in this first year, it may be carried forward for an additional two (2) years. Any credit remaining thereafter shall expire.
1. As used in this section, “apprentice” means a worker who is at least sixteen (16) years of age and is employed:
  1. To learn an apprenticeable occupation under 29 C.F.R. § 29.1 et seq., as it existed on January 1, 1995; or
  2. In an apprenticeship or work-based learning program that meets:
    1. Either the standards of program design for a nationally recognized curriculum or business, industry, or trade association standards; and
    2. The criteria for vocationally approved apprentice or work-based learning programs.
2. 1. 1. A taxpayer who employs an apprentice is allowed an income tax credit in the amount of two thousand dollars ($2,000) or ten percent (10%) of the wages earned by the apprentice, whichever is less, against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., for each apprentice.
    2. However, the total amount of the income tax credit that a taxpayer may claim under this section for a tax year shall not exceed ten thousand dollars ($10,000).
  2. 1. A partner's or member's distributive share of the income tax credit shall be determined by the partnership or limited liability company agreement, unless the agreement does not have substantial economic effect or does not provide for the allocation of the income tax credits.
    2. If the agreement does not have substantial economic effect or does not provide for the allocation of the income tax credit, the income tax credit shall be allocated according to the partner's or member's interest in the partnership or limited liability company, pursuant to 26 U.S.C. § 704(b), as in effect on January 1, 1995.
3. 1. To claim the benefits of this section, a taxpayer shall obtain a certification from the following, certifying to the Department of Finance and Administration that the taxpayer has met all the requirements and qualifications stated in this section:
    1. If the apprentice is employed as described in subdivision (a)(1) of this section, the United States Office of Apprenticeship; or
    2. If the apprentice is employed as described in subdivision (a)(2) of this section, the Office of Skills Development.
  2. The certification to the department shall include the total amount of wages paid to each apprentice employed by the taxpayer or organization exempt from taxation under 26 U.S.C. § 501(c)(3) in the taxable year for which the taxpayer claims the income tax credit provided in this section.
4. 1. The amount of the income tax credit that may be used by a taxpayer for a taxable year may not exceed the amount of individual or corporate income tax otherwise due.
  2. Any unused income tax credit may be carried over for a maximum of two (2) consecutive taxable years.
5. If the business is an S corporation, the pass-through provisions of § 26-51-409, as in effect for the taxable year the income tax credit is earned, shall be applicable.
6. A taxpayer who trains an apprentice as provided in subsection (b) of this section is entitled to the income tax credit provided in this section for the apprentice, even though the apprentice receives his or her wages for such training from an organization exempt from taxation under 26 U.S.C. § 501(c)(3).
7. 1. The department shall promulgate such rules as may be deemed necessary to carry out the purposes of this section.
  2. The department shall consult with the United States Office of Apprenticeship and the Office of Skills Development during the promulgation of the rules.
1. As used in this section:
  1. “Coal mining enterprise” means:
    1. An Arkansas taxpayer primarily engaged in surface or highwall mining, producing, or extracting coal in Arkansas; and
    2. A holder of a valid mining permit issued by the Division of Environmental Quality to allow surface or highwall mining;
  2. “Eligible transferee” means any Arkansas taxpayer subject to the Income Tax Act of 1929, § 26-51-101 et seq., the premium tax imposed by § 23-75-119, or the premium tax imposed by § 23-63-1614; and
  3. “Taxpayer” means a coal mining enterprise or an eligible transferee.
2. 1. There shall be allowed a credit against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., the premium tax imposed by § 23-75-119, or the premium tax imposed by § 23-63-1614 in an amount as determined in subsection (c) of this section for a taxpayer.
  2. A credit allowed under this section shall expire after five (5) tax years following the tax year in which the tax credit was earned.
3. 1. 1. A credit of two dollars ($2.00) per ton of coal mined, produced, or extracted shall be allowed on each ton of coal mined in Arkansas by a coal mining enterprise in a tax year.
    2. An additional credit of three dollars ($3.00) per ton of coal mined, produced, or extracted shall be allowed on each ton of coal mined in Arkansas in excess of fifty thousand (50,000) tons by a coal mining enterprise in a tax year.
  2. A credit under this section is earned only if the coal is sold to an electric generation plant for less than forty dollars ($40.00) per ton excluding freight charges.
  3. At the election of the taxpayer, the credit may be treated as:
    1. Payment of a tax;
    2. Prepayment of a tax; or
    3. Prepayment of an estimated tax.
4. 1. The credits allowed under this section shall be freely transferable by written agreement to subsequent transferees at any time during the five (5) years following the year the credit was earned.
  2. A coal mining enterprise that has earned a credit under this section may transfer the credit in writing to an eligible transferee.
  3. 1. The coal mining enterprise and the eligible transferee shall jointly file a copy of the written credit transfer agreement with the Secretary of the Department of Finance and Administration within thirty (30) days of the credit transfer.
    2. The written credit transfer agreement shall contain:
      1. The name of the parties to the transfer;
      2. The amount of the credit transferred;
      3. The tax year that the credit was originally earned by the coal mining enterprise; and
      4. The tax year or years in which the credit may be claimed.
    3. 1. The Department of Finance and Administration shall promulgate rules to permit the verification of the validity and timeliness of a claimed tax credit that has been transferred under this subsection.
      2. The rules shall not unduly restrict or hinder the transfers of credits under this section.
1. As used in this section:
  1. “End user” means a person who purchases and uses rice straw for processing, manufacturing, generating energy, or producing ethanol; and
  2. “Rice straw” means the dry stems of rice left after the seed heads have been removed.
2. 1. There is allowed a credit against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in the amount of fifteen dollars ($15.00) for each ton of rice straw over five hundred (500) tons that is purchased by an Arkansas taxpayer who is the end user.
  2. The amount of credit that may be used by the taxpayer for a taxable year may not exceed fifty percent (50%) of the amount of income tax due for that tax year.
  3. Any unused credit may be carried forward for ten (10) consecutive tax years following the tax year the credit was earned.
3. A taxpayer who claims a credit under this section shall not claim any other state tax credit or deduction for the purchase of rice straw.
1. In addition to any income tax credit not related to the same eligible property for which a taxpayer qualifies, the taxpayer is allowed an income tax credit for the amount of the Arkansas historic rehabilitation income tax credit allowed by the certification of completion issued by the Division of Arkansas Heritage under the Arkansas Historic Rehabilitation Income Tax Credit Act, § 26-51-2201 et seq.
2. The amount of the income tax credit under this section that may be claimed by the taxpayer in a tax year shall not exceed the amount of state income tax due by the taxpayer.
3. Any unused income tax credit under this section may be carried forward for a maximum of five (5) consecutive tax years for credit against the state income tax.
4. The Secretary of the Department of Finance and Administration shall promulgate rules to implement this section.
1. “Business income” means income arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations.
2. “Commercial domicile” means the principal place from which the trade or business of the taxpayer is directed or managed.
3. “Compensation” means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services.
4. [Repealed.]
5. “Nonbusiness income” means all income other than business income.
6. “Public utility” means any business entity which owns or operates for public use any plant, equipment, property, franchise, or license for the transmission of communications, transportation of goods or persons, or the production, storage, transmission, sale, delivery, or furnishing of electricity, water, steam, oil, oil products, or gas.
7. “Sales” means all gross receipts of the taxpayer not allocated under §§ 26-51-704 — 26-51-708.
8. “State” means any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.
1. Net rents and royalties from real property located in this state are allocable to this state.
2. Net rents and royalties from tangible personal property are allocable to this state:
  1. if and to the extent that the property is utilized in this state, or
  2. in their entirety if the taxpayer's commercial domicile is in this state and the taxpayer is not organized under the laws of or taxable in the state in which the property is utilized.
3. The extent of utilization of tangible personal property in a state is determined by multiplying the rents and royalties by a fraction, the numerator of which is the number of days of physical location of the property in the state during the rental or royalty period in the taxable year and the denominator of which is the number of days of physical location of the property everywhere during all rental or royalty periods in the taxable year. If the physical location of the property during the rental or royalty period is unknown or unascertainable by the taxpayer, tangible personal property is utilized in the state in which the property was located at the time the rental or royalty payer obtained possession.
1. Capital gains and losses from sales of real property located in this state are allocable to this state.
2. Capital gains and losses from sales of tangible personal property are allocable to this state if:
  1. the property had a situs in this state at the time of the sale, or
  2. the taxpayer's commercial domicile is in this state, or
  3. the property has been included in depreciation which has been allocated to this state; in which event gains or losses on such sales shall be allocated on the percentage that is used in the formula for allocating income to Arkansas during the year of such sales.
3. Capital gains and losses from sales of intangible personal property are allocable to this state if the taxpayer's commercial domicile is in this state.
1. Patent and copyright royalties are allocable to this state:
  1. if and to the extent that the patent or copyright is utilized by the payer in this state, or
  2. if and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in this state.
2. A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer's commercial domicile is located.
3. A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer's commercial domicile is located.
1. the individual's service is performed entirely within the state; or
2. the individual's service is performed both within and without the state, but the service performed without the state is incidental to the individual's service within the state; or
3. some of the service is performed in the state and (1) the base of operations or, if there is no base of operations, the place from which the service is directed or controlled is in the state, or (2) the base of operations or the place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in this state.
1. the property is delivered or shipped to a purchaser, other than the United States government, within this state regardless of the f.o.b. point or other conditions of the sale; or
2. the property is shipped from an office, store, warehouse, factory, or other place of storage in this state and (1) the purchaser is the United States government or (2) the taxpayer is not taxable in the state of the purchaser.
1. the income-producing activity is performed in this state; or
2. the income-producing activity is performed both within and without the state, in which event the portion of income allocable to this state shall be the percentage that is used in the formula for allocating income to Arkansas during the year of the sale.
1. separate accounting;
2. the exclusion of any one or more of the factors;
3. the inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or
4. the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
1. separate accounting;
2. the inclusion of one or more additional factors which will fairly represent the taxpayer's business activity in this state; or
3. the employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
1. Every person owning property or doing business in the State of Arkansas shall file a return with the Secretary of the Department of Finance and Administration showing his or her gross income and the deductions or credits allowed by § 26-51-301, § 26-51-302 [repealed], and § 26-51-436 if he or she has a gross income of:
  1. Three thousand nine hundred ninety-nine dollars ($3,999) if married and not filing jointly or married but living apart from the spouse at the end of the income year or on the date the spouse died;
  2. Seven thousand eight hundred dollars ($7,800) if single and under sixty-five (65) years of age;
  3. Nine thousand three hundred dollars ($9,300) if single and sixty-five (65) years of age or over;
  4. Twelve thousand one hundred dollars ($12,100) if head of household and under sixty-five (65) years of age;
  5. Thirteen thousand dollars ($13,000) if head of household and sixty-five (65) years of age or over;
  6. Fifteen thousand five hundred dollars ($15,500) if married, filing jointly, and both spouses are under sixty-five (65) years of age;
  7. Fifteen thousand six hundred dollars ($15,600) if married, filing jointly, and one (1) spouse is sixty-five (65) years of age or older;
  8. Sixteen thousand two hundred dollars ($16,200) if married, filing jointly, and both spouses are sixty-five (65) years of age or over;
  9. Fifteen thousand five hundred dollars ($15,500) if a qualifying widow or widower with a dependent child and under sixty-five (65) years of age; or
  10. Sixteen thousand dollars ($16,000) if a qualifying widow or widower with a dependent child and sixty-five (65) years of age or over.
2. If a husband and wife are living together and have an aggregate gross income of fifteen thousand five hundred dollars ($15,500) or over, each shall make a return unless the income of each is included in a single joint return.
3. If a taxpayer is unable to make his or her own return, the return shall be made by an authorized agent or by the guardian or other person charged with the care of the taxpayer or estate of the taxpayer.
4. As used in this section:
  1. “Dependent” means the same as defined in 26 U.S.C. § 152, as in effect on January 1, 2007;
  2. “Head of household” means the same as defined in 26 U.S.C. § 2(b), as in effect on January 1, 2005;
  3. “Jointly” means filing a joint return; and
  4. “Qualifying widow or widower with a dependent child” means the “surviving spouse” as defined in 26 U.S.C. § 2(a), as in effect on January 1, 2005.
5. If a person is not required to file a return, the person must complete and submit to his or her employer a statement to that effect on forms approved by the secretary in order to be exempt from the state withholding tax.
1. A partnership shall be classified and taxed for Arkansas income tax purposes in the same manner as it is classified and taxed for federal income tax purposes.
2. 1. Every partnership filing an Arkansas partnership return shall state specifically the items of its gross income and the deductions allowed by the Income Tax Act of 1929, § 26-51-101 et seq., and shall include in the return the names and addresses of individuals who would be entitled to share in the net income if distributed and the amount of the distributive share of each individual.
  2. The returns shall be sworn to by one (1) of the partners.
3. 1. A partnership that files an Arkansas partnership return and has income from both within and without Arkansas shall apportion income to Arkansas under the Uniform Division of Income for Tax Purposes Act, § 26-51-701 et seq.
  2. Subject to the provisions of § 26-51-202(e), all partnership income from activities within this state shall be allocated to this state by each partner as determined and reported on the Arkansas partnership return.
  3. If the apportionment of income by a partnership having income from both within and without Arkansas does not fairly represent the extent of the partnership's business activity in this state, the partnership may petition for or the Secretary of the Department of Finance and Administration may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
    1. Separate accounting;
    2. The exclusion of any one (1) or more factors;
    3. The inclusion of one (1) or more additional factors that will fairly represent the taxpayer's business activity in this state; or
    4. The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's partnership income.
1. Every fiduciary, except a receiver appointed by authority of law in possession of part only of the property of an individual, shall make return under oath for any individual trust or estate for whom he or she acts, when the returns are required by the provision of the Income Tax Act of 1929, § 26-51-101 et seq., and for every trust or estate when the beneficiary is a nonresident and shall state therein that he or she has sufficient knowledge of the affairs of the individual, trust, or estate for which return is made to enable him or her to make the return, and that the return is, to the best of his or her knowledge and belief, correct.
2. Any fiduciary required to make returns under the Income Tax Act of 1929, § 26-51-101 et seq., shall be subject to all the provisions of the Income Tax Act of 1929, § 26-51-101 et seq., which apply to individuals.
1. Every corporation subject to taxation under the Income Tax Act of 1929, § 26-51-101 et seq., shall make a return stating specifically the items of its gross income and the deductions and credits allowed by the Income Tax Act of 1929, § 26-51-101 et seq.
2. The return shall be sworn to by the president, vice-president, treasurer, or other principal officer.
3. If any foreign corporation has no office or place of business in this state but has an agent in this state, the returns shall be made by the agent.
4. In case of a receiver, trustee in bankruptcy, or assignees operating the property or business of a corporation, the receiver, trustee, or assignees shall make returns for the corporation in the same manner and form as corporations are required to make returns, and any tax due on the basis of those returns shall be collected in the same manner as if collected from the corporations of whose business or property they have custody or control.
5. Returns made under this section shall be subject to the provisions of the Income Tax Act of 1929, § 26-51-101 et seq.
1. 1. All corporations which are eligible members of an affiliated group as that term is defined in 26 U.S.C. § 1504(a) and (b) as of January 1, 1989, which affiliated group files a federal consolidated corporate income tax return pursuant to 26 U.S.C. §§ 1501 — 1505 as of January 1, 1989, may elect to file a consolidated Arkansas corporate income tax return.
  2. However, only corporations in the affiliated group that have gross income from sources within the State of Arkansas that is subject to taxation under the provisions of the Income Tax Act of 1929, § 26-51-101 et seq., shall be eligible to file consolidated corporate income tax returns in Arkansas.
2. 1. All corporations in the affiliated group which are eligible to file an Arkansas consolidated income tax return must consent to, and join in, the filing of the consolidated return prior to the last day for filing the return, as may be extended.
  2. The making of the consolidated income tax return shall be deemed as consent of each eligible corporation in the affiliated group.
3. When filing an Arkansas consolidated corporate income tax return, a complete copy of the federal consolidated corporate income tax return filed with the Internal Revenue Service for that taxable year must be attached to the Arkansas return.
4. 1. The election to file an Arkansas consolidated corporate income tax return for any income year shall require the filing of consolidated corporate income tax returns for all subsequent income years so long as the individual corporations remain members of the affiliated group unless the Secretary of the Department of Finance and Administration consents to the filing of separate returns by any members of the affiliated group.
  2. However, in the event that the General Assembly amends or supplements the Income Tax Act of 1929, § 26-51-101 et seq., in a manner which would substantially alter the method of allocating or apportioning net income or loss subject to the Income Tax Act of 1929, § 26-51-101 et seq., or in computing the tax due from the affiliated group, then the affiliated group may revoke the election to file an Arkansas consolidated corporate income tax return effective for the income year to which any such change to the Income Tax Act of 1929, § 26-51-101 et seq., is effective.
5. In any case of two (2) or more corporations, whether or not affiliated, owned, or controlled directly or indirectly by the same interests, the secretary may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such corporations if he or she determines that the distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income to any such corporation. This subsection is based upon the concept of 26 U.S.C. § 482 as of January 1, 1989, as that section applies to corporations.
6. In computing Arkansas consolidated taxable income or loss to which the tax rate is applied, the separate net income or loss of each corporation which is entitled to be included in the affiliated group shall be included in the consolidated net income or loss to the extent that its net income or loss is separately apportioned or allocated to the State of Arkansas in accordance with the provisions of the Uniform Division of Income for Tax Purposes Act, § 26-51-701 et seq.
7. This section is specifically designed to clarify the filing of consolidated corporate income tax returns with the Revenue Division of the Department of Finance and Administration and is to amend the Income Tax Act of 1929, § 26-51-101 et seq. This section is based upon the concept of filing federal consolidated income tax returns.
1. 1. Returns shall be in the form the Secretary of the Department of Finance and Administration prescribes and shall be filed with the secretary's office at Little Rock.
  2. Returns for all income taxes other than cooperative associations and exempt organizations shall be filed as follows:
    1. If covering the preceding calendar year, on or before April 15; or
    2. If covering a fiscal year, on or before the expiration of three and one-half (3½) months after the closing date of the period covered.
  3. 1. Returns for cooperative association income tax shall be filed as follows:
      1. If covering the preceding calendar year, on or before September 15; or
      2. If covering a fiscal year, on or before the expiration of eight and one-half (8½) months after the closing date of the period covered.
    2. As used in this section, “cooperative association” means a cooperative association as described in 26 U.S.C. § 1381(a) as in effect on January 1, 2003.
  4. 1. Returns for an exempt organization that is required to file an income tax return shall be filed as follows:
      1. If covering the preceding calendar year, on or before May 15; or
      2. If covering a fiscal year, on or before the expiration of four and one-half (4½) months after the closing date of the period covered.
    2. As used in this section, “exempt organization” means an organization as described in § 26-51-303.
2. 1. The secretary shall cause to be prepared blank forms for the returns and shall cause them to be furnished upon application, but failure to receive or secure the forms shall not relieve any taxpayer from the obligation of making any return required by the Income Tax Act of 1929, § 26-51-101 et seq.
  2. As far as possible and practicable for filing returns for income tax, the secretary shall use the same form of blanks as is used by the United States down to the net income part of the form.
3. 1. In filing an income tax return in the State of Arkansas, a taxpayer shall not be required to execute any affidavit or other statement under oath, but shall make the following statement, which shall be annexed to the return:
  2. The statement shall be signed by the taxpayer filing the return.
4. 1. Every corporation filing a return under the Income Tax Act of 1929, § 26-51-101 et seq., shall attach to the return a completed copy of its federal tax return for the same income year, including all schedules and attachments.
  2. As used in this subsection, “corporation” means a Subchapter C corporation as defined in 26 U.S.C. § 1361(a), in effect January 1, 1989.
1. 1. Any person who requests an automatic extension of time for filing a federal income tax return and who attaches a copy of the request to the corresponding state income tax return shall be granted an extension of time until the due date of the federal income tax return to file the corresponding state income tax return.
  2. Any person who receives an extension of time for filing a federal income tax return in addition to an automatic extension, and who attaches a copy of the document granting the federal extension to the corresponding state income tax return, shall be granted an extension of time until the due date of the federal income tax return to file the corresponding state income tax return.
2. 1. The Secretary of the Department of Finance and Administration shall assess the taxpayer interest at the rate of ten percent (10%) per annum on the amount of tax finally determined to be due.
  2. 1. 1. The interest on income tax other than corporation income tax may be computed from April 16 if the return covers the preceding calendar year.
      2. If the return covers a fiscal year, interest shall be computed from the day following the expiration of three and one-half (3½) months after the closing date of the period covered.
    2. The interest on corporation income tax shall be computed as follows:
      1. If the return covers a calendar year, from March 16; or
      2. If the return covers a fiscal year, from the day following the expiration of two and one-half (2½) months after the closing date of the period covered.
3. The secretary may grant a taxpayer's written request to extend the time for filing a corporation income tax return for a period of time not to exceed sixty (60) days in addition to the extensions provided in subsection (a) of this section that correspond to the extensions for filing a federal return.
4. The secretary may promulgate rules granting automatic extensions of time to file income tax returns and information returns without the taxpayer being required to submit a written application, a copy of the federal request for extension, or a copy of the document granting the federal extension if the secretary determines that such requirements are unnecessary for the administration of the income tax laws.
1. If the Secretary of the Department of Finance and Administration shall be of the opinion that any taxpayer has failed to file a return or failed to include in a return filed, either intentionally or through error, items of taxable income, the secretary may require from the taxpayer a return or a supplementary return, under oath, in such form as he or she shall prescribe, of all the items of income which the taxpayer received during the year for which the return is made, whether or not taxable under the provisions of the Income Tax Act of 1929, § 26-51-101 et seq.
2. If from a supplementary return or otherwise, the Secretary of the Department of Finance and Administration finds that any items of income taxable under the Income Tax Act of 1929, § 26-51-101 et seq., have been omitted from the original return, he or she may require the items so omitted to be disclosed to him or her, under oath of the taxpayer, and to be added to the original return.
3. Such supplementary return and the correction of original shall not relieve the taxpayer from any of the penalties to which he or she may be liable under any provision of the Income Tax Act of 1929, § 26-51-101 et seq.
1. The Secretary of the Department of Finance and Administration may impose a postage fee sufficient to defray the cost of postage for mailing out tax forms to tax practitioners.
2. A tax practitioner is any person, partnership, limited liability company, or corporation who compiles a tax return for hire.
1. 1. Every individual, partnership, limited liability company, corporation, joint-stock company or association, or insurance company, being a resident or having a place of business in this state; members of a partnership or employees in whatever capacity acting, including lessees or mortgagees, of real or personal property; members or managers of limited liability companies or employees in whatever capacity acting; fiduciaries; employers and all officers and employees of this state, or of any political subdivision of this state, having the control, receipt, custody, disposal, or payment of interest, rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income amounting to two thousand five hundred dollars ($2,500) or over, paid or payable during any year to any taxpayer shall make complete returns under oath to the Secretary of the Department of Finance and Administration, under such rules and in such form and manner and to such extent as may be prescribed by the secretary with the approval of the Governor.
  2. Unless the income is so reported, the secretary may disallow such payments as deductions or credits in computing the tax of the payer.
2. The returns may be required, regardless of amounts:
  1. In the case of payments of interest upon bonds, mortgages, deeds of trust, or other similar obligations of corporations; and
  2. In the case of dividends paid by corporations.
3. When necessary to make effective the provisions of this section, the name and address of the recipient of income shall be furnished upon demand of the person paying the income.
4. The provisions of this section shall not apply to the payment of interest obligations not taxable under the Income Tax Act of 1929, § 26-51-101 et seq.
1. The Secretary of the Department of Finance and Administration, whenever he or she deems it necessary to ensure compliance with the provisions of the Income Tax Act of 1929, § 26-51-101 et seq., may, under rules prescribed by him or her, require any individual, partnership, limited liability company, corporation, joint-stock company, or association, including lessees or mortgagors and employees of the state or of any political subdivision of the state having control, receipt, custody, disposal, or payment of interest, other than interest coupons payable to bearer, rent, salaries, wages, premiums, compensation, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income paid or payable to any taxpayer, to deduct and withhold the tax due from the taxpayer and make return thereof and pay the tax to the secretary.
2. 1. Upon the giving of notice by the secretary to the fiduciary of an estate or trust that the taxes due under the Income Tax Act of 1929, § 26-51-101 et seq., from the grantor or beneficiary of an estate or trust on income of the estate or trust, which is taxable to the grantor or beneficiary under the provisions of § 26-51-201, have not been paid, the fiduciary shall withhold the amount of the taxes from any payments or distribution due or to become due from the estate or trust to the grantor or beneficiary and transmit the amount so withheld to the secretary.
  2. The notice required in this section is to be served on the fiduciary or other person named above by registered mail, the letter to be directed to the last known address of the fiduciary or other person so named above, as the address appears in the records of the secretary.
  3. Any person failing or refusing to deduct and withhold the tax due from any taxpayer as required by the secretary pursuant to this section shall be personally liable for such tax, and the secretary may proceed against him or her as provided for in § 27 [repealed] of the Income Tax Act of 1929, § 26-51-101 et seq.
3. The provisions of this section shall not apply to the payment of interest obligations not taxable under the Income Tax Act of 1929, § 26-51-101 et seq.
1. It shall be unlawful for the Department of Finance and Administration or any other public official or employee to divulge or otherwise make known in any manner any particulars set forth or disclosed in any report or return required by the Income Tax Act of 1929, § 26-51-101 et seq., or any information concerning the taxpayer's affairs acquired from the taxpayer's records, officers, or employees while examining or auditing any taxpayer's liability for taxes imposed under the Income Tax Act of 1929, § 26-51-101 et seq., except:
  1. In connection with a proceeding involving taxes due under the Income Tax Act of 1929, § 26-51-101 et seq., from the taxpayer making the return; and
  2. In the manner and for the purposes prescribed in this section, the Arkansas Tax Procedure Act, § 26-18-101 et seq., and §§ 26-5-107, 26-5-108, 26-51-910, 26-52-105, 26-52-302, 26-52-303, 26-52-509, and 26-59-111.
2. The Secretary of the Department of Finance and Administration may furnish a copy of any taxpayer's return to any official of the United States or of any state having duties to perform in respect to the assessment or collection of any tax imposed upon or measured by income if the taxpayer is required by the laws of the United States or of the state to make a return in the United States or that state and if the laws of the United States or of the state provide substantially for the same secrecy in respect to the information revealed by the taxpayer's return as is provided by Arkansas laws.
3. The secretary and all other public officials and employees shall keep and maintain the same secrecy in respect to any information furnished by any department, commission, or official of the United States or of any other state in respect to the income of any person as is required by the Income Tax Act of 1929, § 26-51-101 et seq., in respect to information concerning the affairs of the taxpayer under the Income Tax Act of 1929, § 26-51-101 et seq.
4. Nothing in this section shall be construed to prohibit the Department of Finance and Administration from publishing statistics so classified as not to disclose the identity of a particular return or report and the items of the return or report, or the inspection by the Attorney General or other legal representatives of this state of the return or report of any taxpayer who shall bring action to set aside or review the tax paid on the return or report or against whom an action or proceeding is necessary to recover any tax or any penalty imposed by the Income Tax Act of 1929, § 26-51-101 et seq.
5. 1. Nothing in this section shall be construed to prohibit the Department of Finance and Administration from disclosing from any return or other record maintained by the secretary to the Office of Child Support Enforcement the last known address or whereabouts or the last known employer of any deserting parent from whom the office is charged with collecting child support.
  2. In providing this information, the Department of Finance and Administration shall not allow the office to examine the tax return, except that the Department of Finance and Administration shall disclose the taxpayer's tax return, personal and business, when compelled by an order of any Arkansas circuit court or the Supreme Court in any case or controversy before that court.
6. 1. Nothing in this section shall be construed to prohibit the Department of Finance and Administration from disclosing from any return or other record maintained by the secretary to the Student Loan Guarantee Foundation of Arkansas, the last known address or whereabouts or the last known employer of any person from whom the Student Loan Guarantee Foundation of Arkansas is charged with collecting a student loan indebtedness.
  2. In providing this information the Department of Finance and Administration shall not allow the Student Loan Guarantee Foundation of Arkansas to examine the tax return.
7. 1. Nothing in this section shall be construed to prohibit the Department of Finance and Administration from disclosing from any return or other record maintained by the secretary to the Division of Higher Education or any Arkansas public institution of higher education the last known address or whereabouts or the last known employer of any person from whom these institutions are charged with collecting student indebtedness.
  2. In providing this information, the Department of Finance and Administration shall not allow the Division of Higher Education or the Arkansas public institutions of higher education to examine the tax return.
1. 1. 1. To the extent they apply to capital gains and losses realized or incurred during income years beginning after December 31, 1996, 26 U.S.C. §§ 1211 — 1231, 1232 [repealed], 1232A [repealed], 1232B [repealed], 1233 — 1237, 1239, 1240 [repealed], 1241 — 1245, 1246 [repealed], 1247 [repealed], 1248 — 1250, 1251 [repealed], and 1252 — 1257, as in effect on January 1, 2011, and the regulations of the United States Secretary of the Treasury promulgated under 26 U.S.C. §§ 1211 — 1231, 1232 [repealed], 1232A [repealed], 1232B [repealed], 1233 — 1237, 1239, 1240 [repealed], 1241 — 1245, 1246 [repealed], 1247 [repealed], 1248 — 1250, 1251 [repealed], and 1252 — 1257, as in effect on January 1, 2011, are adopted for the purpose of computing tax liability under the Income Tax Act of 1929, § 26-51-101 et seq.
    2. However, the provisions of this section shall not apply to a C corporation as defined in 26 U.S.C. § 1361, as in effect on January 1, 2011.
  2. Furthermore, any other provisions of the federal income tax law and regulations necessary for interpreting and implementing 26 U.S.C. §§ 1211 — 1231, 1232 [repealed], 1232A [repealed], 1232B [repealed], 1233 — 1237, 1239, 1240 [repealed], 1241 — 1245, 1246 [repealed], 1247 [repealed], 1248 — 1250, 1251 [repealed], and 1252 — 1257 are adopted to that extent and as in effect on January 1, 2007.
2. 1. Except as otherwise provided in this subsection, if a taxpayer has a net capital gain for tax years beginning on and after January 1, 1999, thirty percent (30%) of the gain is exempt from state income tax.
  2. If a taxpayer has a net capital gain, the following portion of the gain is exempt from state income tax:
    1. From January 1, 2015, through January 31, 2015, fifty percent (50%);
    2. Beginning February 1, 2015, forty-five percent (45%); and
    3. Beginning on and after July 1, 2016, fifty percent (50%).
  3. The amount of net capital gain in excess of ten million dollars ($10,000,000) from a gain realized on or after January 1, 2014, is exempt from the state income tax.
3. Title 26 U.S.C. § 1202, as in effect on January 1, 2017, regarding the exclusion from gain of certain small business stock, is adopted for the purpose of computing Arkansas income tax liability.
4. 1. If a taxpayer has a net capital gain from a venture capital investment, one hundred percent (100%) of the gain shall be exempt from the Income Tax Act of 1929, § 26-51-101 et seq., if:
    1. The venture capital investment was initially made on or after January 1, 2001; and
    2. The venture capital investment was held for at least five (5) years prior to disposition.
  2. 1. “Venture capital” means equity financing, broadly defined, including early stage research, development, commercialization, seed capital for startup enterprises, and other risk capital for expansion of entrepreneurial enterprises doing business in Arkansas that are:
      1. Qualified technology-based enterprises doing business in Arkansas;
      2. Qualified biotechnology enterprises doing business in Arkansas; or
      3. Qualified technology incubator clients doing business in Arkansas.
    2. “Venture capital” does not include the purchase of a share of stock in a company if, on the date on which the share of stock is purchased, the company has securities outstanding that are:
      1. Registered on a national securities exchange under § 12(b) of Title I of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, as it existed on January 1, 2001;
      2. Registered or required to be registered under § 12(g) of Title I of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, as it existed on January 1, 2001; or
      3. Required to be registered except for the exemptions in § 12(g)(2) of Title I of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, as it existed on January 1, 2001.
    3. “Qualified biotechnology enterprise” means a corporation, partnership, limited liability company, sole proprietorship, or other entity that is certified by the Arkansas Economic Development Commission pursuant to § 2-8-108 [repealed].
    4. “Qualified technology incubator” means a business incubator certified by the Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission as being a facility operated in cooperation with an Arkansas college or university to foster the growth of technology-based enterprises.
    5. “Qualified technology incubator client” means a corporation, partnership, limited liability company, sole proprietorship, or other entity that, as of the date of the venture capital investment, is certified by an Arkansas college or university as currently receiving, or having received within the previous three (3) years, the services of a qualified technology incubator.
    6. “Qualified technology-based enterprise” means a corporation, partnership, limited liability company, sole proprietorship, or other legal entity whose primary business directly involves commercializing the results of research in fields having long-term economic or commercial value to the state and having been identified in the research and development plan approved by the board.
1. The Secretary of the Department of Finance and Administration may require the originator, transmitter, or paid preparer of an electronically filed Arkansas income tax return to retain the signature document, form AR8453, as well as all other forms and schedules which support the return.
2. Supporting forms and schedules which should be attached to the signature document include, but are not limited to, the following:
  1. Form W-2;
  2. Form 1099;
  3. Form AR1000EC;
  4. Form AR1000DC;
  5. Form AR1000RC5; and
  6. Any other documents or schedules that require the taxpayer's signature.
3. The signature document and all supporting documents for an electronically filed Arkansas return must be made available for inspection by the secretary upon the secretary's request.
4. The secretary may promulgate rules for the proper enforcement of this section.
1. 1. Every employer making payments of wages to employees shall deduct and withhold from the employees' wages an amount determined from withholding tables promulgated by the Secretary of the Department of Finance and Administration and furnished to the employer.
  2. The full amount deducted and withheld from any employee's wages during the income year shall be credited against the tax liability of the employee under the Income Tax Act of 1929, § 26-51-101 et seq., for that year.
2. 1. Notwithstanding the provisions of subsection (a) of this section, every employer who withholds less than one thousand dollars ($1,000) for a full year's withholding shall report and remit annually on a date specified by the secretary any amounts so withheld by the employer.
  2. An employer shall be advised by the secretary of the employer's classification and shall report as classified until such time as the employer advises the secretary in writing that the employer no longer has employees or the employer is closing the business.
  3. However, it shall be the duty of the employer to report to the secretary at the end of each income year all wages paid to any such employees on the same forms provided in this subchapter for making employer annual withholding statements in order that the secretary may determine the tax liability, if any, of those employees during that income year.
1. 1. Every employer required to deduct and withhold from wages under this subchapter shall file a withholding return on an annual basis as prescribed by the Secretary of the Department of Finance and Administration and annually pay over to the secretary the full amount required to be deducted and withheld from the wages of the employees if the amount is less than one thousand dollars ($1,000) per year.
  2. Every employer required to deduct and withhold from wages under this subchapter shall file a withholding return on a monthly basis as prescribed by the secretary and pay over on a monthly basis to the secretary the full amount required to be deducted and withheld from the wages of the employees if the amount is one thousand dollars ($1,000) or more per year.
  3. However, the secretary may provide by rule that every such employer shall on or before the fifteenth day of each month pay over to the secretary or a depository designated by the secretary the amount required to be deducted and withheld by the employer for the preceding month if the amount is one hundred dollars ($100) or more.
2. 1. Notwithstanding any other provision of this section, all transient employers shall make return and pay over to the secretary, on a monthly basis, the full amounts required to be deducted and withheld from the wages by the transient employer for the calendar month.
  2. The returns and payments to the secretary by transient employers shall be made on or before the last day of the month following the month for which the amounts were deducted and withheld from the wages of the transient employer's employees.
3. 1. Notwithstanding any other provision of this section, all employers engaged in any business which is seasonal shall make return and pay over to the secretary on a monthly basis the amounts required to be deducted and withheld from the wages by the employer for the calendar month.
  2. Returns and payments to the secretary by employers engaged in seasonal business shall be made on or before the last day of the month following the month for which those amounts were deducted and withheld from the wages of the employer's employees.
4. When the secretary has justifiable reason to believe that the collection of funds required to be withheld by any employer as provided in this subchapter is in jeopardy, the secretary may require the employer to file a return and pay the amounts required to be withheld at any time.
5. Every employer who fails to withhold or pay to the secretary any sums required by this subchapter to be withheld and paid shall be personally and individually liable for the sums except as provided in § 26-51-916.
6. Any sum withheld in accordance with the provisions of this subchapter shall be deemed to be held in trust for the State of Arkansas and shall be recorded by the employer in a ledger account so as to clearly indicate the amount of tax withheld and that the amount is the property of the State of Arkansas.
7. 1. When an employer has become liable to an annual return of withholding, the employer must continue to file an annual report, even though no tax has been withheld, until such time as the employer notifies the secretary, in writing, that the employer no longer has employees or that the employer is no longer liable for an annual return.
  2. When an employer has become liable to a monthly return of withholding, the employer must continue to file a monthly report, even though no tax has been withheld until such time as the employer notifies the secretary, in writing, that the employer no longer has employees or that the employer is no longer liable for monthly returns.
8. 1. For any withholding tax reporting period, a company or any other business enterprise which provides the service of reporting and remitting withholding tax on the wages paid to Arkansas employees by other employers shall remit all such withholding taxes to the secretary by electronic funds transfer, as more particularly described in § 26-19-105.
  2. However, a company or business which provides tax reporting and remitting services shall not be required to remit withholding taxes by electronic funds transfer if the company or business provides those services for fewer than one hundred (100) Arkansas employers.
  3. As used in this subsection, “Arkansas employer” means any employer required by Arkansas law to withhold, report, and remit Arkansas income tax on the wages, salary, or other compensation paid to its employees within this state.
1. Every employer shall file an annual statement of withholding for each employee.
2. 1. The annual statement of withholding shall be in the form prescribed by the Secretary of the Department of Finance and Administration.
  2. 1. The statement from the employer shall be filed with the secretary on or before January 31 following the close of the income year.
    2. For tax years beginning on or after January 1, 2006, an employer who has two hundred fifty (250) or more employees during the employer's income year shall file the statement either:
      1. Electronically;
      2. On magnetic media; or
      3. In any other machine-readable form approved by the secretary.
  3. 1. The employer shall provide two (2) copies of the statement to the employee on or before January 31 following the close of the income year.
    2. However, if the employment of the employee is terminated during the calendar year, the employer shall furnish the statement to the employee at the time of the termination of employment.
3. The statement shall show:
  1. The name and withholding account number of the employer;
  2. The name of the employee and his or her Social Security account number;
  3. The total compensation paid the employee;
  4. The total amount withheld by the employer pursuant to this subchapter for the year or part of a calendar year when the employee worked for less than a full calendar year; and
  5. Such other information as the secretary shall require by rule.
4. An annual withholding statement shall not be required for wages less than six hundred dollars ($600) for services rendered as agricultural labor.
1. Every taxpayer subject to the tax levied by the Income Tax Act of 1929, § 26-51-101 et seq., shall make and file with the Secretary of the Department of Finance and Administration a declaration of the estimated tax for the income year if the taxpayer can reasonably expect the estimated tax to be more than one thousand dollars ($1,000).
2. The declaration of estimated tax shall be made on such forms and shall include such information as the secretary shall prescribe.
3. 1. The declaration shall be filed with the secretary on or before the fifteenth day of the fourth month of the income year of the taxpayer.
  2. However, taxpayers whose income from farming for the income year can reasonably be expected to amount to at least two-thirds (2/3) of the total gross income from all sources for the income year may file the declaration and pay the estimated tax on or before the fifteenth day of the second month after the close of the income year, or in lieu of filing any declaration, may file an income tax return and pay the tax on or before the fifteenth day of the third month after the close of the income year.
4. A taxpayer who, due to a change of circumstances, first meets the requirements for filing a declaration after the fifteenth day of the fourth month of the income year shall make and file the declaration on or before the next regular quarterly tax payment date.
5. 1. A single declaration may be filed jointly by a husband and wife having the same income year.
  2. If a joint declaration is filed by a husband and wife and they do not file a joint return for the income year, the estimated tax paid under the joint declaration may be treated as the estimated tax of either the husband or wife or may be divided between them.
6. A taxpayer may file amendments to a declaration at such times, under such rules, and in such form as the secretary shall prescribe.
1. The estimated tax as shown on the declaration filed with the Secretary of the Department of Finance and Administration shall be paid as follows:
  1. If the estimated tax is not more than one thousand dollars ($1,000), payment may be made at the time the declaration is filed or at the time the return for the income year is filed;
  2. If the estimated tax is in excess of one thousand dollars ($1,000), it may be paid in full at the time of filing the declaration of estimated tax, or, at the election of the taxpayer, it may be paid in four (4) equal installments to be due as follows:
    1. The first installment is due at the time prescribed for filing the declaration;
    2. The second installment is due on or before the fifteenth day of the sixth month of the income year;
    3. The third installment is due on or before the fifteenth day of the ninth month of the income year; and
    4. For:
      1. Individual income tax, the fourth installment is due on or before the fifteenth day of the first month after the close of the income year; or
      2. Corporation income tax, the fourth installment is due on or before the fifteenth day of the last month of the income year;
  3. In the case of a taxpayer who files an amendment to the declaration, the quarterly tax payments coming due after the amendment shall be adjusted either up or down to conform to the amended declaration of estimated tax; and
  4. 1. In the case of a taxpayer who first meets the requirements and files a declaration subsequent to the fifteenth day of the fourth month of the income year and not later than the fifteenth day of the ninth month of the income year, if the estimated tax is in excess of one thousand dollars ($1,000), the taxpayer may pay the estimated tax in equal installments with the first installment being due at the time of filing the declaration and an installment being due on each subsequent regular quarterly tax payment date for the income year as prescribed in subdivision (a)(2) of this section.
    2. If the declaration is filed subsequent to the fifteenth day of the ninth month of the income year and on or before the fifteenth day of the first month after the close of the income year, the estimated tax shall be paid in full at the time of filing the declaration.
2. Any tax payment due under the provisions of this subchapter may be paid by the taxpayer in advance of the date prescribed in the section for the payment of the tax.
1. Every employee whose wages are subject to the withholding provisions of this subchapter shall furnish his or her employer with a certificate showing the number of dependents claimed by the employee for purposes of withholding.
2. If any employee fails or refuses to furnish his or her employer with the certificate, the employer shall withhold from the wages of the employee as if the employee claimed no credit or exemption either for himself or herself or for any dependents.
3. The furnishing of information in the form required for federal income tax purposes shall be sufficient for the purposes of this section.
1. All payments received by the Secretary of the Department of Finance and Administration from employers for taxes withheld from employees and all payments received by the secretary from taxpayers as herein provided shall be deposited into the State Treasury as general revenues to the credit of the State Apportionment Fund.
2. Based upon information provided by the secretary, the Chief Fiscal Officer of the State shall determine the amount estimated to be necessary to meet any refunds of state income taxes under the provisions of this subchapter, and, upon certification of the Chief Fiscal Officer of the State, the Treasurer of State shall transfer from any general revenues in the General Revenue Allotment Reserve Fund the amount so certified to the Individual Income Tax Withholding Fund, from which the secretary is authorized to make refunds as provided for by law and by this subchapter.
3. All refund warrants drawn against the Individual Income Tax Withholding Fund which are not presented for payment within one (1) year of issuance shall be void.
4. Neither the secretary nor any member or employee of the Revenue Division of the Department of Finance and Administration shall be held personally liable for making any refund by reason of a fraudulent withholding certificate being used as a basis for the refund.
1. 1. Title 26 U.S.C. § 3405, as in effect on January 1, 2005, regarding withholding from deferred income, is adopted as modified by subdivision (a)(2) of this section.
  2. For the purposes of Arkansas withholding tax under this section:
    1. The amount of withholding required under 26 U.S.C § 3405(b)(1) shall be three percent (3%); and
    2. The amount of withholding required under 26 U.S.C. § 3405(c)(1)(B) shall be five percent (5%).
2. This section shall apply only when the payee is an Arkansas resident.
1. As used in this section:
  1. “Lower-tier pass-through entity” means a member of a pass-through entity that is itself a pass-through entity;
  2. “Member” means a shareholder of a Subchapter S corporation, a partner in a general partnership, a partner in a limited partnership, a partner in a limited liability partnership, a member of a limited liability company, or a beneficiary of a trust;
  3. “Nonresident” means:
    1. An individual who is not a resident of or domiciled in Arkansas during any part of the tax year;
    2. A business entity that does not have its commercial domicile in Arkansas during any part of the tax year; or
    3. A trust not organized in Arkansas; and
  4. “Pass-through entity” means a business entity that for the applicable tax year is:
    1. A corporation treated as a Subchapter S corporation under § 26-51-409, a general partnership, limited partnership, limited liability partnership, limited liability company, or a trust; and
    2. Not taxed as a corporation for federal or Arkansas income tax purposes.
2. 1. 1. 1. A pass-through entity shall withhold Arkansas income tax at the highest income tax rate levied under §§ 26-51-201, 26-51-202, and 26-51-205 on the share of income of the pass-through entity that is derived from or attributable to sources within this state and distributed to each nonresident member.
      2. The pass-through entity is liable to the Secretary of the Department of Finance and Administration for the payment of the tax required to be withheld and is not liable to the member for the amount withheld and paid to the secretary.
    2. 1. A lower-tier pass-through entity shall withhold and pay income tax on the share of income distributed by the lower-tier pass-through entity to each of its nonresident members.
      2. The secretary shall apply the tax withheld and paid by a pass-through entity on distributions to a lower-tier pass-through entity to the withholding required of that lower-tier pass-through entity.
  2. 1. On or before the due date for the pass-through entity's composite income tax return described in subsection (d) of this section, a pass-through entity shall file an annual return with the secretary showing the total amount of income distributed or credited to its nonresident members and the amount of tax withheld and shall remit the amount of tax withheld.
    2. The annual return shall be in an electronic format prescribed by the secretary.
  3. A pass-through entity shall annually furnish a nonresident member of the pass-through entity with a record of the amount of tax withheld on behalf of the nonresident member no later than the fifteenth day of the fourth month following the end of the pass-through entity's tax year.
3. A pass-through entity is not required to withhold tax for a nonresident member if:
  1. The nonresident member has a pro rata or distributive share of income of the pass-through entity from doing business in or deriving income from sources within this state of less than one thousand dollars ($1,000) per year;
  2. The secretary has determined that the nonresident member's income is not subject to withholding;
  3. The nonresident member elects to have the tax due paid as part of a composite return filed by the pass-through entity under subsection (d) of this section;
  4. The pass-through entity:
    1. Is a publicly traded partnership as defined by 26 U.S.C. § 7704(b), as in effect on January 1, 2005, that is treated as a partnership for the purposes of federal income taxation; and
    2. Has agreed to file an annual information return reporting the name, address, and taxpayer identification number of each member with an annual Arkansas income greater than five hundred dollars ($500) along with any other information requested by the secretary;
  5. 1. The pass-through entity has filed with the secretary on forms prescribed by the secretary the nonresident member's signed agreement to timely file an Arkansas corporation, nonresident individual, or trust income tax return, to pay any tax due on the return, and to be subject to the jurisdiction of the Department of Finance and Administration in the courts of this state for the purpose of determining and collecting any Arkansas income tax together with interest and penalties owed by the nonresident member.
    2. 1. The department may revoke the exception from the withholding requirement in subdivision (c)(5)(A) of this section if it is determined that the nonresident member is not abiding by the terms of the agreement.
      2. At the time of revocation, the department shall notify the pass-through entity that withholding is required for future distributions to the nonresident member whose exception is revoked; or
  6. The income received by the nonresident member is exempt from Arkansas income tax pursuant to § 26-51-202(e).
4. 1. A pass-through entity may file a composite income tax return on behalf of electing nonresident members reporting and paying Arkansas income tax at the highest income tax rate under §§ 26-51-201, 26-51-202, and 26-51-205 on the nonresident member's pro rata or distributive shares of income of the pass-through entity from doing business in or deriving income from sources within this state.
  2. A nonresident member whose only source of income within this state is from one (1) or more pass-through entities may elect to be included in a composite return filed pursuant to this section.
  3. A nonresident member who has been included in a composite return may file an income tax return and shall receive credit for income tax paid on the nonresident member's behalf by the pass-through entity.
  4. On or before the fifteenth day of the fourth month following the end of the pass-through entity's tax year, a pass-through entity shall file an annual composite return with the secretary showing the total amount of income distributed or credited to its nonresident members and the amount of tax withheld and shall remit the tax due on the composite income tax return.
5. The secretary may promulgate rules necessary to administer this section.
1. The State of Arkansas is blessed with abundant rainfall and other surface and underground water resources which, when managed conjunctively, can provide a continuous high quality water supply to meet the foreseeable needs of the entire state.
2. Existing water use patterns are depleting groundwater supplies at an unacceptable rate, and alternative surface water supplies are not available in sufficient quantities to alleviate this groundwater depletion problem.
3. The tax incentives provided in this subchapter will encourage the water users to invest in:
  1. The construction of impoundments to utilize available surface water and reduce our dependence on groundwater;
  2. The conversion from groundwater use to surface water use when surface water is available; and
  3. The water conservation practice of land leveling to reduce agricultural irrigation water use.
4. It is of utmost importance to Arkansas that, within critical groundwater areas, surface water be used when available.
1. The tax credits provided by this subchapter shall apply to taxable years beginning on or after January 1, 1996, and all taxable years thereafter.
2. Any approved applicant claiming a tax credit under this subchapter may not claim a credit under any similar act for any costs related to the same project.
3. Any tax credit issued to an approved applicant that is a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary shall be passed through to the partners, members, or owners, respectively, on a pro rata basis or pursuant to an executed agreement between or among the partners, members, or owners documenting an alternative method for the distribution of the tax credit.
1. There shall be allowed a credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., to an approved applicant that constructs and installs or restores water impoundments or water control structures of twenty (20) acre-feet or more designed for the purpose of storing water to be used primarily for agricultural, commercial, or industrial purposes.
2. 1. The tax credit allowed to each approved applicant shall not exceed the lesser of fifty percent (50%) of the project cost incurred or ninety thousand dollars ($90,000).
  2. 1. The amount of tax credit allowed to each approved applicant per project that may be used for a taxable year shall not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Nine thousand dollars ($9,000).
    2. If the approved applicant is a pass-through entity such as a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary, the amount of tax credit that may be used for a taxable year shall not exceed the lesser of:
      1. The aggregate amount of individual or corporate income tax otherwise due by all members of the pass-through entity; or
      2. Nine thousand dollars ($9,000).
  3. Any unused credit may be carried over for a maximum of fifteen (15) consecutive taxable years following the taxable year in which the credit originated.
1. For projects located outside critical groundwater areas, there shall be allowed a credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., to an approved applicant for the reduction of groundwater use by substitution of surface water for water used for industrial, commercial, agricultural, or recreational purposes.
2. 1. The tax credit allowed to each approved applicant shall not exceed the lesser of ten percent (10%) of the project cost incurred or twenty seven thousand dollars ($27,000).
  2. 1. The amount of tax credit allowed to each approved applicant per project that may be used for a taxable year may not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Nine thousand dollars ($9,000).
    2. If the approved applicant is a pass-through entity such as a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary, the amount of tax credit that may be used for a taxable year shall not exceed the lesser of:
      1. The aggregate amount of individual or corporate income tax otherwise due by all members of the pass-through entity; or
      2. Nine thousand dollars ($9,000).
  3. Any unused tax credit may be carried over for a maximum of two (2) consecutive taxable years following the taxable year in which the credit originated.
1. For projects located within critical groundwater areas, there shall be allowed a credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., to an approved applicant for the reduction of groundwater use by substitution of surface water for water used for industrial, commercial, agricultural, or recreational purposes.
2. 1. For agricultural or recreational projects, there shall be allowed a tax credit to each approved applicant not to exceed the lesser of fifty percent (50%) of the project cost incurred or twenty seven thousand dollars ($27,000).
  2. 1. The amount of tax credit allowed to each approved applicant per project that may be used for a taxable year may not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Nine thousand dollars ($9,000).
    2. If the approved applicant is a pass-through entity such as a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary, the amount of tax credit that may be used for a taxable year shall not exceed the lesser of:
      1. The aggregate amount of individual or corporate income tax otherwise due by all members of the pass-through entity; or
      2. Nine thousand dollars ($9,000).
  3. Any unused tax credit may be carried over for a maximum of two (2) consecutive taxable years following the taxable year in which the credit originated.
3. 1. For industrial or commercial projects, there shall be allowed a tax credit to each approved applicant not to exceed the lesser of fifty percent (50%) of the project cost incurred or one million dollars ($1,000,000).
  2. 1. The amount of tax credit allowed to each approved applicant per project that may be used for a taxable year may not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Two hundred thousand dollars ($200,000).
    2. If the approved applicant is a pass-through entity such as a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary, the amount of tax credit that may be used for a taxable year shall not exceed the lesser of:
      1. The aggregate amount of individual or corporate income tax otherwise due by all members of the pass-through entity; or
      2. Nine thousand dollars ($9,000).
  3. Any unused tax credit may be carried over for a maximum of four (4) consecutive taxable years following the taxable year in which the credit originated.
1. There shall be allowed a credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., to an approved applicant for agricultural land leveling to conserve irrigation water.
2. 1. The tax credit allowed to each approved applicant shall not exceed the lesser of ten percent (10%) of the project cost incurred or twenty seven thousand dollars ($27,000).
  2. 1. The amount of tax credit allowed to each approved applicant per project that may be used for a taxable year may not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Nine thousand dollars ($9,000).
    2. If the approved applicant is a pass-through entity such as a partnership, a limited liability company taxed as a partnership, a Subchapter S corporation, or a fiduciary, the amount of tax credit that may be used for a taxable year shall not exceed the lesser of:
      1. The aggregate amount of individual or corporate income tax otherwise due by all members of the pass-through entity; or
      2. Nine thousand dollars ($9,000).
  3. Any unused tax credit may be carried over for a maximum of two (2) consecutive taxable years following the taxable year in which the credit originated.
1. 1. The Arkansas Natural Resources Commission shall promulgate such rules as may be deemed necessary in administering projects submitted with the intent of qualifying for the tax incentives provided for in this subchapter.
  2. The rules shall not be adopted without the approval of the Department of Finance and Administration.
2. 1. The commission may charge a reasonable application fee for the processing of tax credit applications.
  2. All fees collected shall be deposited into the Arkansas Water Development Fund.
3. 1. The commission may issue a tax credit approval certificate for those applications proposing projects that meet the requirements of this subchapter and rules promulgated under this subchapter.
  2. An approved applicant must file the certificate of tax credit approval with the approved applicant's income tax return for the first year in which the approved applicant claims a tax credit under this subchapter.
4. 1. Upon completion of the project, the approved applicant shall apply to the commission for a certificate of completion.
  2. The commission shall issue a tax credit certificate of completion to any approved applicant meeting the requirements of this subchapter and the rules promulgated by the department.
  3. After receiving a certificate of completion, the approved applicant shall file the certificate of completion with the first tax return filed after issuance of the certificate of completion.
5. The department shall promulgate such rules as may be deemed necessary to carry out the tax credit provisions of this subchapter.
1. Project activities shall meet or exceed those standards as established by the Arkansas Natural Resources Commission, and the project must be maintained for a minimum life of ten (10) years after issuance of a certificate of completion.
2. Project costs incurred after issuance of a tax credit approval certificate may be claimed for tax credit, subject to other limitations contained in this subchapter.
3. 1. All projects must be completed within three (3) years of the date of the certificate of tax credit approval.
  2. If the approved applicant does not complete the project within the period provided in subdivision (c)(1) of this section, all tax credits claimed shall be repaid to the Department of Finance and Administration, and the project will be disallowed as a project for tax credit purposes.
4. 1. If the approved applicant terminates the project prior to expiration of the minimum project life, the approved applicant shall provide written notification to the commission and the department. In addition, the approved applicant shall file an amended tax return and repay the amount of tax credit claimed that was not allowable.
  2. If the commission determines that the approved applicant has terminated the project, it shall notify the department.
5. 1. Upon the termination of a project, the approved applicant shall not be allowed any further tax credits provided in this subchapter, and the department shall recapture the pro rata share of any tax credits claimed under this subchapter for the period of termination.
  2. The pro rata share for recapture of the disallowed tax credits shall be determined by dividing the period of time from termination of the project until the expiration of the minimum life of the project by the required minimum life of the project times the tax credit claimed.
6. Notwithstanding the provisions of § 26-18-306, the department may make necessary assessments to recapture disallowed tax credits for a period of three (3) years from the date of expiration of the minimum life of the project.
7. For purposes of this subchapter, the recordkeeping provisions of § 26-18-506 requiring an approved applicant to maintain records for six (6) years after a return is filed shall be extended to require the approved applicant claiming a credit under this subchapter to maintain the required records for the required minimum life of the project plus three (3) years.
1. In determining net income for Arkansas income tax purposes, any approved applicant qualifying for the tax credits provided in this subchapter is also entitled to a deduction in an amount equal to the project cost less the total amount of tax credits to which the approved applicant is entitled under this subchapter.
2. The deduction provided for in this subchapter shall be taken only during the year in which the expenditures for the project were actually incurred.
1. The Department of Finance and Administration shall compile the total amount of tax credits used pursuant to the provisions of this subchapter for each calendar year.
2. 1. When the total amount of tax credits used pursuant to the provisions of this subchapter exceeds ten million dollars ($10,000,000) in any calendar year, the tax credits established by this subchapter shall expire on December 31 of the calendar year following the calendar year in which the tax credits used pursuant to the provisions of this subchapter exceeded ten million dollars ($10,000,000).
  2. However, any approved applicant issued a certificate of tax credit approval on or prior to December 31 may complete the project and shall be entitled to the tax credits provided under this subchapter without regard to the fact that the availability of the tax credits has otherwise expired.
1. The income tax credits allowed under this subchapter may be transferred.
2. A transferee from an original approved applicant under this subchapter is entitled to an income tax credit under this subchapter only to the extent the income tax credit is still available to and has not previously been used by the transferor.
3. A transferee of income tax credits under this subchapter that seeks to qualify for the income tax credits provided in this subchapter shall obtain and attach to the transferee's income tax return for the years the income tax credit is claimed a certified statement from the transferor stating the:
  1. Name and address of the original purchaser and all transferees;
  2. Tax identification number of all persons entitled to any portion of the original income tax credit;
  3. Original date the income tax credit was approved;
  4. Amount of the income tax credit associated with the transfer of the income tax credit;
  5. Original amount of the income tax credit; and
  6. Remaining amount of the income tax credit that is available for use by the transferee.
4. A transferee under this section is subject to the carry-over provisions provided in this subchapter based on the taxable year in which the income tax credit originated.
5. 1. If a project is not completed or maintained for the total number of years required under § 26-51-1011, the transferor that originally received the income tax credit under this subchapter is responsible for refunding the income tax credit to the Department of Finance and Administration as provided in § 26-51-1011.
  2. The transferee of an income tax credit under this subchapter is not liable for the repayment of the income tax credit allowed under this subchapter if the transferor that originally received the income tax credit fails to complete or maintain the project under § 26-51-1011.
6. An owner or holder that assigns part or all of an income tax credit under this section shall perfect the transfer by notifying the department in writing within thirty (30) calendar days following the effective date of the transfer and shall provide any information as may be required by the department to administer and carry out this subchapter and to ensure proper tracking of the ownership of the unused income tax credit.
1. 1. There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax for the following types of donations or sales, or both, of new machinery and equipment to a qualified educational institution in connection with a qualified education program or a qualified research program:
    1. Donations of new machinery and equipment;
    2. Sales below cost of machinery and equipment; and
    3. Cash donations for the purchase of new machinery and equipment by a qualified educational institution.
  2. The amount of the credit granted by this section shall be:
    1. In the case of a donation, thirty-three percent (33%) of the cost of the machinery and equipment donated;
    2. In the case of a sale below cost, thirty-three percent (33%) of the amount by which the cost is reduced; and
    3. In the case of a cash donation, thirty-three percent (33%) of the amount of the cash donation used by the qualified educational institution to purchase new machinery and equipment from a wholesale, retail, or manufacturing business.
2. There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax equal to thirty-three percent (33%) of the qualified research expenditures of a taxpayer in qualified research programs.
3. 1. There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax equal to thirty-three percent (33%) of a donation made to an accredited institution of higher education to support a research park authority.
  2. In order to claim this credit authorized by subdivision (c)(1) of this section, a donation made in support of a research park authority shall:
    1. Be consistent with the research and development plan approved by the Director of the Arkansas Economic Development Commission with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission, as evidenced by a letter of support from the director; and
    2. Support either directly or indirectly research subject to being funded by one (1) or more federal agencies, as enumerated in § 15-3-205(1).
1. Total credits for qualified research expenditures, donations, and sales under this subchapter shall be allowed up to one hundred percent (100%) of the net tax liability of the taxpayer after all other credits and reductions in tax have been calculated.
2. The credit shall be claimed in the tax year of the qualified research expenditure, donation, or sale. However, all or part of any unused credit may be carried over to and claimed in succeeding tax years until the credits are exhausted or until the end of the nine (9) tax years succeeding the tax year of the qualified research expenditure, donation, or sale, whichever occurs earlier. In no event shall a taxpayer claim a credit under this subchapter for any tax year in excess of one hundred percent (100%) of the net tax due after all other credits and reductions in tax have been calculated.
3. Any person claiming any credit granted by this subchapter for any expense or contribution shall not take any deduction under the Arkansas income tax law for the same expense or contribution.
1. To claim the credit granted by § 26-51-1102, the taxpayer shall provide the following for each piece of machinery and equipment donated, sold below cost, or purchased by a qualified educational institution with a cash donation:
  1. An affidavit from the receiving qualified educational institution that:
    1. The qualified educational institution has received the machinery and equipment;
    2. The machinery and equipment is new machinery and equipment within the meaning of this subchapter;
    3. The qualified educational institution received the machinery and equipment as a donation or, if the qualified educational institution purchased the machinery and equipment, a statement of the amount paid for the machinery and equipment; and
    4. The machinery and equipment has been donated, purchased by the qualified educational institution with a cash donation provided by a taxpayer, or sold to the qualified educational institution for use in a qualified education program or a qualified research program; and
  2. 1. In the case of a donation or sale by a retail or wholesale business, a copy of the invoice from the business' supplier showing the actual cost of the machinery and equipment.
    2. In the case of a donation or sale below cost by a manufacturer, a copy of the manufacturer's wholesale price list showing the lowest price of the machinery and equipment for which credit is claimed.
    3. In the case of a purchase by a qualified educational institution with a cash donation, itemized receipts documenting the amount of the cash donation and the purchase costs of the new machinery and equipment.
2. To claim the credit granted by § 26-51-1102, the taxpayer shall show that the Director of the Arkansas Economic Development Commission and the Director of the Division of Higher Education have approved the qualified research expenditure as a part of a qualified research program.
3. Copies of each of the above documents shall be filed by the taxpayer with the Arkansas Economic Development Commission and with his or her return as an attachment to the form prescribed by the Secretary of the Department of Finance and Administration.
1. To apply for a credit under this subchapter, a taxpayer shall submit an original application and one (1) copy to the Director of the Arkansas Economic Development Commission on the forms prescribed by the director.
2. The director shall review each application submitted under this subchapter and shall either:
  1. Approve the application; or
  2. Reject the application and notify the applicant of the deficiencies in the application.
3. An applicant that receives approval from the director under this section shall sign a financial incentive agreement outlining the terms and conditions of the credit granted under this subchapter.
4. An applicant may resubmit a rejected application after addressing any deficiencies identified by the director.
5. For an application submitted on or after July 24, 2019, an expenditure incurred before the approval date of the financial incentive agreement required under subsection (b) of this section shall be denied a credit under this subchapter.
1. To claim the benefits of this section, § 26-51-1201, and § 26-51-1203, a taxpayer must obtain a certification from the Director of the Arkansas Economic Development Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer:
  1. Operates a steel mill in Arkansas which began production after February 16, 1987; and
  2. Has invested, after February 16, 1987, in excess of one hundred twenty million dollars ($120,000,000) in the steel mill, which investment expenditure is for one (1) of the following:
    1. Property purchased for use in the construction of a building or buildings or any addition or improvement thereon to house the steel mill;
    2. Machinery and equipment to be located in or in connection with the steel mill. Motor vehicles of a type subject to registration shall not be considered as machinery and equipment; or
    3. Project planning costs or construction labor costs, including on-site direct labor and supervision, whether employed by a contractor or the project owner; architectural fees, engineering fees, or both; right-of-way purchases; utility extensions; site preparation; parking lots; disposal or containment systems; water and sewer treatment systems; rail spurs; streets and roads; purchase of mineral rights; land; buildings; building renovation; production, processing, and testing equipment; freight charges; building demolition; material handling equipment; drainage systems; water tanks and reservoirs; storage facilities; equipment rental; contractor's cost plus fees; builders risk insurance; original spare parts; job administrative expenses; office furnishings and equipment; rolling stock; capitalized start-up costs as recognized by generally accepted accounting principles; and other costs related to the construction.
2. As used in subdivision (a)(2)(C) of this section, “production and processing equipment” includes machinery and equipment essential for the receiving, storing, processing, and testing of raw materials and the production, storage, testing, and shipping of finished products, including facilities for the production of steam, electricity, chemicals, and other materials that are essential to the manufacturing process, but which are consumed in the manufacturing process and do not become essential components of the finished product.
1. Taxpayers qualified under § 26-51-1202(a) and (b), entitled to a net operating loss deduction as provided in § 26-51-427, may carry forward that deduction to the next succeeding taxable year following the year of the net operating loss and annually thereafter for a total period of ten (10) years or until the net operating loss has been exhausted, whichever is earlier.
2. The net operating loss deduction must be carried forward in the order named above.
1. Taxpayers qualified under § 26-51-1212(2) and entitled to a net operating loss deduction as provided in § 26-51-427 may carry forward that deduction to the next-succeeding taxable year following the year of such net operating loss and annually thereafter for a total period of ten (10) years or until such net operating loss has been exhausted, whichever is earlier.
2. The net operating loss deduction must be carried forward in the order named above.
1. Sales of natural gas and electricity to taxpayers qualified under § 26-51-1212(1) or § 26-51-1212(2) for use in connection with the steel mill shall be exempt from the Arkansas gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas compensating use tax, levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any other state or local tax administered under those acts.
2. The benefits of exemptions granted pursuant to this section shall become effective on July 1, 1991.
1. As used in this section, “waste reduction, reuse, or recycling equipment” means the same as defined in § 26-51-506 except that it also includes production, processing, and testing equipment used to manufacture products containing recovered materials.
2. To be eligible for the income tax credit allowed under this section, a taxpayer shall:
  1. Be a qualified manufacturer of steel as defined in § 26-51-1211, § 26-52-901, § 26-52-911, Acts 2013, No. 1084, or Acts 2013, No. 1476;
  2. Have made the minimum investment required under § 26-51-1212, § 26-52-902, § 26-52-912, Acts 2013, No. 1084, or Acts 2013, No. 1476; and
  3. Either:
    1. Have obtained a certification under § 26-51-1212, § 26-52-902, § 26-52-912, Acts 2013, No. 1084, or Acts 2013, No. 1476; or
    2. Be located on the same or an adjacent manufacturing site as a qualified manufacturer of steel that has obtained such a certification.
3. 1. A qualified manufacturer of steel that qualifies for the income tax credit for the purchase of waste reduction, reuse, or recycling equipment under § 26-51-506 may carry forward any unused income tax credit earned under § 26-51-506 for a period of fourteen (14) consecutive years following the taxable year in which the income tax credit originated.
  2. Acts 2013, No. 1084, § 5(b) and § 7(a)(1)(B), and Acts 2013, No. 1476, shall continue to apply to the carry forward period for qualified manufacturers of steel certified under those acts.
  3. Income tax credits that would otherwise expire during the carry forward period shall be claimed first.
4. To claim the benefits of § 26-51-506, a qualified manufacturer of steel shall either:
  1. Meet the requirements of § 26-51-506(d); or
  2. Obtain a certification from the Director of the Division of Environmental Quality certifying to the Revenue Division of the Department of Finance and Administration that:
    1. The qualified manufacturer of steel is engaged in the business of reducing, reusing, or recycling solid waste material for commercial purposes, whether or not for profit;
    2. The machinery or equipment purchased is waste reduction, reuse, or recycling equipment;
    3. The machinery or equipment is being used in the collection, separation, processing, modification, conversion, treatment, or manufacturing of products containing at least twenty-five percent (25%) postconsumer waste; and
    4. The qualified manufacturer of steel has filed a statement with the director acknowledging that the qualified manufacturer of steel will make a good faith effort to utilize Arkansas postconsumer waste as a part of the materials used.
5. 1. Except as provided in subdivision (e)(2) of this section, § 26-51-506(f) does not apply to a qualified manufacturer of steel meeting the requirements of this section.
  2. A qualified manufacturer of steel shall refund the amount required under subdivision (e)(3) of this section if within three (3) years of the taxable year in which the credit originated:
    1. 1. The waste reduction, reuse, or recycling equipment is removed from Arkansas, disposed of, or transferred to another person, or the qualified manufacturer of steel otherwise ceases to use the required materials or operate in accordance with § 26-51-506 or this section.
      2. Reorganization transactions, changes of ownership and control, and sales and transfers of waste reduction, reuse, or recycling equipment among affiliates that do not constitute sales or transfers to a third-party purchaser are not disposals, transfers, or cessations of use for purposes of § 26-51-506 or this section; or
    2. The director finds that the qualified manufacturer of steel has operated the waste reduction, reuse, or recycling equipment in a manner that demonstrates a pattern of intentional failure to comply with final administrative or judicial orders that clearly indicates a disregard for environmental regulation.
  3. If a qualified manufacturer of steel is required to make a refund under subdivision (e)(2) of this section, the qualified manufacturer of steel shall refund the amount of the allowed income tax credit claimed by the qualified manufacturer of steel that exceeds the following amounts:
    1. Within the first taxable year, zero dollars ($0.00);
    2. Within the second taxable year, an amount equal to thirty-three percent (33%) of the amount of credit allowed; and
    3. Within the third taxable year, an amount equal to sixty-seven percent (67%) of the credit allowed.
  4. A refund required under subdivision (e)(2)(A) of this section applies only to the credit given for the particular waste reduction, reuse, or recycling equipment to which subdivision (e)(2)(A) of this section applies.
  5. A qualified manufacturer of steel that is required to refund part of an income tax credit under this section shall no longer be eligible to carry forward any amount of the income tax credit that had not been used as of the date the refund is required.
6. A qualified manufacturer of steel aggrieved by a decision of the director under this section may appeal to the Arkansas Pollution Control and Ecology Commission through administrative procedures adopted by the commission and to the courts in the manner provided in §§ 8-4-222 — 8-4-229.
7. Acts 2013, No. 1084, and Acts 2013, No. 1476, continue in full force and effect and are not amended or limited by this section.
8. This section applies only to income tax credits certified on or after January 1, 2015.
1. Every holder of a franchise to conduct dog racing or horse racing in this state making any single payment of racing winnings on a single wagering transaction of more than one thousand dollars ($1,000), if the amount of the racing winnings is at least three hundred (300) times as large as the amount wagered, shall deduct and withhold an amount equal to seven percent (7%) from the racing winnings.
2. The amount deducted and withheld from any person receiving racing winnings during the income year shall be credited against the tax liability of that person under the Income Tax Act of 1929, § 26-51-101 et seq.
1. Every franchise holder required to deduct and withhold income tax from racing winnings under this subchapter shall file an annual statement of withholding for each person receiving racing winnings subject to withholding under this subchapter.
2. 1. The annual statement shall be in the form prescribed by the Secretary of the Department of Finance and Administration and shall be filed with the secretary.
  2. Two (2) copies of the statement shall be furnished to each person who had received racing winnings during the income year before January 31 following the close of the income year.
3. The statement shall show:
  1. The name and withholding account number of the franchise holder;
  2. The name and address of the person who had received the racing winnings and his or her taxpayer identification number;
  3. The total amount of the racing winnings subject to withholding paid by the franchise holder to the recipient of the racing winnings;
  4. The total amount withheld from the recipient's racing winnings by the franchise holder pursuant to this subchapter for the income year; and
  5. Such other information as the secretary shall require by rule.
1. Every holder of a franchise to conduct dog racing, horse racing, or electronic games of skill who fails to withhold or pay to the Secretary of the Department of Finance and Administration any sums required by this subchapter to be withheld and paid shall be personally and individually liable therefor. Any sum or sums withheld in accordance with the provisions of this subchapter shall be deemed to be held in trust for the State of Arkansas and shall be recorded by the franchise holder in a ledger account so as to clearly indicate the amount of tax withheld and that the amount is the property of the State of Arkansas.
2. Every person who is to receive a payment of racing winnings or gaming winnings that are subject to this subchapter shall furnish the person making the payment a statement, made under penalties of perjury, containing the name, address, and taxpayer identification number of the person receiving the payment and of each person entitled to any portion of the payment.
1. There is levied, assessed, and collected a gaming winnings tax of three percent (3%) on any single payment of winnings from electronic games of skill of one thousand two hundred dollars ($1,200) or more paid on a single electronic game of skill wager.
2. The holder of a franchise to conduct electronic games of skill shall:
  1. Deduct and withhold the tax from winnings from electronic games of skill upon which the tax is levied by subsection (a) of this section; and
  2. Remit the tax to the Secretary of the Department of Finance and Administration as provided in § 26-51-1310 and as prescribed by rules promulgated by the secretary.
1. The holder of a franchise to conduct electronic games of skill in this state shall register to withhold the gaming winnings tax under § 26-51-1309 from winnings from electronic games of skill in the manner prescribed by the Secretary of the Department of Finance and Administration.
2. The withholding account used to report and remit the withholding on wages shall not be used to report withholding on winnings from electronic games of skill.
3. A separate account for withholding on winnings from electronic games of skill shall be obtained from the Revenue Division of the Department of Finance and Administration.
4. Each holder of a franchise to conduct electronic games of skill shall file a monthly return and remit the tax withheld from winnings from electronic games of skill on or before the fifteenth day of the month following the month in which the tax was withheld.
5. The holder of a franchise to conduct electronic games of skill shall keep the following records and information for three (3) years after the date the tax becomes due or is paid, whichever is later:
  1. The total gaming winnings paid;
  2. The amount of gaming winnings tax withheld and remitted;
  3. The name, address, and Social Security number or taxpayer identification number of the party in receipt of gaming winnings; and
  4. The name, address, and Arkansas identification number of the holder of a franchise to conduct electronic games of skill.
6. 1. Gaming winnings are not includable as income on the payee's regular Arkansas income tax return.
  2. The amount of tax paid or withheld on gaming winnings under § 26-51-1309 shall not be claimed under the Income Tax Act of 1929, § 26-51-101 et seq., on an Arkansas income tax return to:
    1. Offset a tax liability;
    2. Create a refund; or
    3. Generate any other type of credit or offset for income tax purposes.
  3. Losses sustained from electronic games of skill wagers are not deductible under the Income Tax Act of 1929, § 26-51-101 et seq., on Arkansas income tax returns.
1. Except as otherwise specifically provided, a financial institution whose business activity is taxable both within and without this state shall allocate and apportion its net income as provided in this subchapter. All items of nonbusiness income, income which is not includable in the apportionable income tax base, shall be allocated pursuant to the provisions of §§ 26-51-704 — 26-51-708. A financial institution organized under the laws of a foreign country, the Commonwealth of Puerto Rico, or a territory or possession of the United States whose effectively connected income, as defined under the Internal Revenue Code, 26 U.S.C. § 1 et seq., as in effect January 1, 1995, is taxable both within this state and within another state, other than the state in which it is organized, shall allocate and apportion its net income as provided in this subchapter.
2. 1. All business income, income which is includable in the apportionable income tax base, shall be apportioned to this state by multiplying such income by the apportionment percentage.
  2. The apportionment percentage is determined by adding the taxpayer's receipts factor as described in § 26-51-1403, property factor as described in § 26-51-1404, and payroll factor as described in § 26-51-1405 together and dividing the sum by three (3). If one (1) of the factors is missing, the two (2) remaining factors are added and the sum is divided by two (2). If two (2) of the factors are missing, the remaining factor is the apportionment percentage. A factor is missing if both its numerator and denominator are zero, but it is not missing merely because its numerator is zero.
3. Each factor shall be computed according to the method of accounting, cash or accrual basis, used by the taxpayer for the taxable year.
4. If the allocation and apportionment provisions of this subchapter do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for, or the Secretary of the Department of Finance and Administration may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
  1. Separate accounting;
  2. The exclusion of any one (1) or more of the factors;
  3. The inclusion of one (1) or more additional factors which will fairly represent the taxpayer's business activity in this state; or
  4. The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
1. Except as otherwise specifically provided, a financial institution whose business activity is taxable both within and without this state shall allocate and apportion its net income as provided in this subchapter. All items of nonbusiness income, income that is not includable in the apportionable income tax base, shall be allocated under §§ 26-51-704 — 26-51-708. A financial institution organized under the laws of a foreign country, the Commonwealth of Puerto Rico, or a territory or possession of the United States whose effectively connected income, as defined under the Internal Revenue Code, 26 U.S.C. § 1 et seq., as in effect January 1, 1995, is taxable both within this state and within another state, other than the state in which it is organized, shall allocate and apportion its net income as provided in this subchapter.
2. All business income, income which is includable in the apportionable income tax base, shall be apportioned to this state by multiplying such income by the taxpayer's receipts factor as described in § 26-51-1403.
3. The taxpayer's receipts factor shall be computed according to the method of accounting, cash or accrual basis, used by the taxpayer for the taxable year.
4. If the allocation and apportionment provisions of this subchapter do not fairly represent the extent of the taxpayer's business activity in this state, the taxpayer may petition for, or the Secretary of the Department of Finance and Administration may require, in respect to all or any part of the taxpayer's business activity, if reasonable:
  1. Separate accounting;
  2. The inclusion of one (1) or more additional factors which will fairly represent the taxpayer's business activity in this state; or
  3. The employment of any other method to effectuate an equitable allocation and apportionment of the taxpayer's income.
1. Generally.
  1. 1. The receipts factor is a fraction, the numerator of which is the receipts of the taxpayer in this state during the taxable year and the denominator of which is the receipts of the taxpayer within and without this state during the taxable year.
    2. The method of calculating receipts for purposes of the denominator is the same as the method used in determining receipts for purposes of the numerator.
  2. The receipts factor shall include only those receipts described herein which constitute business income and are included in the computation of the apportionable income base for the taxable year.
2. Receipts From the Lease of Real Property. The numerator of the receipts factor includes:
  1. Receipts from the lease or rental of real property owned by the taxpayer if the property is located within this state; or
  2. Receipts from the sublease of real property if the property is located within this state.
3. Receipts From the Lease of Tangible Personal Property.
  1. Except as described in subdivision (c)(2) of this section, the numerator of the receipts factor includes receipts from the lease or rental of tangible personal property owned by the taxpayer if the property is located within this state when it is first placed in service by the lessee.
  2. 1. Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property is used in this state.
    2. The extent an aircraft will be deemed to be used in this state and the amount of receipts that is to be included in the numerator of this state's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft.
    3. If the extent of the use of any transportation property within this state cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations.
    4. A motor vehicle will be deemed to be used wholly in the state in which it is registered.
4. Interest From Loans Secured by Real Property.
  1. 1. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within this state.
    2. If the property is located both within this state and one (1) or more other states, the receipts described in this subsection are included in the numerator of the receipts factor if more than fifty percent (50%) of the fair market value of the real property is located within this state.
    3. If more than fifty percent (50%) of the fair market value of the real property is not located within any (1) one state, then the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in this state.
  2. The determination of whether the real property securing a loan is located within this state shall be made as of the time the original agreement was made, and any and all subsequent substitutions of collateral shall be disregarded.
5. Interest From Loans Not Secured by Real Property. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower is located in this state.
6. Net Gains From the Sale of Loans.
  1. The numerator of the receipts factor includes net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of 26 U.S.C. § 1286, as in effect January 1, 1995.
  2. The amount of net gains, but not less than zero (0), from the sale of loans secured by real property included in the numerator is determined by multiplying such net gains by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
  3. The amount of net gains, but not less than zero (0), from the sale of loans not secured by real property included in the numerator is determined by multiplying such net gains by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
7. Receipts From Credit Card Receivables. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to cardholders, such as annual fees, if the billing address of the cardholder is in this state.
8. Net Gains From the Sale of Credit Card Receivables. The numerator of the receipts factor includes net gains, but not less than zero (0), from the sale of credit card receivables multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) of this section and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.
9. Credit Card Issuer's Reimbursement Fees. The numerator of the receipts factor includes all credit card issuer's reimbursement fees multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) of this section and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to cardholders.
10. Receipts From Merchant Discount. The numerator of the receipts factor includes receipts from merchant discount if the commercial domicile of the merchant is in this state. Such receipts shall be computed net of any card holder charge backs, but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its cardholders.
11. Loan Servicing Fees.
  1. 1. The numerator of the receipts factor includes loan servicing fees derived from loans secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
    2. The numerator of the receipts factor includes loan servicing fees derived from loans not secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
  2. In circumstances in which the taxpayer receives loan servicing fees for servicing either the secured or the unsecured loans of another, the numerator of the receipts factor shall include such fees if the borrower is located in this state.
12. Receipts From Services.
  1. The numerator of the receipts factor includes receipts from services not otherwise apportioned under this section if the service is performed in this state.
  2. If the service is performed both within and without this state, the numerator of the receipts factor includes receipts from services not otherwise apportioned under this section, if a greater proportion of the income-producing activity is performed in this state based on cost of performance.
13. Receipts From Investment Assets and Activities and Trading Assets and Activities.
  1. 1. Interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities shall be included in the receipts factor.
    2. Investment assets and activities and trading assets and activities include, but are not limited to:
      1. Investment securities;
      2. Trading account assets;
      3. Federal funds;
      4. Securities purchased and sold under agreements to resell or repurchase;
      5. Options;
      6. Futures contracts;
      7. Forward contracts;
      8. Notional principal contracts such as swaps;
      9. Equities; and
      10. Foreign currency transactions.
    3. With respect to the investment and trading assets and activities described in subdivisions (m)(1)(D) and (E) of this section, the receipts factor shall include the amounts described in subdivisions (m)(1)(D) and (E) of this section.
    4. The receipts factor shall include the amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements.
    5. The receipts factor shall include the amount by which interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and activities.
  2. 1. The numerator of the receipts factor includes interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities described in subdivision (m)(1) of this section that are attributable to this state.
    2. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
    3. The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(D) of this section from such funds and such securities by a fraction, the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.
    4. The amount of interest, dividends, gains, and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and in foreign currency transactions, but excluding amounts described in subdivision (m)(2)(B) or subdivision (m)(2)(C) of this section, attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(E) of this section by a fraction, the numerator of which is the average value of such trading assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
    5. For purposes of this subdivision (m)(2), average value shall be determined using the rules for determining the average value of tangible personal property set forth in § 26-51-1404(c) and (d).
  3. 1. In lieu of using the method set forth in subdivision (m)(2) of this section, the taxpayer may elect, or the Secretary of the Department of Finance and Administration may require in order to fairly represent the business activity of the taxpayer in this state, the use of the method set forth in this subdivision (m)(3).
    2. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the gross income from such assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
    3. The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(D) of this section from such funds and such securities by a fraction, the numerator of which is the gross income from such funds and such securities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such funds and such securities.
    4. The amount of interest, dividends, gains, and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and in foreign currency transactions, but excluding amounts described in subdivision (m)(3)(B) or subdivision (m)(3)(C) of this section, attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(E) of this section by a fraction, the numerator of which is the gross income from such trading assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
  4. If the taxpayer elects or is required by the secretary to use the method set forth in subdivision (m)(3) of this section, it shall use this method on all subsequent returns unless the taxpayer receives prior permission from the secretary to use, or the secretary requires, a different method.
  5. The taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this state by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this state. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one (1) regular place of business and one (1) such regular place of business is in this state and one (1) such regular place of business is outside this state, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the commercial domicile of the taxpayer.
14. All Other Receipts. The numerator of the receipts factor includes all other receipts pursuant to the rules set forth in §§ 26-51-715 — 26-51-717.
15. Attribution of Certain Receipts to Commercial Domicile. All receipts which would be assigned under this section to a state in which the taxpayer is not taxable shall be included in the numerator of the receipts factor, if the taxpayer's commercial domicile is in this state.
1. Generally.
  1. 1. The receipts factor is a fraction, the numerator of which is the total receipts of the taxpayer in this state during the taxable year and the denominator of which is the total receipts of the taxpayer within and without this state during the taxable year.
    2. The method of calculating receipts for purposes of the denominator is the same as the method used in determining receipts for purposes of the numerator.
  2. The receipts factor shall include only those receipts described herein which constitute business income and are included in the computation of the apportionable income base for the taxable year.
2. Receipts From the Lease of Real Property. The numerator of the receipts factor includes:
  1. Receipts from the lease or rental of real property owned by the taxpayer if the property is located within this state; or
  2. Receipts from the sublease of real property if the property is located within this state.
3. Receipts From the Lease of Tangible Personal Property.
  1. Except as described in subdivision (c)(2) of this section, the numerator of the receipts factor includes receipts from the lease or rental of tangible personal property owned by the taxpayer if the property is located within this state when it is first placed in service by the lessee.
  2. 1. Receipts from the lease or rental of transportation property owned by the taxpayer are included in the numerator of the receipts factor to the extent that the property is used in this state.
    2. The extent an aircraft will be deemed to be used in this state and the amount of receipts that is to be included in the numerator of this state's receipts factor is determined by multiplying all the receipts from the lease or rental of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft.
    3. If the extent of the use of any transportation property within this state cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations.
    4. A motor vehicle will be deemed to be used wholly in the state in which it is registered.
4. Interest From Loans Secured by Real Property.
  1. 1. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans secured by real property if the property is located within this state.
    2. If the property is located both within this state and one (1) or more other states, the receipts described in this subsection are included in the numerator of the receipts factor if more than fifty percent (50%) of the fair market value of the real property is located within this state.
    3. If more than fifty percent (50%) of the fair market value of the real property is not located within any (1) one state, then the receipts described in this subsection shall be included in the numerator of the receipts factor if the borrower is located in this state.
  2. The determination of whether the real property securing a loan is located within this state shall be made as of the time the original agreement was made, and any and all subsequent substitutions of collateral shall be disregarded.
5. Interest From Loans Not Secured by Real Property. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from loans not secured by real property if the borrower is located in this state.
6. Net Gains From the Sale of Loans.
  1. The numerator of the receipts factor includes net gains from the sale of loans. Net gains from the sale of loans includes income recorded under the coupon stripping rules of 26 U.S.C. § 1286, as in effect January 1, 1995.
  2. The amount of net gains, but not less than zero (0), from the sale of loans secured by real property included in the numerator is determined by multiplying such net gains by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
  3. The amount of net gains, but not less than zero (0), from the sale of loans not secured by real property included in the numerator is determined by multiplying such net gains by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
7. Receipts From Credit Card Receivables. The numerator of the receipts factor includes interest and fees or penalties in the nature of interest from credit card receivables and receipts from fees charged to cardholders, such as annual fees, if the billing address of the cardholder is in this state.
8. Net Gains From the Sale of Credit Card Receivables. The numerator of the receipts factor includes net gains, but not less than zero (0), from the sale of credit card receivables multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) of this section and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to card holders.
9. Credit Card Issuer's Reimbursement Fees. The numerator of the receipts factor includes all credit card issuer's reimbursement fees multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (g) of this section and the denominator of which is the taxpayer's total amount of interest and fees or penalties in the nature of interest from credit card receivables and fees charged to cardholders.
10. Receipts From Merchant Discount. The numerator of the receipts factor includes receipts from merchant discount if the commercial domicile of the merchant is in this state. Such receipts shall be computed net of any card holder charge backs, but shall not be reduced by any interchange transaction fees or by any issuer's reimbursement fees paid to another for charges made by its cardholders.
11. Loan Servicing Fees.
  1. 1. The numerator of the receipts factor includes loan servicing fees derived from loans secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (d) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans secured by real property.
    2. The numerator of the receipts factor includes loan servicing fees derived from loans not secured by real property multiplied by a fraction, the numerator of which is the amount included in the numerator of the receipts factor pursuant to subsection (e) of this section and the denominator of which is the total amount of interest and fees or penalties in the nature of interest from loans not secured by real property.
  2. In circumstances in which the taxpayer receives loan servicing fees for servicing either the secured or the unsecured loans of another, the numerator of the receipts factor shall include such fees if the borrower is located in this state.
12. Receipts From Services.
  1. The numerator of the receipts factor includes receipts from services not otherwise apportioned under this section if the service is performed in this state.
  2. If the service is performed both within and without this state, the numerator of the receipts factor includes receipts from services not otherwise apportioned under this section, if a greater proportion of the income-producing activity is performed in this state based on cost of performance.
13. Receipts From Investment Assets and Activities and Trading Assets and Activities.
  1. 1. Interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities shall be included in the receipts factor.
    2. Investment assets and activities and trading assets and activities include, but are not limited to:
      1. Investment securities;
      2. Trading account assets;
      3. Federal funds;
      4. Securities purchased and sold under agreements to resell or repurchase;
      5. Options;
      6. Futures contracts;
      7. Forward contracts;
      8. Notional principal contracts such as swaps;
      9. Equities; and
      10. Foreign currency transactions.
    3. With respect to the investment and trading assets and activities described in subdivisions (m)(1)(D) and (E) of this section, the receipts factor shall include the amounts described in subdivisions (m)(1)(D) and (E) of this section.
    4. The receipts factor shall include the amount by which interest from federal funds sold and securities purchased under resale agreements exceeds interest expense on federal funds purchased and securities sold under repurchase agreements.
    5. The receipts factor shall include the amount by which interest, dividends, gains and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book, and foreign currency transactions, exceed amounts paid in lieu of interest, amounts paid in lieu of dividends, and losses from such assets and activities.
  2. 1. The numerator of the receipts factor includes interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities and from trading assets and activities described in subdivision (m)(1) of this section that are attributable to this state.
    2. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the average value of such assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
    3. The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(D) of this section from such funds and such securities by a fraction, the numerator of which is the average value of federal funds sold and securities purchased under agreements to resell which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such funds and such securities.
    4. The amount of interest, dividends, gains, and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and in foreign currency transactions, but excluding amounts described in subdivision (m)(2)(B) or subdivision (m)(2)(C) of this section, attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(E) of this section by a fraction, the numerator of which is the average value of such trading assets which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the average value of all such assets.
    5. For purposes of this subdivision (m)(2), average value shall be determined using the rules for determining the average value of tangible personal property set forth in § 26-51-1404(c) and (d).
  3. 1. In lieu of using the method set forth in subdivision (m)(2) of this section, the taxpayer may elect, or the Secretary of the Department of Finance and Administration may require in order to fairly represent the business activity of the taxpayer in this state, the use of the method set forth in this subdivision (m)(3).
    2. The amount of interest, dividends, net gains, but not less than zero (0), and other income from investment assets and activities in the investment account to be attributed to this state and included in the numerator is determined by multiplying all such income from such assets and activities by a fraction, the numerator of which is the gross income from such assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
    3. The amount of interest from federal funds sold and purchased and from securities purchased under resale agreements and securities sold under repurchase agreements attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(D) of this section from such funds and such securities by a fraction, the numerator of which is the gross income from such funds and such securities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such funds and such securities.
    4. The amount of interest, dividends, gains, and other income from trading assets and activities, including, but not limited to, assets and activities in the matched book, in the arbitrage book and in foreign currency transactions, but excluding amounts described in subdivision (m)(3)(B) or subdivision (m)(3)(C) of this section, attributable to this state and included in the numerator is determined by multiplying the amount described in subdivision (m)(1)(E) of this section by a fraction, the numerator of which is the gross income from such trading assets and activities which are properly assigned to a regular place of business of the taxpayer within this state and the denominator of which is the gross income from all such assets and activities.
  4. If the taxpayer elects or is required by the secretary to use the method set forth in subdivision (m)(3) of this section, it shall use this method on all subsequent returns unless the taxpayer receives prior permission from the secretary to use, or the secretary requires, a different method.
  5. The taxpayer shall have the burden of proving that an investment asset or activity or trading asset or activity was properly assigned to a regular place of business outside of this state by demonstrating that the day-to-day decisions regarding the asset or activity occurred at a regular place of business outside this state. Where the day-to-day decisions regarding an investment asset or activity or trading asset or activity occur at more than one (1) regular place of business and one (1) such regular place of business is in this state and one (1) such regular place of business is outside this state, such asset or activity shall be considered to be located at the regular place of business of the taxpayer where the investment or trading policies or guidelines with respect to the asset or activity are established. Unless the taxpayer demonstrates to the contrary, such policies and guidelines shall be presumed to be established at the commercial domicile of the taxpayer.
14. All Other Receipts. The numerator of the receipts factor includes all other receipts under the rules set out in §§ 26-51-716 and 26-51-717.
15. Attribution of Certain Receipts to Commercial Domicile. All receipts which would be assigned under this section to a state in which the taxpayer is not taxable shall be included in the numerator of the receipts factor, if the taxpayer's commercial domicile is in this state.
1. Generally. The property factor is a fraction, the numerator of which is the average value of real property and tangible personal property rented to the taxpayer that is located or used within this state during the taxable year, the average value of the taxpayer's real and tangible personal property owned that is located or used within this state during the taxable year, and the average value of the taxpayer's loans and credit card receivables that are located within this state during the taxable year; and the denominator of which is the average value of all such property located or used within and without this state during the taxable year.
2. Property Included. The property factor shall include only property the income or expenses of which are included, or would have been included if not fully depreciated or expensed, or depreciated or expensed to a nominal amount, in the computation of the apportionable income base for the taxable year.
3. Value of Property Owned by the Taxpayer.
  1. The value of real property and tangible personal property owned by the taxpayer is the original cost or other basis of such property for federal income tax purposes without regard to depletion, depreciation, or amortization.
  2. Loans are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a loan is charged off, in whole or in part, for federal income tax purposes, the portion of the loan charged off is not outstanding. A specifically allocated reserve established pursuant to regulatory or financial accounting guidelines which is treated as charged off for federal income tax purposes shall be treated as charged off for purposes of this section.
  3. Credit card receivables are valued at their outstanding principal balance, without regard to any reserve for bad debts. If a credit card receivable is charged off, in whole or in part, for federal income tax purposes, the portion of the receivable charged off is not outstanding.
4. Average Value of Property Owned by the Taxpayer.
  1. The average value of property owned by the taxpayer is computed on an annual basis by adding the value of the property on the first day of the taxable year and the value on the last day of the taxable year and dividing the sum by two (2).
  2. If averaging on this basis does not properly reflect average value, the Secretary of the Department of Finance and Administration may require averaging on a more frequent basis.
  3. The taxpayer may elect to average on a more frequent basis.
  4. When averaging on a more frequent basis is required by the secretary or is elected by the taxpayer, the same method of valuation must be used consistently by the taxpayer with respect to property within and without this state and on all subsequent returns unless the taxpayer receives prior permission from the secretary or the secretary requires a different method of determining average value.
5. Average Value of Real Property and Tangible Personal Property Rented to the Taxpayer.
  1. The average value of real property and tangible personal property that the taxpayer has rented from another, and which is not treated as property owned by the taxpayer for federal income tax purposes, shall be determined annually by multiplying the gross rents payable during the taxable year by eight (8).
  2. 1. Where the use of the general method described in this subsection results in inaccurate valuations of rented property, any other method which properly reflects the value may be adopted by the secretary or by the taxpayer when approved in writing by the secretary.
    2. Once approved, such other method of valuation must be used on all subsequent returns unless the taxpayer receives prior approval from the secretary or unless the secretary requires a different method of valuation.
6. Location of Real Property and Tangible Personal Property Owned by or Rented to the Taxpayer.
  1. Except as described in subdivision (f)(2) of this section, real property and tangible personal property owned by or rented to the taxpayer is considered to be located within this state if it is physically located, situated, or used within this state.
  2. 1. Transportation property is included in the numerator of the property factor to the extent that the property is used in this state.
    2. The extent an aircraft will be deemed to be used in this state and the amount of value that is to be included in the numerator of this state's property factor is determined by multiplying the average value of the aircraft by a fraction, the numerator of which is the number of landings of the aircraft in this state and the denominator of which is the total number of landings of the aircraft everywhere.
    3. If the extent of the use of any transportation property within this state cannot be determined, then the property will be deemed to be used wholly in the state in which the property has its principal base of operations.
    4. A motor vehicle will be deemed to be used wholly in the state in which it is registered.
7. Location of Loans.
  1. 1. A loan is considered to be located within this state if it is properly assigned to a regular place of business of the taxpayer within this state.
    2. A loan is properly assigned to the regular place of business with which it has a preponderance of substantive contacts.
  2. 1. A loan assigned by the taxpayer to a regular place of business without the state shall be presumed to have been properly assigned if:
      1. The taxpayer has assigned, in the regular course of its business, such loan on its records to a regular place of business consistent with federal or state regulatory requirements;
      2. Such assignment on its records is based upon substantive contacts of the loan to such regular place of business; and
      3. The taxpayer uses said records reflecting assignment of loans for the filing of all state and local tax returns for which an assignment of loans to a regular place of business is required.
    2. The presumption of proper assignment of a loan provided in subdivisions (g)(1)(B) and (g)(2)(A) of this section may be rebutted upon a showing by the secretary, supported by a preponderance of the evidence, that the preponderance of substantive contacts regarding such loan did not occur at the regular place of business to which it was assigned on the taxpayer's records.
    3. When such presumption has been rebutted, the loan shall then be located within this state if:
      1. The taxpayer had a regular place of business within this state at the time the loan was made; and
      2. The taxpayer fails to show, by a preponderance of the evidence, that the preponderance of substantive contacts regarding such loan did not occur within this state.
  3. In the case of a loan which is assigned by the taxpayer to a place without this state which is not a regular place of business, it shall be presumed, subject to rebuttal by the taxpayer on a showing supported by the preponderance of evidence, that the preponderance of substantive contacts regarding the loan occurred within this state, if, at the time the loan was made, the taxpayer's commercial domicile, as defined by § 26-51-1402(3), was within this state.
  4. 1. To determine the state in which the preponderance of substantive contacts relating to a loan have occurred, the facts and circumstances regarding the loan at issue shall be reviewed on a case-by-case basis, and consideration shall be given to such activities as the solicitation, investigation, negotiation, approval, and administration of the loan.
    2. The terms “solicitation”, “investigation”, “negotiation”, “approval”, and “administration” are defined as follows:
      1. “Solicitation” is either active or passive.
        
        Active solicitation occurs when an employee of the taxpayer initiates the contact with the customer. Such activity is located at the regular place of business which the taxpayer's employee is regularly connected with or working out of, regardless of where the services of such employee were actually performed.
        
        Passive solicitation occurs when the customer initiates the contact with the taxpayer. If the customer's initial contact was not at a regular place of business of the taxpayer, the regular place of business, if any, where the passive solicitation occurred is determined by the facts in each case;
      2. “Investigation” is the procedure whereby employees of the taxpayer determine the credit-worthiness of the customer, as well as the degree of risk involved in making a particular agreement. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed;
      3. “Negotiation” is the procedure whereby employees of the taxpayer and its customer determine the terms of the agreement, for example, the amount, duration, interest rate, frequency of repayment, currency denomination, and security required. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed;
      4. “Approval” is the procedure whereby employees or the board of directors of the taxpayer make the final determination whether to enter into the agreement. Such activity is located at the regular place of business which the taxpayer's employees are regularly connected with or working out of, regardless of where the services of such employees were actually performed. If the board of directors makes the final determination, such activity is located at the commercial domicile of the taxpayer; and
      5. “Administration” is the process of managing the account. This process includes bookkeeping, collecting the payments, corresponding with the customer, reporting to management regarding the status of the agreement, and proceeding against the borrower or the security interest if the borrower is in default. Such activity is located at the regular place of business which oversees this activity.
8. Location of Credit Card Receivables. For purposes of determining the location of credit card receivables, credit card receivables shall be treated as loans and shall be subject to the provisions of subsection (g) of this section.
9. Period for Which Properly Assigned Loan Remains Assigned. A loan that has been properly assigned to a state shall, absent any change of material fact, remain assigned to said state for the length of the original term of the loan. Thereafter, said loan may be properly assigned to another state if said loan has a preponderance of substantive contact to a regular place of business there.
1. 1. The value of real property and tangible personal property owned by the taxpayer is the original cost or other basis of such property for federal income tax purposes without regard to depletion, depreciation, or amortization.
  2. 1. Loans are valued at their outstanding principal balance, without regard to any reserve for bad debts.
    2. If a loan is charged off, in whole or in part, for federal income tax purposes, the portion of the loan charged off is not outstanding.
    3. A specifically allocated reserve established pursuant to regulatory or financial accounting guidelines that is treated as charged off for federal income tax purposes shall be treated as charged off for purposes of this section.
  3. 1. Credit card receivables are valued at their outstanding principal balance, without regard to any reserve for bad debts.
    2. If a credit card receivable is charged off, in whole or in part, for federal income tax purposes, the portion of the receivable charged off is not outstanding.
2. 1. The average value of property owned by the taxpayer is computed on an annual basis by adding the value of the property on the first day of the taxable year and the value on the last day of the taxable year and dividing the sum by two (2).
  2. If averaging on this basis does not properly reflect average value, the Secretary of the Department of Finance and Administration may require averaging on a more frequent basis.
  3. The taxpayer may elect to average on a more frequent basis.
  4. When averaging on a more frequent basis is required by the secretary or is elected by the taxpayer, the same method of valuation shall be used consistently by the taxpayer with respect to property within and without this state and on all subsequent returns unless the taxpayer receives prior permission from the secretary or the secretary requires a different method of determining average value.
1. Generally. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the taxable year by the taxpayer for compensation and the denominator of which is the total compensation paid both within and without this state during the taxable year. The payroll factor shall include only that compensation which is included in the computation of the apportionable income tax base for the taxable year.
2. Compensation Relating to Nonbusiness Income and Independent Contractors. The compensation of any employee for services or activities which are connected with the production of nonbusiness income, which is income that is not includable in the apportionable income base, and payments made to any independent contractor or any other person not properly classifiable as an employee shall be excluded from both the numerator and denominator of the factor.
3. When Compensation Paid in this State. Compensation is paid in this state if any one (1) of the following tests, applied consecutively, is met:
  1. The employee's services are performed entirely within this state;
  2. The employee's services are performed both within and without the state, but the service performed without the state is incidental to the employee's service within the state. “Incidental” means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction; and
  3. If the employee's services are performed both within and without this state, the employee's compensation will be attributed to this state:
    1. If the employee's principal base of operations is within this state;
    2. If there is no principal base of operations in any state in which some part of the services are performed, but the place from which the services are directed or controlled is in this state; or
    3. If the principal base of operations and the place from which the services are directed or controlled are not in any state in which some part of the service is performed but the employee's residence is in this state.
1. Wetlands and riparian zones have significant benefits to the state. They include:
  1. Flood impact mitigation by slowing storm water runoff;
  2. Water quality enhancement by removing sediment, nitrogen, phosphorus, and other pollutants from surface water;
  3. Habitats for fish and wildlife, including waterfowl and rare or endangered species;
  4. Groundwater recharge can occur in wetlands that will assist in ensuring that groundwater is available for the future;
  5. Recreational uses for hunting, fishing, hiking, et cetera, that not only add to the quality of life, but also have a significant economic impact on the state; and
  6. Timber and food production in properly managed wetlands can provide wood products, plants, and animals for human and livestock consumption.
2. Arkansas has lost over seventy percent (70%) of its pre-European settlement wetlands. Even though the rate of wetland loss in the United States has declined in recent years, wetlands in Arkansas continue to experience significant loss.
3. The majority of lands suitable for wetlands and riparian zones are held by private owners. The state should encourage these owners to restore and enhance existing wetlands and riparian zones and, when possible, create new wetlands and riparian zones.
4. The donation of wetland and riparian zone qualified real property interests should be encouraged by the state so that permanent protection of the conservation values of these lands is ensured.
1. There are two (2) types of tax credits available under this subchapter:
  1. Wetland and riparian zone creation and restoration tax credits, which shall apply to taxable years beginning on or after January 1, 1996, and all taxable years thereafter; and
  2. Wetland and riparian zone conservation tax credits, which shall apply to taxable years beginning on or after January 1, 2009, and all taxable years thereafter.
2. 1. Any taxpayer claiming a tax credit under this subchapter may not claim a credit under the Water Resource Conservation and Development Incentives Act, § 26-51-1001 et seq., or any similar act for any costs related to the same project.
  2. Any taxpayer claiming a tax credit under this subchapter may not claim a tax credit under any other act for any costs related to the same project.
3. Any tax credits issued to partnerships, limited liability companies, Subchapter S corporations, or fiduciaries may pass through to their members, managers, partners, shareholders, and beneficiaries.
1. There shall be allowed a wetland and riparian zone creation and restoration tax credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in an amount as determined in subsection (c) of this section for any taxpayer engaged in the creation or restoration of wetlands and riparian zones.
2. There shall be allowed a wetland and riparian zone conservation tax credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., in an amount as determined in subsection (c) of this section for any eligible donor who donates a qualified real property interest for a qualified conservation purpose to an eligible donee.
3. 1. The amount of the wetland and riparian zone creation and restoration tax credit allowed under subsection (a) of this section shall be equal to the project cost incurred in the creation or restoration of wetlands and riparian zones and shall not exceed fifty thousand dollars ($50,000).
  2. The amount of the wetland and riparian zone conservation tax credit allowed under subsection (b) of this section shall equal fifty percent (50%) of the fair market value of the qualified real property interest donation calculated to exclude any short term capital gain under 26 U.S.C. § 170(e)(1)(A), as in effect on January 1, 2009, and shall not exceed fifty thousand dollars ($50,000).
  3. 1. The amount of the tax credit under this subchapter that may be used by a taxpayer for a taxable year may not exceed the lesser of:
      1. The amount of individual or corporate income tax otherwise due; or
      2. Five thousand dollars ($5,000).
    2. Any unused tax credit under this subchapter may be carried over for a maximum of nine (9) consecutive taxable years following the taxable year in which the tax credit originated.
    3. Any unused tax credit under this subchapter shall survive the death of an individual taxpayer and may be used by the individual taxpayer's estate, subject to the limitations in this subdivision (c)(3).
  4. Tax credits under this subchapter may only be used by the taxpayer certified to earn a tax credit to offset the taxpayer's state income tax liability and are nontransferable.
  5. 1. Only one (1) wetland and riparian zone conservation tax credit may be earned per qualified real property interest donation.
    2. If the qualified real property interest is held in common ownership, the wetland and riparian zone conservation tax credit shall be allocated in proportion to each respective ownership share.
    3. If the qualified real property interest is held by a pass-through entity, the wetland and riparian zone conservation tax credit shall be allocated as prescribed under 26 U.S.C. § 704(b), as in effect on January 1, 2009, and corresponding regulations in 26 C.F.R. § 1.704-1(b)(4)(ii), as in effect on January 1, 2009.
  6. An eligible donor may earn only one (1) wetland and riparian zone conservation tax credit per income tax year.
4. To claim the benefits of this section, a taxpayer must obtain a certification from the Arkansas Natural Resources Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer has met all the requirements and qualifications set forth in § 26-51-1504(b)(2) and § 26-51-1507(a) for a wetland and riparian zone creation and restoration tax credit or § 26-51-1507(b) for a wetland and riparian zone conservation tax credit.
5. The division shall promulgate such rules as may be deemed necessary to carry out the tax credit provisions of this subchapter.
1. 1. The Arkansas Natural Resources Commission is charged with the responsibility of promulgating and administering rules related to the creation, restoration, and conservation of wetlands and riparian zones with the intent of qualifying for the tax credits provided for in this subchapter.
  2. Prior to adoption of any rules under this subchapter, the commission shall obtain comments on the proposed rules from the Private Wetland and Riparian Zone Creation, Restoration, and Conservation Committee.
2. 1. The commission may charge a reasonable application fee for the processing of tax credit applications.
  2. All fees collected shall be deposited into the Arkansas Water Development Fund.
1. 1. 1. Wetland and Riparian Zone Creation and Restoration Tax Credit.
    2. A taxpayer wishing to obtain a wetland and riparian zone creation and restoration tax credit shall submit an application to the Arkansas Natural Resources Commission.
    3. Upon receipt of the application, the commission shall make the application available to the Private Wetland and Riparian Zone Creation, Restoration, and Conservation Committee for its review and comment.
    4. After review of the committee comments, the commission may issue a wetland and riparian zone creation and restoration tax credit approval certificate for those applications proposing projects that meet the requirements of this subchapter and rules promulgated thereunder.
  2. 1. Project costs incurred after issuance of a wetland and riparian zone creation and restoration tax credit approval certificate may be claimed for a wetland and riparian zone creation and restoration tax credit, subject to the limitations in § 26-51-1505.
    2. A taxpayer must file the certificate of wetland and riparian zone creation and restoration tax credit approval with the taxpayer's income tax return for the first year in which the taxpayer claims a tax credit under this subchapter.
  3. 1. Upon completion and proper functioning of the project, the commission shall issue a certificate of completion.
    2. A taxpayer must file the certificate of completion with the first tax return filed after issuance of the certificate of completion.
2. 1. 1. Wetland and Riparian Zone Conservation Tax Credit.
    2. An eligible donor wishing to obtain a wetland and riparian zone conservation tax credit shall submit an application to the commission.
    3. Upon receipt of the application, the commission shall make the application available to the committee for its review and comment. The committee's review shall include the following considerations:
      1. Whether the appraisal of the qualified real property interest meets the minimum standards of the Uniform Standards of Professional Appraisal Practice and the Internal Revenue Service requirements for a qualified appraisal;
      2. Whether the qualified real property interest's valuation does not appear to be manifestly abusive;
      3. Whether the conservation purpose of the donation complies with the requirements of a qualified conservation purpose and contributes to the wetland and riparian zone benefits in § 26-51-1502;
      4. Whether the real property interest meets the requirements for a qualified real property interest; and
      5. Whether the donee of the qualified real property interest meets the requirements of an eligible donee.
    4. After review of the committee comments, the commission may issue a wetland and riparian zone conservation tax credit approval certificate for those applications that meet the requirements of this subchapter and the rules promulgated under this subchapter.
  2. 1. An eligible donor may apply for conditional approval of a wetland and riparian zone conservation tax credit before a qualified real property interest donation has been recorded.
    2. If conditional approval of a wetland and riparian zone conservation tax credit is granted, the application must be resubmitted to the commission after the qualified real property interest donation has been recorded for the limited purpose of demonstrating conformity with the originally submitted draft documents.
  3. 1. If the commission denies approval of a wetland and riparian zone conservation tax credit, it shall provide a brief written statement to the applicant of the reason for a decision to deny approval.
    2. When a problem identified by the commission is remedied, an eligible donor may resubmit the application for approval of the wetland and riparian zone conservation tax credit.
  4. A decision on an application for approval or conditional approval of a wetland and riparian zone conservation tax credit or on a resubmission of a conditionally approved or previously denied application shall be issued in the order in which the completed applications or resubmissions are received.
  5. For good cause shown, the Department of Finance and Administration may review and either accept or reject in whole or in part any wetland and riparian zone conservation tax credit claimed by a taxpayer and may require information from a taxpayer regarding the:
    1. Appraisal value of the qualified real property interest;
    2. Amount of the wetland and riparian zone conservation tax credit;
    3. Validity of the wetland and riparian zone conservation tax credit; and
    4. Other relevant matters.
1. 1. All projects must be completed and properly functioning within three (3) years of the date of the certificate of tax credit approval, except if the Arkansas Natural Resources Commission determines that failure to comply with this subdivision (a)(1) is the result of conditions beyond the control of the taxpayer, an additional year to comply with this subdivision (a)(1) may be granted by the commission.
  2. If the taxpayer does not complete the project within the period provided in subdivision (a)(1) of this section, all credits claimed must be repaid to the Revenue Division of the Department of Finance and Administration, and the project will be disallowed as a project for tax credit purposes.
2. 1. Project activities shall meet or exceed those standards as established by the commission, and the project must be maintained for a minimum life of ten (10) years after it is certified as being complete.
  2. 1. If the taxpayer terminates the project prior to expiration of the minimum project life, the taxpayer shall provide written notification to the commission and the division.
    2. In addition, the taxpayer shall file an amended tax return and repay the amount of tax credit claimed which was not allowable.
  3. If the commission determines that the taxpayer has terminated the project, it shall notify the division.
  4. 1. Upon the termination of the project, the taxpayer shall not be allowed any further tax credits provided in this subchapter and the division shall recapture the pro rata share of any tax credits claimed under this subchapter for the period of termination.
    2. The pro rata share for recapture of the disallowed tax credits shall be determined by dividing the period of time from termination of the project until the expiration of the minimum life of the project by the required minimum life of the project times the tax credit claimed.
    3. Notwithstanding the provisions of § 26-18-306, the division may make necessary assessments to recapture disallowed tax credits for a period of three (3) years from the date of expiration of the minimum life of the project.
1. Following the end of every calendar year, the Department of Finance and Administration shall compile the cumulative total amount of tax credits used pursuant to the provisions of this subchapter.
2. 1. The tax credits established by this subchapter and the availability of those tax credits shall expire on December 31 of the calendar year following the calendar year in which the tax credits used pursuant to the provisions of this subchapter exceed five hundred thousand dollars ($500,000).
  2. However, any taxpayer having been issued a certificate of tax credit approval on or prior to such December 31 shall be entitled to the tax credits provided under this subchapter without regard to the fact that the availability of the tax credits has otherwise expired.
1. A taxpayer owning an interest in a qualified project shall be allowed a state tax credit, to be termed the Arkansas low-income housing tax credit, if the Arkansas Development Finance Authority issues an eligibility statement for that project. For any taxpayer which is, for state income tax purposes, taxed as a partnership or an S corporation, the tax credits allocated to the taxpayer shall be allocated to each partner, member or shareholder of the taxpayer in accordance with the provisions of the articles of incorporation, bylaws, partnership agreement, operating agreement or other agreement setting forth such allocation.
2. The Arkansas low-income housing tax credit available to a qualified project shall be calculated by multiplying an amount equal to the federal low-income housing tax credit for a qualified project for a federal tax period, by twenty percent (20%) and such amount shall be subtracted from the amount of state income or premium tax otherwise due from the taxpayer for the same tax period.
3. The Arkansas low-income housing tax credit shall be taken against the state income or premium taxes due from the taxpayer. The credit authorized by this subchapter shall not be refundable. Any amount of credit that exceeds the tax due for a taxable year may be carried forward to any of the five (5) subsequent taxable years or carried forward to any of the five (5) subsequent taxable years.
4. All or any portion of the Arkansas low-income housing tax credits may be allocated to parties who are eligible under the provisions of subsection (a) of this section. An owner of a qualified project shall certify to the Secretary of the Department of Finance and Administration the amount of the Arkansas low-income housing tax credit allocated to each taxpayer.
5. In the event that recapture of Arkansas low-income housing tax credits is required pursuant to § 26-51-1703(b), any statement submitted to the secretary as provided in this section shall include the proportion of the Arkansas low-income housing tax credit required to be recaptured, the identity of each taxpayer subject to the recapture and the amount of Arkansas low-income housing tax credit previously allocated to such taxpayer.
6. The total amount of tax credit granted under this subchapter shall not exceed two hundred fifty thousand dollars ($250,000) in any taxable year.
7. 1. A grant payment made under § 1602 of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, is excluded from gross income if the grant payment is made in lieu of a federal low-income housing tax credit.
  2. The grant recipient shall comply with the requirements of this subchapter in the same manner as if the grant recipient had received a federal low-income housing tax credit.
1. The owner of a qualified project eligible for the Arkansas low-income housing tax credit shall submit, at the time of filing the owner's income or gross premium tax return, an eligibility statement. In the case of failure to attach the eligibility statement, no Arkansas low-income housing tax credit under this subchapter shall be allowed with respect to such project for that year until these copies are provided to the Department of Finance and Administration.
2. If under 26 U.S.C. § 42, as amended, a portion of any federal low-income housing tax credit taken with respect to a qualified project is required to be recaptured, the taxpayer claiming Arkansas low-income housing tax credit with respect to such project shall also be required to recapture a portion of any Arkansas low-income housing tax credit authorized by this subchapter. The state recapture amount shall be equal to the proportion of the Arkansas low-income housing tax credit claimed by the taxpayer that equals the proportion the federal recapture amount bears to the original federal low-income housing credit claimed by the taxpayer.
1. All or any portion of Arkansas low-income housing tax credit issued in accordance with the provisions of this subchapter may be transferred, sold, or assigned but only in connection with the sale or transfer of the interest in the qualified project or in the taxpayer.
2. An owner or transferee desiring to make a transfer, sale, or assignment as described in subsection (a) of this section shall submit to the Secretary of the Department of Finance and Administration a statement which describes the amount of Arkansas low-income housing tax credit for which transfer, sale, or assignment of Arkansas low-income housing tax credit is eligible. The owner shall provide to the secretary such information as is specified by the Department of Finance and Administration in rules so that the Arkansas low-income housing tax credit may be properly allocated.
3. In the event that recapture of Arkansas low-income housing tax credit is required pursuant to § 26-51-1703(b), the statements submitted to the secretary as provided in this section shall include the proportion of the Arkansas low-income housing tax credit required to be recaptured, the identity of each transferee subject to recapture, and the amount of Arkansas low-income housing tax credit previously transferred to such transferee and such other information as is specified by the department in rules.
1. There shall be allowed a deduction from net income for a qualified small business net capital gain recognized on the sale of qualified small business stock for any taxable year in an amount equal to the following:
  1. For qualified small business stock held for a period of five (5) years from the date of the purchase of the stock, fifty percent (50%);
  2. For qualified small business stock held for a period of six (6) years from the purchase of the stock, sixty percent (60%);
  3. For qualified small business stock held for a period of seven (7) years from the purchase of the stock, seventy percent (70%);
  4. For qualified small business stock held for a period of eight (8) years from the purchase of the stock, eighty percent (80%);
  5. For qualified small business stock held for a period of nine (9) years from the purchase of the stock, ninety percent (90%); and
  6. For qualified small business stock held for a period of ten (10) years from the purchase of the stock, one hundred percent (100%).
2. As used in this subchapter:
  1. “Qualified small business” means any domestic corporation whose total capitalization does not exceed one hundred million dollars ($100,000,000) and no more than ten percent (10%) of the firm's assets are held in the form of real estate during the holding periods set forth in subsection (a) of this section;
  2. “Qualified small business net capital gain” means the net capital gain for the taxable year determined by taking into account only gain or loss from sales or exchanges of qualified small business stock; and
  3. “Qualified small business stock” means stock issued directly by a qualified small business after December 31, 1998.
3. Any taxpayer who seeks to qualify for the income tax deduction set forth in this section must:
  1. Obtain a certified statement from the corporation issuing the qualified business stock stating:
    1. The name and address of the purchaser;
    2. The number of shares of qualified small business stock purchased;
    3. The amount paid by the original purchaser for the qualified small business stock; and
    4. The dates of purchase and sale of the qualified small business stock; and
  2. Attach a copy of the statement described in subdivision (c)(1) of this section to the income tax return for the year the deduction is claimed.
1. Accelerate Arkansas, a statewide group of volunteers whose mission is to foster economic growth in Arkansas by raising the average Arkansas wage to the level of the national average wage by using the essential building blocks of the knowledge-based economy to create an environment supporting entrepreneurship and continuous innovation, developed its five-point strategy to increase per capita income:
1. There shall be allowed a credit against the income tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., equal to thirty percent (30%) of the cost of tuition reimbursed or paid by an employer on behalf of a full-time, permanent employee for the cost of tuition, books, and fees for a program of undergraduate or postgraduate education from an accredited institution of postsecondary education located in Arkansas.
2. In order to qualify for the income tax credit, the employer shall document that the employee has successfully completed the course.
3. The incentive authorized by this section shall not exceed twenty-five percent (25%) of a business's income tax liability in any year.
1. A recipient of benefits under this subchapter is precluded from receiving benefits under the Arkansas Enterprise Zone Act of 1993, § 15-4-1701 et seq., for the same project.
2. A recipient of benefits under this subchapter is precluded from receiving benefits under the Economic Investment Tax Credit Act, § 26-52-701 et seq. [repealed], for the same project.
1. 1. In order to qualify for and receive the credits afforded by this subchapter, any eligible business undertaking a project shall submit a project plan to the Director of the Arkansas Economic Development Commission at least thirty (30) calendar days prior to the start of construction.
  2. The plan submitted to the Arkansas Economic Development Commission shall contain such information as may be required by the director to determine eligibility.
2. 1. Upon determination by the director that the project qualifies for credit under this subchapter, the director shall certify to the Secretary of the Department of Finance and Administration that the project is qualified and transmit with his or her certification the documents upon which the certification was based or copies.
  2. Upon receipt by the secretary of a certification from the director that an eligible business is entitled to credit under this subchapter, the secretary shall provide forms to the eligible business on which to claim the credit.
3. 1. At the end of the calendar year in which the application was made to the director and at the end of each calendar year thereafter until the project is completed, the eligible business shall certify on the form provided by the secretary the amount of expenditures on the project during the preceding calendar year.
  2. 1. Upon receipt of the form certifying expenditures, the secretary shall determine the amount due as a credit for the preceding calendar year and issue a memorandum of credit to the eligible business in the amount of seven percent (7%) of the expenditure.
    2. 1. Except as provided in § 26-51-2007, the credit shall then be applied against the eligible business' state income tax liability in the year following the year of the expenditure.
        
        However, if the credit is not used in the calendar year following the expenditure, it may be carried over to the next succeeding calendar year for a total period of six (6) years following the year in which the credit was first available for use or until the credit is exhausted, whichever occurs first.
      2. In no event shall the credit used on any regular return be more than fifty percent (50%) of the eligible business' total state income tax liability for the reporting period.
      3. The secretary may require proof of these expenditures.
      4. The secretary may examine those records necessary and specific to the project to determine credit eligibility. Any credits disallowed shall be subject to payment in full.
4. In order to receive credit for project costs, the costs must be incurred within five (5) years from the date of certification of the project plan by the director.
1. A person claiming credit under this subchapter is a “taxpayer” within the meaning of § 26-18-104 and shall be subject to all applicable provisions of § 26-18-104.
2. Administration of the provisions of this subchapter shall be under the provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq.
3. The Director of the Arkansas Economic Development Commission may promulgate such rules as are necessary to carry out the intent and purposes of this subchapter.
1. The state income tax credit provided by this subchapter shall not be claimed on any income tax return filed or required by law to be filed prior to July 1, 2003.
2. State income tax credits arising under this subchapter that but for the provisions of this section would be available to be claimed on an income tax return required to be filed before July 1, 2003, shall first be available on income tax returns due after July 1, 2003, and shall be subject to the same carryover provisions for unused credits as otherwise provided in this subchapter.
1. As used in this section, “human organ” means all or part of a human's liver, pancreas, kidney, intestine, lung, or bone marrow.
2. In computing net income, a taxpayer may deduct up to ten thousand dollars ($10,000) if, while living, the taxpayer or the taxpayer's dependent who is claimed under § 26-51-501, donates one (1) or more of his or her human organs to another human for human organ transplantation.
3. A deduction that is claimed under subsection (b) of this section may only be claimed in the taxable year in which the human organ transplantation occurs.
4. 1. A taxpayer may claim the deduction under subsection (b) of this section only one (1) time in his or her lifetime.
  2. The deduction may be claimed for only the following unreimbursed expenses that are incurred by the taxpayer and are related to the human organ donation of the taxpayer or the taxpayer's dependent:
    1. Travel expenses;
    2. Lodging expenses;
    3. Lost wages; and
    4. Medical expenses.
1. 1. There is allowed an income tax credit up to the amount of tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., or the premium tax to a holder of an Arkansas historic rehabilitation income tax credit.
  2. Beginning March 20, 2015, the income tax credit allowed under subdivision (a)(1) of this section is allowed only one (1) time in a twenty-four-month period for each eligible property.
2. The Arkansas historic rehabilitation income tax credit shall be in an amount equal to twenty-five percent (25%) of the total qualified rehabilitation expenses incurred by the owner to complete a certified rehabilitation up to the first:
  1. 1. For a project that starts on or after January 1, 2009, five hundred thousand dollars ($500,000) of qualified rehabilitation expenses on income-producing property.
    2. For a project that starts on or after July 1, 2017, one million six hundred thousand dollars ($1,600,000) of qualified rehabilitation expenses on income-producing property; or
  2. One hundred thousand dollars ($100,000) of qualified rehabilitation expenses on nonincome-producing property.
3. 1. The Division of Arkansas Heritage shall only issue Arkansas historic rehabilitation income tax credits for up to four million dollars ($4,000,000) in any one (1) fiscal year.
  2. Any unused Arkansas historic rehabilitation income tax credits shall not be carried over to the following fiscal year for use by the division.
  3. Any certification of completion that would cause the Arkansas historic rehabilitation income tax credit to exceed the amounts listed in subdivision (c)(1) of this section during the fiscal year will be carried forward for consideration during the following fiscal year.
4. The Arkansas historic rehabilitation income tax credit is available to an owner of an eligible property that:
  1. Completes a certified rehabilitation that is placed in service after January 1, 2009;
  2. Has a minimum investment of:
    1. Twenty-five thousand dollars ($25,000) in qualified rehabilitation expenses on income-producing properties; or
    2. Five thousand dollars ($5,000) in qualified rehabilitation expenses on nonincome-producing properties; and
  3. Is not receiving a tax credit under any other state law for the same eligible property.
5. Upon completion of a rehabilitation, the owner shall submit documentation required by the division to verify that the completed rehabilitation qualifies as a certified rehabilitation.
6. If the division determines that a rehabilitation qualifies as a certified rehabilitation and that the certified rehabilitation is complete, the division shall issue a freely transferable certification of completion specifying the total amount of the qualified rehabilitation expenses and Arkansas historic rehabilitation income tax credit allowed.
7. 1. If the owner requests a review of the division determination under subsection (f) of this section, the owner shall submit a written request for review of the determination.
  2. The owner shall submit the request in writing to the division within thirty (30) days of the date of notification to the owner of the determination.
8. 1. The owner shall certify to the division the validity of costs and expenses claimed as qualified rehabilitation expenses and shall maintain a record supporting the claim for at least five (5) years after the issuance of the certification of completion.
  2. An owner's record supporting a claim for qualified rehabilitation expenses may be reviewed by the division, the appropriate tax collection authority, or a holder.
1. 1. A holder shall submit the certification of completion and documents proving an assignment, if any, with the appropriate tax collection authority at the time of filing the holder's income tax return or premium tax return.
  2. The appropriate tax collection authority may refuse to recognize the Arkansas historic rehabilitation income tax credit claimed if the holder fails to submit the certification of completion and any assignment documents.
2. The amount of the Arkansas historic rehabilitation income tax credit that may be used by a holder for a taxable year may equal but shall not exceed the amount of income tax or premium tax due.
3. A holder of an unused Arkansas historic rehabilitation income tax credit may carry forward part or all of an Arkansas historic rehabilitation income tax credit for five (5) consecutive taxable years to apply against the holder's income taxes due or the holder's premium tax due.
4. 1. An owner of an Arkansas historic rehabilitation income tax credit may freely transfer, sell, or assign part or all of the Arkansas historic rehabilitation income tax credit amount identified in the certification of completion.
  2. A subsequent holder may transfer, sell, or assign part or all of the remaining Arkansas historic rehabilitation income tax credit.
5. An owner may sell the owner's eligible property after the issuance of the certification of completion.
6. An Arkansas historic rehabilitation income tax credit granted to a partnership, Subchapter S corporation, a limited liability company taxed as a partnership, or multiple owners of property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement among the partners, members, or owners documenting an alternate distribution method.
7. 1. A holder may use the Arkansas historic rehabilitation income tax credit to offset up to one hundred percent (100%) of the state income taxes due or premium tax due from the holder.
  2. A holder is not required to have any ownership or other interest in the eligible property for which an Arkansas historic rehabilitation income tax credit is claimed.
  3. An Arkansas historic rehabilitation income tax credit may be used up to its total amount by any holder without limitation and is not subject to limits imposed by federal law or regulation on the use of federal rehabilitation tax credits.
8. An owner or holder that assigns part or all of an Arkansas historic rehabilitation income tax credit shall perfect the transfer by notifying the Division of Arkansas Heritage and the appropriate tax collection authority in writing within thirty (30) calendar days following the effective date of the transfer and shall provide any information as may be required by the division and the appropriate tax collection authority to administer and carry out this subchapter and to ensure proper tracking of the ownership of the unused Arkansas historic rehabilitation income tax credit.
9. 1. Any consideration received for the transfer of the Arkansas historic rehabilitation income tax credit shall not be included as income taxable by the State of Arkansas.
  2. Any consideration paid for the transfer of the Arkansas historic rehabilitation income tax credit shall not be deducted from income taxable by the State of Arkansas.
1. 1. The Division of Arkansas Heritage may charge a fee to process:
    1. An application for an Arkansas historic rehabilitation income tax credit; and
    2. A request to record transfers of interests in an Arkansas historic rehabilitation income tax credit to other holders.
  2. The fee for processing an application for an Arkansas historic rehabilitation income tax credit shall not exceed two and five-tenths percent (2.5%) of the amount of the Arkansas historic rehabilitation income tax credit applied for or seventy-five hundredths percent (0.75%) of the amount of the Arkansas historic rehabilitation income tax credit transferred, whichever is less.
2. A fee collected under this subchapter by the division shall be considered cash funds of the division and shall be used for the administration of this subchapter.
1. The Division of Arkansas Heritage shall promulgate rules to implement this subchapter that shall include criteria for the prioritizing of the rehabilitation applications and that will stimulate the local economy where the property is located, including without limitation the criteria that the rehabilitation project will be prioritized in the following order:
  1. Result in the creation of a new business;
  2. Result in the expansion of an existing business;
  3. Establish or contribute to the establishment of a tourism attraction as defined by the Department of Parks, Heritage, and Tourism;
  4. Contribute to the revitalization of a specific business district; or
  5. Be a key property in the revitalization of a specific neighborhood.
2. The Division of Arkansas Heritage shall consult with the Department of Finance and Administration, the Arkansas Economic Development Commission, and the State Insurance Department in promulgating rules under this subchapter.
3. The Department of Parks, Heritage, and Tourism shall promulgate rules to define a “tourism attraction” as provided in subdivision (a)(3) of this section.
1. This subchapter shall be administered in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.
2. The Secretary of the Department of Finance and Administration shall make and prescribe such rules and forms as he or she deems necessary to administer this subchapter.
1. A claim center making a payment of lottery winnings on a single lottery ticket of more than five thousand dollars ($5,000) shall deduct and withhold an amount equal to seven percent (7%) of each payment of the lottery winnings.
2. The amount deducted and withheld under this section from any lottery winnings paid to a person during the income year shall be credited against the income tax liability of that person under the Income Tax Act of 1929, § 26-51-101 et seq.
1. A claim center shall register to withhold income tax under § 26-51-2304 from lottery winnings in the manner prescribed by the Secretary of the Department of Finance and Administration.
2. The withholding account used to report and remit the withholding on wages shall not be used to report withholding on lottery winnings.
3. A separate account for withholding on lottery winnings shall be obtained from the Revenue Division of the Department of Finance and Administration.
4. Each claim center shall file a monthly return and remit the income tax withheld from lottery winnings on or before the fifteenth day of the month following the month in which the income tax was withheld.
5. A claim center shall keep the following records and information for six (6) years after the date the income tax becomes due or is paid, whichever is later:
  1. The total lottery winnings paid;
  2. The amount of lottery winnings income tax withheld and remitted;
  3. The name, address, Social Security number or taxpayer identification number, and amount of lottery winnings of each person in receipt of lottery winnings; and
  4. The name, address, and taxpayer identification number of the claim center.
6. 1. A claim center shall provide two (2) copies of a statement to each person who received lottery winnings and had an amount withheld under § 26-51-2304 during the income year before January 31 following the close of the income year.
  2. Each statement shall contain the following:
    1. The name, address, and Social Security number or taxpayer identification number of the person in receipt of lottery winnings;
    2. The total amount of the lottery winnings subject to withholding that was paid by the claim center to the recipient of the lottery winnings for the income tax year;
    3. The total amount withheld from the recipient's lottery winnings by the claim center under this subchapter for the income year;
    4. The name, address, and Arkansas identification number of the claim center; and
    5. Such other information as the secretary shall require by rule.
1. 1. The Office of the Arkansas Lottery is liable for amounts required to be deducted and withheld by a claim center under this subchapter regardless of whether the amounts were in fact deducted or withheld.
  2. Any sum withheld in accordance with this subchapter is deemed to be held in trust for the State of Arkansas and shall be recorded by the claim center in a ledger account so as to clearly indicate the amount of income tax withheld and that the amount is the property of the State of Arkansas.
2. Each person that is subject to this subchapter and who is to receive a payment of lottery winnings or is entitled to any portion of the payment of lottery winnings shall furnish the claim center making the payment a statement, made under penalty of perjury, containing his or her:
  1. Name;
  2. Address; and
  3. Social Security number or taxpayer identification number.
1. To apply for a designation as a qualified project, a taxpayer shall submit to the governing body of the central business improvement district where the property to be rehabilitated or developed is located all forms and fees required by the governing body of the central business improvement district.
2. To qualify as eligible central business improvement district property, the taxpayer shall demonstrate that the property to be rehabilitated or developed meets the following requirements:
  1. The project must be planned within the physical boundaries of the central business improvement district;
  2. A full set of plans by a licensed architect must be submitted to the governing body of the central business improvement district where the property to be rehabilitated or developed is located;
  3. The project must meet all zoning and building codes of the municipality in which the property to be rehabilitated or developed is located;
  4. The project must meet the design guidelines, be compatible with the overall plan for the central business improvement district, and have a use that the governing body of the central business improvement district determines as maintaining the overall integrity of the central business improvement district;
  5. The qualified rehabilitation or development expenditures for the project must have occurred on or after the effective date of this subchapter; and
  6. The qualified rehabilitation or development expenditures for the project must be greater than thirty thousand dollars ($30,000).
3. After evaluating the information provided by the taxpayer, the governing body of the central business improvement district shall issue a determination about whether the property to be rehabilitated or developed is a qualified project.
4. 1. If the taxpayer is dissatisfied with the determination made by the governing body of the central business improvement district, the taxpayer may request that a review of that determination be made by the governing body of the municipality.
  2. 1. The request for review shall be made in writing to the governing body of the municipality within thirty (30) days from the date of the determination of the governing body of the central business improvement district under subsection (c) of this section.
    2. The decision of the governing body of the municipality is a final decision.
1. After a property to be rehabilitated or developed is designated a qualified project under § 26-51-2404 and the taxpayer completes the rehabilitation or development work, the taxpayer shall submit to the governing body of the central business improvement district where the eligible central business improvement district property is located all documentation and forms required by the governing body of the municipality and the governing body of the central business improvement district to verify that the qualified project has been completed.
2. If the governing body of the central business improvement district determines that the qualified project has been successfully completed, the governing body of the central business improvement district shall issue an eligibility certificate.
3. 1. If the taxpayer is dissatisfied with the determination made by the governing body of the central business improvement district under subsection (b) of this section, the taxpayer may request that a review of that determination be made by the governing body of the municipality.
  2. 1. The request for review shall be made in writing to the governing body of the municipality within thirty (30) days from the date of the determination of the governing body of the central business improvement district under subsection (b) of this section.
    2. The decision of the governing body of the municipality is a final decision.
4. Upon issuance of an eligibility certificate, the governing body of the central business improvement district immediately shall report in writing to the Department of Finance and Administration:
  1. The name and address of the taxpayer;
  2. The taxpayer identification number;
  3. The date of issuance of the eligibility certificate;
  4. The amount of the eligibility certificate; and
  5. Any other information as determined necessary by the department.
1. The projected qualified rehabilitation or development expenditures must occur during a period not to exceed eighteen (18) months.
2. For the rehabilitation or development of an existing structure, the projected qualified rehabilitation or development expenditures must equal or exceed the adjusted basis of the existing structure, excluding the land, before the qualified rehabilitation or development work begins.
1. There is allowed an investment tax credit against the tax imposed by the Income Tax Act of 1929, § 26-51-101 et seq., for any taxpayer incurring costs and expenses that are qualified rehabilitation or development expenditures of eligible central business improvement district property.
2. The investment tax credit is equal to twenty-five percent (25%) of qualified rehabilitation or development expenditures incurred for a qualified project up to the first:
  1. Five hundred thousand dollars ($500,000) on income-producing property; or
  2. Two hundred thousand dollars ($200,000) on nonincome-producing property.
3. 1. The investment tax credit for a qualified project covering income-producing eligible central business improvement district property shall be taken in the tax year in which the eligible central business improvement district property is placed in service.
  2. The investment tax credit for a qualified project covering residential eligible central business improvement district property or other nonincome-producing eligible central business improvement district property shall be taken in the tax year the qualified project is completed.
4. A taxpayer who receives an investment tax credit under this section shall not claim any other state or local tax credit or deduction based on the qualified rehabilitation or development expenditures except for the deduction for normal depreciation of the eligible central business improvement district property.
5. 1. The Department of Finance and Administration shall maintain an ongoing record of the eligibility certificates awarded each fiscal year.
  2. The department shall only issue investment tax credits up to one million dollars ($1,000,000) in any one (1) fiscal year on a first-come, first-served basis.
1. To claim the investment tax credit, a taxpayer shall submit the eligibility certificate issued by the governing body of the central business improvement district to the Department of Finance and Administration.
2. 1. In addition to the submission under subsection (a) of this section, the taxpayer shall submit an eligibility certificate at the time of filing the taxpayer's income tax return.
  2. If the taxpayer fails to attach the eligibility certificate to the taxpayer's income tax return, an investment tax credit is not allowed with respect to the qualified project for that tax year until the eligibility certificate is provided to the department.
1. 1. The amount of the investment tax credit that may be used by a taxpayer for a taxable year shall not exceed the amount of income tax due from the taxpayer.
  2. Any unused investment tax credit may be carried over for five (5) consecutive taxable years for credit against the state income tax due from the taxpayer.
  3. 1. The investment tax credit may be transferred, sold, or assigned only one (1) time.
    2. A taxpayer who transfers, sells, or assigns the investment tax credit shall notify in writing the Department of Finance and Administration within thirty (30) days of the following information:
      1. The name, address, and taxpayer identification number of the transferee, purchaser, or assignee of the investment tax credit;
      2. The original issuance date of the investment tax credit and the date of the transfer, purchase, or assignment of the investment tax credit; and
      3. The amount paid for the investment tax credit by the transferee, purchaser, or assignee.
    3. 1. A transferee, purchaser, or assignee of an investment tax credit is entitled for the remaining carry-forward period to the investment tax credit under this subchapter only to the extent the investment tax credit is still available and only for the portion of the investment tax credit that has not been previously claimed by the transferor, seller, or assignor.
      2. A transferee, purchaser, or assignee may not transfer, sell, or assign the investment tax credit.
    4. The department may refuse to recognize the investment tax credit if the transferor, seller, or assignor or the transferee, purchaser, or assignee of the investment tax credit fails to submit the eligibility certificate and any transfer, purchase, or assignment documents.
  4. An investment tax credit granted to a partnership, a limited liability company taxed as a partnership, or multiple owners of eligible central business improvement district property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement between or among the partners, members, or owners documenting an alternative distribution method.
2. 1. Any assignee of an investment tax credit may use an acquired investment tax credit to offset up to one hundred percent (100%) of the state income tax due from the assignee, but the offset shall not exceed the amount of income tax due for the taxable year.
  2. An assignor of an investment tax credit shall perfect an assignment to an assignee of an investment tax credit by notifying the department in writing within thirty (30) calendar days following the effective date of the assignment and shall provide any information required by the department to administer and carry out this subchapter.
1. The governing body of the central business improvement district may charge a fee of two hundred fifty dollars ($250) for the services it provides under this subchapter.
2. The fee collected under subsection (a) of this section by the governing body of the central business improvement district shall be considered cash funds of the central business improvement district and shall be used for the administration of this subchapter.
1. 1. The Secretary of the Department of Finance and Administration may make rules and prescribe forms for a taxpayer to claim the investment tax credit provided by this subchapter and for the proper enforcement of the claim.
  2. The Department of Finance and Administration shall consult with the governing bodies of the central business improvement districts in making rules under this subchapter to maintain consistency with the purpose and intent of this subchapter.
2. A fee collected under § 26-51-2404 by the governing body of the central business improvement district shall be deposited into the treasury cash fund of the governing body of a central business improvement district receiving the fee.
3. The department and the governing body of a central business improvement district may inspect facilities and records of a taxpayer requesting or receiving an investment tax credit as necessary to verify a claim.
4. The secretary shall demand the repayment of any investment tax credits taken in excess of the investment tax credit allowed by this subchapter.
1. 1. This subchapter takes effect only if the Chief Fiscal Officer of the State certifies that sufficient funding for this subchapter is available in the General Improvement Fund or its successor fund or fund accounts, including the Development and Enhancement Fund.
  2. If the Chief Fiscal Officer of the State certifies that sufficient funding for this subchapter is available in the fund, this subchapter is effective for tax years beginning on and after January 1 of the year following the certification and continues for a period of two (2) years.
  3. If the Chief Fiscal Officer of the State certifies that sufficient funding for this subchapter is available in the fund, he or she shall notify the Arkansas Code Revision Commission of the effective date of this subchapter.
2. An unused investment tax credit under this subchapter that is earned before the end of the period stated in subsection (a) of this section may be carried forward on an income tax return for up to five (5) years after the year in which the investment tax credit was first earned or until exhausted, whichever event occurs first.
1. 1. There is created the Arkansas Disaster Relief Program.
  2. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form and on all corporate income tax forms, a designation as follows:
2. The Department of Finance and Administration shall quarterly certify to the Treasurer of State the amount contributed to the program through this state income tax check-off during the quarter as authorized by this section, and the Treasurer of State shall deduct from the Individual Income Tax Withholding Fund the amount so certified.
3. The Secretary of the Department of Finance and Administration shall have the authority to promulgate all rules and all income tax forms, returns, and schedules necessary to carry out this program.
4. The secretary is authorized to accept any gifts, grants, bequests, devises, and donations made to the State of Arkansas for the purposes of funding the program. The secretary shall deposit any of these gifts, grants, bequests, devises, and donations so received into the Arkansas Disaster Relief Program Trust Fund. These gifts, grants, bequests, devises, and donations shall be used together with any other funds appropriated for funding the program provided for in this section.
5. 1. 1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State an Arkansas Disaster Relief Program Trust Fund to be used by the Division of Emergency Management for disaster relief.
    2. The Treasurer of State shall credit to the Arkansas Disaster Relief Program Trust Fund the amount certified each quarter in accordance with subsection (b) of this section.
  2. 1. The moneys credited to the Arkansas Disaster Relief Program Trust Fund shall be held as trust funds in interest-bearing accounts only.
    2. All interest earned shall be credited to the Arkansas Disaster Relief Program Trust Fund and shall be used only for the purposes of the Arkansas Disaster Relief Program Trust Fund.
  3. All funds deposited into the Arkansas Disaster Relief Program Trust Fund and all interest earned on deposits and the fund balance in the Arkansas Disaster Relief Program Trust Fund may be disbursed as appropriated in each fiscal year of the biennium for the program created by this subchapter.
6. 1. The Revenue Division of the Department of Finance and Administration may establish any rule to effectively carry out the revenue-producing provisions of this section.
  2. The secretary may promulgate rules to carry out the provisions of this section that allow the secretary to accept gifts, grants, bequests, devises, and donations.
1. 1. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form, and on all corporate income tax forms, a designation as follows:
  2. The Arkansas School for the Blind and the Arkansas School for the Deaf check-off program on state income tax returns shall be effective beginning with the returns for the 2001 income year and each income year thereafter.
  3. The Secretary of the Department of Finance and Administration may promulgate all rules and all income tax forms, returns, and schedules necessary to implement this section.
2. The Department of Finance and Administration shall quarterly certify to the Treasurer of State the amount contributed to the Arkansas School for the Blind and the Arkansas School for the Deaf through this state income tax check-off during the quarter, and the Treasurer of State shall deduct from the Individual Income Tax Withholding Fund the amount so certified.
3. The Treasurer of State shall credit fifty percent (50%) of the amount certified each quarter to the School for the Blind Fund Account and fifty percent (50%) to the School for the Deaf Fund Account.
1. This section shall be known and may be cited as the “Baby Sharon Act”.
2. There is created the Baby Sharon's Children's Catastrophic Illness Grant Program.
3. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form, and on all corporate income tax forms, a designation as follows:
4. The Secretary of the Department of Finance and Administration may:
  1. Accept any gifts, grants, bequests, devises, and donations made to the State of Arkansas for the purpose of funding the Baby Sharon's Children's Catastrophic Illness Grant Program Trust Fund; and
  2. Deposit any gifts, grants, bequests, devises, and donations so received into the Baby Sharon's Children's Catastrophic Illness Grant Program Trust Fund.
5. The Department of Finance and Administration shall quarterly certify to the Treasurer of State the amount contributed to the Baby Sharon's Children's Catastrophic Illness Grant Program Trust Fund through this state income tax check-off during the quarter as authorized by this section, and the Treasurer of State shall deduct from the Individual Income Tax Withholding Fund the amount so certified.
6. The secretary shall promulgate all rules and all income tax forms, returns, and schedules necessary to carry out the revenue-producing provisions of this section.
7. The gifts, grants, bequests, devises, and donations made under this section shall be used together with any other funds appropriated for funding the Baby Sharon's Children's Catastrophic Illness Grant Program Trust Fund.
8. 1. The Baby Sharon's Children's Catastrophic Illness Grant Program Committee shall be responsible for designating recipients of all funds established by the program and the Department of Finance and Administration shall disburse the funds to the recipients.
  2. The committee shall annually provide to the Chief Fiscal Officer of the State documentation evidencing that funds have been used in accordance with the purposes of this section.
9. 1. There is established an advisory committee to be known as the “Baby Sharon's Children's Catastrophic Illness Grant Program Committee”.
  2. The committee shall consist of five (5) members as follows:
    1. One (1) person appointed by the Speaker of the House of Representatives;
    2. One (1) person appointed by the President Pro Tempore of the Senate; and
    3. Three (3) persons appointed by the Governor.
  3. The committee members shall be:
    1. Individuals who have knowledge of children with catastrophic illnesses or injuries; and
    2. Residents of the State of Arkansas at the time of appointment and throughout their terms.
  4. 1. Except for initial appointments, the appointments to the committee shall be for a term of four (4) years.
    2. For initial appointments, the members shall draw lots to determine the length of their terms as follows:
      1. Two (2) members shall have terms of two (2) years;
      2. Two (2) members shall have terms of three (3) years; and
      3. One (1) member shall have a term of four (4) years.
  5. If a vacancy occurs during a term, the Governor shall appoint a replacement for the unexpired term.
  6. The Governor shall designate the chair.
  7. 1. The committee shall meet at times and places as the chair deems necessary, but no meetings shall be held outside the State of Arkansas.
    2. A majority of the members of the committee shall constitute a quorum for the purpose of transacting business.
    3. All action of the committee shall be by a majority vote of the full membership of the committee.
  8. The committee shall consult with the Arkansas Children's Hospital concerning grant applications related to the Baby Sharon's Children's Catastrophic Illness Grant Program.
  9. 1. Members of the committee shall serve without pay.
    2. Members of the committee shall not receive expense reimbursement under § 25-16-902.
1. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form and on all corporate income tax forms, the opportunity to allow taxpayers to voluntarily apply any amount of their tax refund for organ donor awareness education.
2. Funds collected pursuant to this section shall be credited to the Organ Donor Awareness Education Trust Fund.
3. The Secretary of the Department of Finance and Administration shall promulgate all rules and all income tax forms, returns, schedules, or other materials necessary to carry out the provisions of this section.
1. This section shall be known and may be cited as the “Military Family Relief Check-off Program”.
2. There is created the Military Family Relief Check-off Program.
3. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form, and on all corporate income tax forms, a designation as follows:
  1. If you are entitled to a refund, check if you wish to designate [ ] $1, [ ] $5, [ ] $10, [ ] $20, [ ] $________ (write in amount), or [ ] all refund due, of your tax refund for the Military Family Relief Check-off Program. Your refund will be reduced by this amount.
  2. If you owe an additional amount, check if you wish to contribute an additional [ ] $1, [ ] $5, [ ] $10, [ ] $20, [ ] $________ (write in amount) for the Military Family Relief Check-off Program. If you wish to make a contribution to the program, you must enclose a separate check for the amount of your contribution, payable to the “Military Family Relief Check-off Program.”
4. The Secretary of the Department of Finance and Administration may:
  1. Accept any gifts, grants, bequests, devises, and donations made to the State of Arkansas for the purpose of funding the Military Family Relief Check-off Program; and
  2. Deposit any gifts, grants, bequests, devises, and donations received under this section into the Military Family Relief Trust Fund.
5. The Department of Finance and Administration shall quarterly certify to the Treasurer of State the amount contributed to the Military Family Relief Trust Fund through the state income tax check-off created under this subchapter, and the Treasurer of State shall deduct from the Individual Income Tax Withholding Fund the amount certified.
6. The secretary shall promulgate rules and all income tax forms, returns, and schedules necessary to carry out the revenue-producing provisions of this section.
7. The gifts, grants, bequests, devises, and donations made under this section shall be used together with any other funds appropriated for the Military Family Relief Trust Fund.
8. The Adjutant General shall promulgate all rules necessary for implementing the grant program created under this section for the Military Family Relief Trust Fund.
9. 1. The Adjutant General or his or her designee shall use funds from the Military Family Relief Trust Fund to establish a grant program to assist the families of members of the National Guard and the reserve components of the armed forces.
  2. 1. The grant program created under this section shall assist members and families of members of the National Guard and the reserve components of the armed forces.
    2. The eligibility criteria for receiving grants under the grant program shall include, but not be limited to, the following:
      1. The need of the family;
      2. The pay grade of the member of the National Guard and reserve components of the armed forces;
      3. The difference between the member's military salary and civilian salary; or
      4. Any other factors that establish the family's financial hardship.
10. 1. The check-off for the program on state income tax returns shall be effective for tax years beginning on or after January 1, 2005.
  2. The provisions of this section allowing the secretary to accept gifts, grants, bequests, devises, and donations shall be effective on August 1, 2005.
1. 1. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form, and on all corporate income tax forms, a designation as follows:
  2. The Arkansas Association of Area Agencies on Aging check-off program on state income tax returns shall be effective beginning with the returns for the 2005 tax year and each subsequent tax year.
  3. The Secretary of the Department of Finance and Administration may promulgate rules and develop all income tax forms, returns, and schedules necessary to implement this section.
2. The department shall quarterly certify to the Treasurer of State the amount contributed to the Arkansas Association of Area Agencies on Aging through this state income tax check-off during the quarter, and the Treasurer of State shall deduct from the Individual Income Tax Withholding Fund the amount certified.
3. The Treasurer of State shall credit the amount certified each quarter to the Area Agencies on Aging Fund.
1. 1. It is the purpose of this section to provide a means by which an individual taxpayer may designate a portion or all of his or her income tax refund to be withheld and contributed for the purposes set forth in this section.
  2. It is the intent of the General Assembly that the income tax check-off program established in this section is supplemental to any funding and in no way is intended to take the place of funding that would otherwise be appropriated for this purpose.
2. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form and on all corporate income tax forms, a designation as follows:
3. The Department of Finance and Administration shall certify quarterly to the Treasurer of State the amount contributed to the program through this state income tax check-off during the quarter as authorized by this section, and the Treasurer of State shall deduct from the:
  1. Individual Income Tax Withholding Fund the amount certified by the department as contributed to the program on individual income tax forms; and
  2. Corporate Income Tax Withholding Fund the amount certified by the department as contributed to the program on corporate income tax forms.
4. The Secretary of the Department of Finance and Administration shall promulgate all rules and all income tax forms, returns, and schedules necessary to carry out the program.
1. 1. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form, a designation as follows:
  2. The Arkansas Tax-Deferred Tuition Savings Program account must already be in existence at the time the election in subdivision (a)(1) of this section is made, and the pertinent information regarding the Arkansas Tax-Deferred Tuition Savings Program account must be provided to the Department of Finance and Administration so that the deposit can be correctly made.
2. The Arkansas Tax-Deferred Tuition Savings Program check-off program on state income tax returns shall be effective beginning with the returns for the 2009 tax year and each subsequent tax year.
3. The Secretary of the Department of Finance and Administration shall promulgate rules and develop all income tax forms, returns, and schedules necessary to implement this section.
1. 1. It is the purpose of this section to provide a means by which an individual taxpayer may designate a portion or all of his or her income tax refund to be withheld and contributed for the purposes stated in this section.
  2. It is the intent of the General Assembly that the income tax check-off program established in this section be supplemental to any funding that would otherwise be appropriated for the purposes stated in this section.
2. The Revenue Division of the Department of Finance and Administration shall include on the Arkansas individual income tax forms, including those forms on which a husband and wife file separately on the same form and on all corporate income tax forms, a designation as follows:
3. The Department of Finance and Administration shall certify quarterly to the Treasurer of State the amount contributed to the program through this state income tax check-off during the quarter as authorized by this section, and the Treasurer of State shall deduct from the:
  1. Individual Income Tax Withholding Fund the amount certified by the department as contributed to the program on individual income tax forms; and
  2. Corporate Income Tax Withholding Fund the amount certified by the department as contributed to the program on corporate income tax forms.
4. The Secretary of the Department of Finance and Administration may promulgate rules necessary to carry out the program established under this section.
1. 1. There is allowed an income tax credit up to the amount of tax imposed by this chapter or the premium tax to a holder of an Arkansas major historic rehabilitation income tax credit.
  2. The income tax credit allowed under subdivision (a)(1) of this section is allowed only one (1) time in a two-year period for each eligible property.
2. The Arkansas major historic rehabilitation income tax credit shall be in an amount equal to twenty-five percent (25%) of the total qualified rehabilitation expenses incurred by the owner to complete a certified rehabilitation.
3. 1. The Division of Arkansas Heritage shall not issue Arkansas major historic rehabilitation income tax credits for more than the amount certified under § 19-5-1150(c)(1)(A).
  2. Any unused Arkansas major historic rehabilitation income tax credits shall not be carried over to the following fiscal year for use by the division.
  3. Any certification of completion that would cause the Arkansas major historic rehabilitation income tax credit to exceed the amounts listed in subdivision (c)(1) of this section during the fiscal year shall be carried forward for consideration during the following fiscal year.
4. The Arkansas major historic rehabilitation income tax credit shall be available to an owner of an eligible property that:
  1. Completes a certified rehabilitation that is placed in service after January 1, 2019;
  2. Has a minimum investment of one million five hundred thousand dollars ($1,500,000) in qualified rehabilitation expenses; and
  3. Is not receiving a tax credit under any other state law for the same eligible property.
5. Upon completion of a rehabilitation, the owner shall submit documentation required by the division to verify that the completed rehabilitation qualifies as a certified rehabilitation.
6. If the division determines that a rehabilitation qualifies as a certified rehabilitation and that the certified rehabilitation is complete, the division shall issue a freely transferable certification of completion specifying the total amount of the qualified rehabilitation expenses and Arkansas major historic rehabilitation income tax credit allowed.
7. 1. If the owner requests a review of the division's determination under subsection (f) of this section, the owner shall submit a written request for review of the determination.
  2. The owner shall submit the request in writing to the division within thirty (30) days of the date of notification to the owner of the determination.
8. 1. The owner shall certify to the division the validity of the costs and expenses claimed as qualified rehabilitation expenses and shall maintain a record supporting the claim for at least five (5) years after the issuance of the certification of completion.
  2. An owner's record supporting a claim for qualified rehabilitation expenses may be reviewed by the division, the appropriate tax collection authority, or a holder.
1. 1. A holder shall submit the certification of completion and documents proving an assignment, if any, with the appropriate tax collection authority at the time of filing the holder's income tax return or premium tax return.
  2. The appropriate tax collection authority may refuse to recognize the Arkansas major historic rehabilitation income tax credit claimed if the holder fails to submit the certification of completion and any assignment documents.
2. The amount of the Arkansas major historic rehabilitation income tax credit that may be used by a holder for a taxable year may equal but shall not exceed the amount of income tax or premium tax due.
3. A holder of an unused Arkansas major historic rehabilitation income tax credit may carry forward part or all of an Arkansas major historic rehabilitation income tax credit for five (5) consecutive taxable years to apply against the holder's income taxes due or the holder's premium tax due.
4. 1. An owner of an Arkansas major historic rehabilitation income tax credit may freely transfer, sell, or assign part or all of the Arkansas major historic rehabilitation income tax credit amount identified in the certification of completion.
  2. A subsequent holder may transfer, sell, or assign part or all of the remaining Arkansas major historic rehabilitation income tax credit.
5. An owner may sell the owner's eligible property after the issuance of the certification of completion.
6. An Arkansas major historic rehabilitation income tax credit granted to a partnership, Subchapter S corporation, a limited liability company taxed as a partnership, or multiple owners of property shall be passed through to the partners, members, or owners respectively on a pro rata basis or pursuant to an executed agreement among the partners, members, or owners documenting an alternate distribution method.
7. 1. A holder may use the Arkansas major historic rehabilitation income tax credit to offset up to one hundred percent (100%) of the state income taxes due or premium tax due from the holder.
  2. A holder is not required to have any ownership or other interest in the eligible property for which an Arkansas major historic rehabilitation income tax credit is claimed.
  3. An Arkansas major historic rehabilitation income tax credit may be used up to its total amount by any holder without limitation and is not subject to limits imposed by federal law or regulation on the use of federal rehabilitation tax credits.
8. An owner or holder that assigns part or all of an Arkansas major historic rehabilitation income tax credit shall perfect the transfer by notifying the Division of Arkansas Heritage and the appropriate tax collection authority in writing within thirty (30) calendar days following the effective date of the transfer and shall provide any information as may be required by the division and the appropriate tax collection authority to administer and carry out this subchapter and to ensure proper tracking of the ownership of the unused Arkansas major historic rehabilitation income tax credit.
9. 1. Any consideration received for the transfer of an Arkansas major historic rehabilitation income tax credit shall not be included as income taxable by the State of Arkansas.
  2. Any consideration paid for the transfer of an Arkansas major historic rehabilitation income tax credit shall not be deducted from income taxable by the State of Arkansas.
1. 1. The Division of Arkansas Heritage may charge a fee to process:
    1. An application for an Arkansas major historic rehabilitation income tax credit; and
    2. A request to record transfers of interests in an Arkansas major historic rehabilitation income tax credit to other holders.
  2. The fee for processing an application for an Arkansas historic rehabilitation income tax credit shall not exceed the lesser of one percent (1%) of the amount of the Arkansas major historic rehabilitation income tax credit applied for or seventy-five hundredths percent (0.75%) of the amount of the Arkansas major historic rehabilitation income tax credit transferred.
2. A fee collected under this subchapter by the division shall be considered cash funds of the division and shall be used for the administration of this subchapter.
1. The Division of Arkansas Heritage shall promulgate rules to implement this subchapter that shall include criteria for the prioritizing of the rehabilitation applications and that will stimulate the local economy where the property is located, including without limitation the criteria that the rehabilitation project will be prioritized in the following order:
  1. Result in the creation of a new business;
  2. Result in the expansion of an existing business;
  3. Establish or contribute to the establishment of a tourism attraction as defined by the Department of Parks, Heritage, and Tourism;
  4. Contribute to the revitalization of a specific business district; or
  5. Be a key property in the revitalization of a specific neighborhood.
2. The Division of Arkansas Heritage shall consult with the Department of Finance and Administration, the Arkansas Economic Development Commission, and the State Insurance Department in promulgating rules under this subchapter.
3. The Department of Parks, Heritage, and Tourism shall promulgate rules to define a “tourism attraction” as provided in subdivision (a)(3) of this section.
1. The Division of Arkansas Heritage shall accept applications for Arkansas major historic rehabilitation income tax credits under this subchapter beginning July 1, 2020, and ending June 30, 2025.
2. An Arkansas major historic rehabilitation income tax credit approved under an application that was submitted on or before June 30, 2025, may be claimed until it is exhausted or it expires.
1. The administration of this chapter is vested in and shall be exercised by the Secretary of the Department of Finance and Administration.
2. The secretary shall promulgate rules and prescribe forms for the proper enforcement of this chapter.
1. The administration cost of this chapter shall not exceed three percent (3%) of the actual revenues collected.
2. If any funds appropriated for the administration of this chapter shall remain in the hands of the Secretary of the Department of Finance and Administration at the end of each fiscal year that shall not have been actually used in the administration of this chapter, then the funds shall be remitted by the secretary to the Treasurer of State for distribution in the same manner and for the same purposes provided for in § 26-52-107.
1. A remote seller or a marketplace facilitator that sells or facilitates the sale of tangible personal property, taxable services, a digital code, or specified digital products for delivery into Arkansas shall collect and remit the applicable sales tax levied under this chapter or the applicable compensating use tax levied under the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., if in the previous calendar year or in the current calendar year, the remote seller or the marketplace facilitator had aggregate sales of tangible personal property, taxable services, digital codes, or specified digital products subject to Arkansas sales or use tax within this state or delivered to locations within this state exceeding:
  1. One hundred thousand dollars ($100,000); or
  2. Two hundred (200) transactions.
2. A sale made through a marketplace facilitator:
  1. Is a sale of the marketplace facilitator for purposes of determining whether a person satisfies the criteria stated in subsection (a) of this section; and
  2. Is not a sale of the marketplace seller for purposes of determining whether a person satisfies the criteria stated in subsection (a) of this section.
3. The requirement to collect and remit sales or use tax under this section shall not be applied retroactively.
4. This section does not affect or impair the:
  1. Obligation of a purchaser in this state to remit use tax on any applicable transaction in which the seller does not collect and remit sales or use tax;
  2. Obligation of a seller, when the seller is transacting business in the state and a point-of-sale tax is collected on the transaction, to remit all state and local taxes on any applicable transaction in which the seller provides goods or furnishes services within the state; or
  3. Ability of a state entity to immediately collect the taxes described in subdivision (d)(2) of this section.
5. 1. The Department of Finance and Administration shall audit a marketplace facilitator solely for sales made by marketplace sellers and facilitated by the marketplace facilitator.
  2. The department shall not audit marketplace sellers for sales facilitated by a marketplace facilitator except to the extent the marketplace facilitator seeks relief from liability under subsection (f) of this section.
6. 1. A marketplace facilitator is relieved of liability under this section for failure to collect and remit the correct amount of tax under this section to the extent that the failure was due to incorrect or insufficient information given to the marketplace facilitator by the marketplace seller.
  2. This subsection does not apply if the marketplace facilitator and the marketplace seller are related.
1. It shall be unlawful for any taxpayer to transact business within this state prior to issuance and receipt of an Arkansas gross receipts tax permit from the Secretary of the Department of Finance and Administration.
2. A separate permit for each business location must be obtained from the secretary.
3. This permit shall be in addition to all other permits required by this Code.
4. Any taxpayer who engages in business without a permit, or after a permit has been suspended, shall be subject to the provisions and sanctions set forth in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
5. The secretary is authorized to establish types and classifications of Arkansas gross receipts tax permits, including without limitation special permits for taxpayers whose principal line of business does not include the retail selling of tangible personal property, specified digital products, or a digital code or the performing of taxable services.
1. Every taxpayer shall file with the Secretary of the Department of Finance and Administration an application for a gross receipts tax permit to conduct the taxpayer's business, setting forth such information as the secretary may require.
2. 1. The application shall be signed by the owner of the business as a natural person or in the case of a corporation by a legally constituted officer of the corporation.
  2. However, a seller that registers electronically shall not be required to provide a written signature.
3. A taxpayer is permitted to file an application through an agent if the registration is filed with the secretary and is made in writing.
1. The Secretary of the Department of Finance and Administration shall require prior to the issuance of any new Arkansas gross receipts tax permit the payment of a nonrefundable fee of fifty dollars ($50.00), which shall be remitted with each new application for a permit.
2. All persons doing a retail business in this state, which business is subject to the provisions of this chapter, who do not have a permanent domicile in this state, shall make a sufficient cash deposit or sufficient bond with the secretary to cover their annual sales tax before doing business in this state or before receiving a permit to do business in this state as provided in § 26-52-201.
3. All revenues derived from the fees imposed by this section shall be deposited into the State Treasury as nonrevenue receipts credited to the State Central Services Fund for use by the Revenue Division of the Department of Finance and Administration.
1. 1. Any taxpayer operating under a permit as provided in this subchapter, upon discontinuance of business by sale or otherwise, shall return the permit to the Secretary of the Department of Finance and Administration for cancellation together with a remittance of any unpaid or accrued taxes.
  2. Failure to surrender a permit and pay any and all accrued taxes shall be sufficient cause for the secretary to refuse the issuance of any permit in the future to the taxpayer to engage in or transact any other business in this state.
  3. In the case of a sale of any business, the tax shall be deemed to be due at the time of the sale of the fixtures and equipment incident to the business and shall constitute a lien against the stock and the fixtures and equipment in the hands of the purchaser thereof or any other third party until the tax is paid.
2. The secretary shall not issue a permit to continue or conduct the business to the purchaser of the business until all tax claims due in the State of Arkansas under this section have been settled and paid.
1. 1. 1. The gross receipts tax permit of any taxpayer shall automatically expire when the taxpayer has filed twelve (12) consecutive monthly reports reporting zero (0) sales.
    2. 1. The Secretary of the Department of Finance and Administration shall notify the taxpayer in writing that the gross receipts tax permit has expired.
      2. Within thirty (30) days after the date of the notice, the taxpayer shall return the permit to the secretary.
  2. This section does not apply to a permit that is issued under § 26-52-201(e) to a taxpayer whose principal line of business does not include the retail selling of tangible personal property, specified digital products, or a digital code or the performing of taxable services.
2. 1. Any taxpayer who has been notified that his or her gross receipts tax permit will expire may petition the secretary to retain the taxpayer's gross receipts tax permit if the taxpayer reasonably expects to engage in business within the twelve-month period immediately following the notification.
  2. The secretary may allow a taxpayer to retain the taxpayer's gross receipts tax permit if the taxpayer demonstrates to the secretary's satisfaction that the taxpayer will require a gross receipts tax permit within the following twelve (12) months to engage in business.
1. 1. In addition to the excise tax levied upon the gross proceeds or gross receipts derived from all sales by this chapter, except for food and food ingredients that are taxed under § 26-52-317, there is levied an excise tax of one percent (1%) upon all taxable sales of property, specified digital products, digital codes, and services subject to the tax levied in this chapter.
  2. This tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas gross receipts taxes.
  3. In computing gross receipts or gross proceeds as defined in § 26-52-103, a deduction shall be allowed for bad debts resulting from the sale of tangible personal property.
2. 1. In addition to the excise tax levied upon the gross proceeds or gross receipts derived from all sales by this chapter, except for food and food ingredients that are taxed under § 26-52-317, there is hereby levied an excise tax of one-half of one percent (0.5%) upon all taxable sales of property, specified digital products, digital codes, and services subject to the tax levied in this chapter.
  2. This tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas gross receipts taxes.
  3. However, in computing gross receipts or gross proceeds as defined in § 26-52-103, a deduction shall be allowed for bad debts resulting from the sale of tangible personal property.
3. 1. Except for food and food ingredients that are taxed under § 26-52-317, there is levied an additional excise tax of one-half of one percent (0.5%) upon all taxable sales of property, specified digital products, digital codes, and services subject to the tax levied by this chapter.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by this chapter, for the collection, reporting, and payment of Arkansas gross receipts taxes.
4. 1. Except for food and food ingredients that are taxed under § 26-52-317, there is levied an additional excise tax of seven-eighths of one percent (0.875%) upon all taxable sales of property, specified digital products, digital codes, and services subject to the tax levied by this chapter.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as prescribed by this chapter, for the collection, reporting, and payment of Arkansas gross receipts taxes.
1. The rate of tax shall be one percent (1%) above the state sales tax rate as levied by the General Assembly, by initiatives enacted by the people of the State of Arkansas, and by amendments to the Arkansas Constitution if:
  1. An Arkansas city or incorporated town is divided by a state line from an incorporated city or town in an adjoining state;
  2. The city or town in the adjoining state is of greater population than the Arkansas city or town;
  3. A tax imposed in the adjoining state is in the nature of a selective sales tax or limited to specific items as a special excise tax; and
  4. The border city has voted to levy an additional one-percent gross receipts tax in the city in lieu of paying state income taxes by individuals who are residents of the city as authorized by § 26-52-601 et seq.
2. With respect to a motor vehicle sold in any such city or incorporated town, the exemption authorized in this section shall be applicable only to a motor vehicle sold to and registered by a bona fide resident of such an Arkansas city or incorporated town and shall not be applicable to a motor vehicle sold to a nonresident.
3. 1. The Secretary of the Department of Finance and Administration shall require any person claiming this exemption to file a sworn statement in writing that the person is a resident of that city or incorporated town and such other information as the secretary may determine is necessary to establish the residence of the person.
  2. Upon conviction, a person filing a false statement or otherwise falsely obtaining or assisting another person to falsely obtain the benefits of the exemption authorized in this section is guilty of a violation and shall be fined in a sum of not less than one hundred dollars ($100) nor more than five hundred dollars ($500).
1. The excise tax levied by this chapter and by any act supplemental thereto, is levied on gross receipts or gross proceeds received from the following:
  1. 1. Sales of computer software, including prewritten computer software, which shall be taxed as sales of tangible personal property.
    2. As used in this section:
      1. “Computer” means an electronic device that accepts information in digital or similar form and manipulates it for a result based on a sequence of instructions;
      2. “Computer software” means a set of coded instructions designed to cause a computer or automatic data processing equipment to perform a task.
        
        “Computer software” does not include software that is delivered electronically or by load and leave;
      3. “Computer software maintenance contract” means a contract that obligates a vendor of computer software to provide a customer with future updates or upgrades to computer software or support services with respect to computer software, or both;
      4. “Delivered electronically” means delivered to the purchaser by means other than tangible storage media;
      5. “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities;
      6. “Load and leave” means delivery to the purchaser by use of a tangible storage media in which the tangible storage media is not physically transferred to the purchaser; and
      7. “Prewritten computer software” means computer software, including prewritten upgrades, that is not designed and developed by the author or other creator to the specifications of a specific purchaser; and
  2. Service of repairing or maintaining computer equipment or hardware in any form.
2. The gross receipts or gross proceeds derived from the sale of a computer software maintenance contract are not taxable.
1. 1. Sales of services, specified digital products, digital codes, and tangible personal property, including materials, supplies, and equipment, made to contractors who use them in the performance of a contract are declared to be sales to consumers or users and not sales for resale.
  2. Subsequent transfers of title or possession of the property used in the performance of a contract by contractors are not subject to the tax imposed by this chapter.
2. Provided that, if the performance of a contract or any portion thereof by a contractor constitutes the performance of a taxable service under the terms of § 26-52-301(3), then the entire gross proceeds or gross receipts derived from the performance of the taxable services, including the sale or transfer of title or possession of any materials or supplies used or consumed in performing the taxable services shall be subject to the tax imposed by this chapter.
3. Contractors shall be entitled to receive a gross receipts tax credit, tax offset, or refund for any gross receipts tax or use tax paid on materials or supplies used or consumed by them which become a part of real estate in performing taxable services.
1. Every person engaged in the business of owning, operating, or leasing coin-operated pinball machines, coin-operated music machines, coin-operated mechanical games, and all other similar devices, shall:
  1. Obtain and hold a permit as provided by this chapter; and
  2. Make a monthly report and remittance of gross receipts tax of three percent (3%) of the gross receipts or gross proceeds derived from the operation or use of coin-operated pinball machines, coin-operated music machines, coin-operated mechanical games, and similar devices.
2. 1. The provisions of this section shall be cumulative to the provisions of this chapter.
  2. The purpose of this section is that the gross receipts tax levied by this chapter shall apply to gross receipts or gross proceeds derived from the operation or use of coin-operated pin-ball machines, coin-operated music machines, coin-operated mechanical games, and all other similar devices.
1. 1. A taxpayer is allowed a deduction from taxable sales for a bad debt.
  2. Any deduction taken under this section that is attributed to a bad debt shall not include interest.
2. The federal definition of “bad debt” in 26 U.S.C. § 166, as in effect on January 1, 2007, is the basis for calculating a bad debt deduction under this section except that the amount calculated pursuant to 26 U.S.C. § 166 shall be adjusted to exclude:
  1. A financing charge or interest;
  2. A sales or use tax charged on the purchase price;
  3. An uncollectible amount on property that remains in the possession of the taxpayer or seller, until the full purchase price is paid; and
  4. An expense incurred in attempting to collect any debt or repossessed property.
3. 1. A bad debt may be deducted on the sales and use tax return of a taxpayer for the tax period during which:
    1. The bad debt is written off as uncollectible in the taxpayer's books and records; and
    2. The taxpayer is eligible to deduct the bad debt for federal income tax purposes if the taxpayer or seller kept accounts on a cash basis or could be eligible to be claimed if the taxpayer or seller kept accounts on an accrual basis.
  2. For purposes of this subsection, a taxpayer who is not required to file a federal income tax return may deduct a bad debt on a sales and use tax return filed for the period in which the bad debt is written off as uncollectible in the taxpayer's books and records if the taxpayer would be eligible for a bad debt deduction for federal income tax purposes if the taxpayer were required to file a federal income tax return.
4. If a bad debt deduction under this section is taken for a bad debt and the debt is subsequently collected in whole or in part, the tax imposed by this chapter on the amount collected shall be paid and reported on the sales and use tax return filed for the tax period in which the collection is made.
5. 1. If the amount of bad debt exceeds the amount of taxable sales for the tax period during which the bad debt is written off, the taxpayer may file a claim for a refund.
  2. The refund claim shall be filed within three (3) years from the due date of the sales and use tax return on which the bad debt could first be claimed.
6. 1. If filing responsibilities have been assumed by a certified service provider, the certified service provider may claim, on behalf of the taxpayer, any bad debt deduction provided by this section.
  2. The certified service provider shall credit or refund the full amount of any bad debt deduction or refund received to the taxpayer.
7. For the purposes of reporting a payment received on a previously claimed bad debt, any payment made on a debt or account is applied first proportionally to the taxable price of the tangible personal property or service and the sales tax on the tangible personal property or service and second to interest, service charges, and any other charges.
8. If the books and records of a taxpayer claiming a bad debt deduction under this section support an allocation of the bad debt among the states which are members of the Streamlined Sales and Use Tax Agreement, the allocation is permitted.
9. Except as provided in subsection (f) of this section, the only party entitled to a bad debt deduction or refund pursuant to this section is the taxpayer that originally reported and remitted the tax in question.
1. Sales of a prepaid calling service or a prepaid wireless calling service and the recharge of a prepaid calling service or a prepaid wireless calling service shall be subject to the Arkansas gross receipts tax levied by this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. As used in this subchapter:
  1. “Prepaid calling service” means the right to exclusively access a telecommunication service, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed and that is sold in predetermined units or dollars of which the number declines with use in a known amount;
  2. “Prepaid telephone calling card” or “prepaid authorization number” means the exclusive purchase of telephone or telecommunications services, paid for in advance, which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed;
  3. “Prepaid wireless calling service” means a telecommunication service that provides the right to utilize a mobile wireless service as well as other nontelecommunications services, including the download of a digital product delivered electronically and content and ancillary services, which must be paid for in advance and sold in predetermined units or dollars of which the number declines with use in a known amount; and
  4. “Recharge” means the purchase of additional telephone or telecommunication services for a previously purchased prepaid calling service or prepaid wireless calling service.
3. 1. A sale of a prepaid calling service or a prepaid wireless calling service or the recharge of a prepaid calling service or a prepaid wireless calling service is subject to gross receipts tax at the point of sale by the retail vendor.
  2. If the sale or recharge of a prepaid calling service or a prepaid wireless calling service does not take place at the retail vendor's place of business, it shall be sourced in accordance with § 26-52-521(b).
4. The gross receipts tax levied by this section on the sale of a prepaid calling service or a prepaid wireless calling service and the recharge of a prepaid calling service or a prepaid wireless calling service shall be due on all such sales occurring on or after July 1, 1999.
5. The Secretary of the Department of Finance and Administration shall promulgate rules to implement this section.
1. The gross receipts or gross proceeds derived from the sale of the following are subject to the gross receipts tax levied by this chapter:
  1. Any intrastate, interstate, and international telecommunications service that is sourced in this state in accordance with subsection (d) of this section;
  2. Any ancillary service; and
  3. Any installation, maintenance, or repair service of telecommunication equipment.
2. The following services shall not be taxable under this section:
  1. Any interstate or international private communications service;
  2. Any interstate or international 800 service or 900 service; or
  3. 1. Any prepaid calling service or prepaid wireless calling service.
    2. However, prepaid calling service and prepaid wireless calling service are taxed under § 26-52-314.
3. 1. 1. The Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252, is adopted in its entirety.
    2. All charges for mobile telecommunications services are deemed to be provided by the customer's home service provider and sourced to the customer's place of primary use and are subject to gross receipts tax based upon the customer's place of primary use as determined by the Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252.
  2. 1. 1. Any customer who alleges that an amount of tax, charge, or fee or that the assignment of the place of primary use or taxing jurisdiction included on a billing is erroneous shall notify the home service provider in writing.
      2. The customer must include the street address for the customer's place of primary use, the account name and number for which the correction of tax assignment is sought, a description of the alleged error, and any other information requested by the home service provider necessary to process the request.
    2. 1. The home service provider shall conduct a review of its records and the electronic database or enhanced zip code used to determine the place of primary use within sixty (60) days of receiving the notice from its customer.
      2. If it is determined that the amount of the tax, charge, or fee or that the assignment of the place of primary use or taxing jurisdiction is in error, the home service provider shall correct the error and refund or credit the amount of tax, charge, or fee erroneously collected from the customer for a period of up to three (3) years.
      3. If it is determined that the amount of the tax, charge, or fee or assignment of the place of primary use or taxing jurisdiction is correct, the home service provider shall provide a written explanation to the customer.
    3. A customer seeking correction of assignment of place of primary use or taxing jurisdiction or a refund or credit of taxes, charges, or fees erroneously collected by the home service provider must seek to have the error corrected under subdivision (c)(2)(A) of this section before any cause of action arises as a result of the error.
  3. 1. Charges for nontaxable services that are aggregated with other charges for communications services that are taxable and are not separately stated on the bill or invoice shall not be subject to the gross receipts tax if the seller can reasonably identify the nontaxable charges on the seller's books and records kept in the regular course of business.
    2. If the nontaxable charges cannot reasonably be identified, the gross receipts from the sales of both taxable and nontaxable communications services billed on a combined basis shall be attributed to the taxable communications services.
    3. The burden of proving nontaxable receipts or charges is on the seller of the communications services.
4. 1. Except for the telecommunications services in subdivision (d)(3) of this section, the sale of telecommunications services sold on a call-by-call basis shall be sourced to:
    1. Each state, county, or city jurisdiction where the call originates and terminates in that jurisdiction; or
    2. Each state, county, or city where the call either originates or terminates and in which the service address is also located.
  2. Except for the telecommunications services in subdivision (d)(3) of this section, a sale of telecommunications services sold on a basis other than a call-by-call basis is sourced to the customer's place of primary use.
  3. The sale of the following telecommunication services shall be sourced to each state, county, or city as follows:
    1. A sale of mobile telecommunications services other than air-to-ground radiotelephone service and prepaid calling service is sourced to the customer's place of primary use as required by the Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252;
    2. A sale of postpaid calling service is sourced to the origination point of the telecommunications signal as first identified by either:
      1. The seller's telecommunications system; or
      2. Information received by the seller from its service provider if the system used to transport the signals is not that of the seller;
    3. 1. A sale of prepaid calling service or a sale of a prepaid wireless calling service is sourced in accordance with § 26-52-521(b).
      2. Except for a sale of prepaid wireless calling service that is a prepaid telecommunications service, the rule provided in § 26-52-521(b)(5) shall include as an option the location associated with the mobile telephone number; or
    4. A sale of a private communication service is sourced as follows:
      1. Service for a separate charge related to a customer channel termination point is sourced to each state, county, or city in which the customer channel termination point is located;
      2. Service where all customer termination points are located entirely within one (1) jurisdiction or levels of jurisdiction is sourced in the state, county, and city in which the customer channel termination points are located;
      3. Service for segments of a channel between two (2) customer channel termination points located in different jurisdictions and which segments of a channel are separately charged is sourced fifty percent (50%) in each state, county, and city in which the customer channel termination points are located; or
      4. Service for segments of a channel located in more than one (1) jurisdiction or levels of jurisdiction and which segments are not separately billed is sourced in each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in the jurisdiction by the total number of customer channel termination points.
  4. The sale of an ancillary service is sourced to the customer's place of primary use.
5. As used in this section:
  1. “Air-to-ground radiotelephone service” means a radio service, as that term is defined in 47 C.F.R. § 22.99, as in effect on January 1, 2007, in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft;
  2. 1. “Ancillary service” means a service that is associated with or incidental to the provision of a telecommunications service, including without limitation detailed telecommunications billing, directory assistance, vertical service, and voice mail services.
    2. “Ancillary service” does not include specified digital products or a digital code;
  3. “Call-by-call basis” means any method of charging for a telecommunications service when the price is measured by individual calls;
  4. “Communications channel” means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points;
  5. 1. “Customer” means the person or entity that contracts with the seller of a telecommunications service.
    2. If the end user of a telecommunications service is not the contracting party, the end user of the telecommunications service is the customer of the telecommunications service, but this subdivision (e)(5)(B) only applies for the purpose of sourcing sales of a telecommunications service under subsection (d) of this section.
    3. “Customer” does not include a reseller of telecommunications service or for mobile telecommunications service of a serving carrier under an agreement to serve the customer outside the home service provider's licensed service area;
  6. “Customer channel termination point” means the location where the customer either inputs or receives the communications;
  7. 1. “End user” means the person who utilizes the telecommunications service.
    2. In the case of an entity, “end user” means the individual who utilizes the telecommunications service on behalf of the entity;
  8. “Home service provider” means the same as that term is defined in the Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252;
  9. 1. “International” means a telecommunications service that originates or terminates in the United States and terminates or originates outside the United States, respectively.
    2. United States includes the District of Columbia or a United States territory or possession;
  10. “Interstate” means a telecommunications service that originates in one (1) United States state or a United States territory or possession and terminates in a different United States state or a United States territory or possession;
  11. “Intrastate” means a telecommunications service that originates in one (1) United States state or a United States territory or possession and terminates in the same United States state or a United States territory or possession;
  12. “Mobile telecommunications service” means the same as that term is defined in the Mobile Telecommunications Sourcing Act, Pub. L. No. 106-252;
  13. 1. “Place of primary use” means the street address representative of where the customer's use of the telecommunications service primarily occurs, which must be the residential street address or the primary business street address of the customer.
    2. In the case of a mobile telecommunications service, “place of primary use” must be within the licensed service area of the home service provider;
  14. 1. “Postpaid calling service” means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card or by charge made to which a telephone number which is not associated with the origination or termination of the telecommunications service.
    2. “Postpaid calling service” includes a telecommunications service, except a prepaid wireless calling service, that would be a prepaid calling service except it is not exclusively a telecommunications service;
  15. “Prepaid calling service” means the right to access exclusively telecommunications services, which must be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount;
  16. “Prepaid wireless calling service” means a telecommunications service that provides the right to utilize mobile wireless service as well as other nontelecommunications services, including the downloading of digital products delivered electronically, content, and ancillary services that must be paid for in advance and that is sold in predetermined units or dollars of which the number declines with use in a known amount;
  17. “Private communication service” means a telecommunications service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points regardless of the manner in which the channel or channels are connected and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of the channel or channels;
  18. 1. “Service address” means the location of the telecommunications equipment to which a customer's call is charged and from which the call originates or terminates regardless of where the call is billed or paid.
    2. If the location in subdivision (e)(18)(A) of this section is not known, “service address” means the origination point of the signal of the telecommunications service first identified by either the seller's telecommunications system or in information received by the seller from its service provider if the system used to transport the signals is not that of the seller.
    3. If the location in subdivisions (e)(18)(A) and (B) of this section is not known, “service address” means the location of the customer's place of primary use;
  19. 1. “Telecommunications service” means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point or between or among points.
    2. “Telecommunications service” includes the transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether the service is referred to as voice over internet protocol services or is classified by the Federal Communications Commission as enhanced or value added.
    3. “Telecommunications service” does not include:
      1. Data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser when the purchaser's primary purpose for the underlying transaction is the processed data or information;
      2. Installation or maintenance of wiring or equipment on a customer's premises;
      3. Tangible personal property;
      4. Advertising, including without limitation directory advertising;
      5. Billing and collection services provided to third parties;
      6. Internet access service;
      7. Radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, and routing of the services by the programming service provider.
        
        Radio and television audio and video programming services, including without limitation cable service as defined in 47 U.S.C. § 522(6), as in effect on January 1, 2007, and audio and video programming services delivered by commercial mobile radio service providers, as defined in 47 C.F.R. § 20.3, as in effect on January 1, 2007;
      8. Ancillary services;
      9. A digital product delivered electronically, including without limitation software, music, video, reading material, or a ring tone;
      10. Specified digital products; or
      11. A digital code;
  20. “800 service” means a telecommunications service that allows a caller to dial a toll-free number without incurring a charge for the call; and
  21. 1. “900 service” means an inbound toll telecommunications service purchased by a subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded announcement or live service.
    2. “900 service” does not include:
      1. The charge for collection services provided by the seller of the telecommunications service to the subscriber; or
      2. A service or product sold by the subscriber to the subscriber's customer.
6. The Department of Finance and Administration shall promulgate rules to implement this section.
1. The gross proceeds or gross receipts derived from the following services are subject to this chapter:
  1. Wrecker and towing services;
  2. Collection and disposal of solid wastes;
  3. The cleaning of parking lots and gutters;
  4. Dry cleaning and laundry services;
  5. Industrial laundry services;
  6. Body piercing, tattooing, and electrolysis services;
  7. Pest control services;
  8. Security and alarm monitoring services;
  9. Boat storage and docking fees;
  10. The furnishing of camping spaces or trailer spaces at public or privately owned campgrounds, except for federal campgrounds, on less than a month-to-month basis;
  11. Locksmith services; and
  12. Pet grooming and kennel services.
2. As used in this section:
  1. 1. “Locksmith services” means repairing, servicing, or installing locks and locking devices, whether the locks and locking devices are:
      1. Incorporated into real property;
      2. Incorporated into tangible personal property; or
      3. Separate and apart from other property.
    2. “Locksmith services” also includes unlocking locks or locking devices for another person.
    3. “Locksmith services” shall not include the initial installation of locks by a contractor in new construction; and
  2. 1. “Solid wastes” means all putrescible and nonputrescible wastes in solid or semisolid form, including without limitation yard or food waste, waste glass, waste metals, waste plastics, wastepapers, waste paperboard, and all other solid or semisolid wastes resulting from industrial, commercial, agricultural, community, and residential activities.
    2. “Solid wastes” does not include saltwater, drilling fluids, hydraulic fracturing fluids, produced water, pit water, pit mud, and similar materials produced or generated from oil, gas, or other natural resource exploration and development activities except to the extent the materials described in this subdivision (b)(2)(B) are actually disposed of in a landfill permitted under the Arkansas Solid Waste Management Act, § 8-6-201 et seq., in which case only the landfill disposal fee shall be subject to tax.
1. 1. The Secretary of the Department of Finance and Administration shall determine the following conditions:
    1. That federal law authorizes the state to collect sales and use tax from some or all of the sellers that have no physical presence in the State of Arkansas and that make sales of taxable goods and services to Arkansas purchasers;
    2. That initiating the collection of sales and use tax from these sellers would increase the net available general revenues needed to fund state agencies, services, and programs; and
    3. 1. That during a six-month consecutive period, the amount of net available general revenues attributable to the collection of sales and use tax from sellers that have no physical presence in the State of Arkansas is equal to or greater than one hundred fifty percent (150%) of sales and use tax collected under subsection (c) of this section and § 26-53-145 on food and food ingredients.
      2. The secretary shall make the determination under subdivision (a)(1)(C)(i) of this section on a monthly basis following the determination that the conditions under subdivision (a)(1)(A) of this section have been met.
  2. 1. The secretary shall make a monthly determination as to whether the aggregate amount of deductions from net general revenues attributable to the following during the most recently ended six-month consecutive period, as compared with the same six-month period in the prior year, has declined by thirty-five million dollars ($35,000,000) or more:
      1. The Educational Adequacy Fund;
      2. Bonds issued under the Arkansas College Savings Bond Act of 1989, § 6-62-701 et seq.;
      3. Bonds issued under the Arkansas Higher Education Technology and Facility Improvement Act of 2005, § 6-62-1101 et seq.;
      4. The City-County Tourist Facilities Aid Fund; and
      5. Bonds issued under the Arkansas Water, Waste Disposal and Pollution Abatement Facilities Financing Act of 1997 and the Arkansas Water, Waste Disposal, and Pollution Abatement Facilities Financing Act of 2007, § 15-20-1301 et seq.
    2. 1. In making the determination in this subdivision (a)(2), the secretary shall consider all economic factors existing at the time of the determination that could potentially affect the decline in the aggregate amount of deductions, including without limitation pending litigation.
      2. If the consideration of additional economic factors under subdivision (a)(2)(B)(i) of this section results in a determination that the decline in the aggregate amount of deductions is not likely to remain at that reduced level, the secretary shall conclude that the conditions in this subdivision (a)(2) have not been met.
  3. When the secretary finds that all of the conditions in either subdivision (a)(1) or subdivision (a)(2) of this section have been met, then the gross receipts or gross proceeds taxes levied under subsection (c) of this section shall be levied at the rate of zero percent (0%) on the sale of food and food ingredients beginning on the first day of the calendar quarter that is at least thirty (30) days following the determination of the secretary.
2. As used in this section:
  1. “Food” and “food ingredients” mean the same as defined in § 26-52-103 except that “food” and “food ingredients” do not include prepared food; and
  2. “Prepared food” means the same as defined in § 26-52-103 except that “prepared food” does not include:
    1. Food that is only cut, repackaged, or pasteurized by the seller; or
    2. Eggs, fish, meat, and poultry, and foods containing these raw animal foods requiring cooking by the consumer to prevent food-borne illnesses as recommended by the United States Food and Drug Administration in its 2005 Food Code, § 3-401.11, as it existed on January 1, 2007.
3. 1. Beginning July 1, 2011, in lieu of the gross receipts or gross proceeds taxes levied on food and food ingredients under §§ 26-52-301 and 26-52-302, there is levied a tax on the gross receipts or gross proceeds derived from the sale of food and food ingredients at the rate of one and three-eighths percent (1.375%), to be distributed as follows:
    1. Seventy-six and six-tenths percent (76.6%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited as general revenues;
    2. Eight and five-tenths percent (8.5%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited into the Property Tax Relief Trust Fund; and
    3. Fourteen and nine-tenths percent (14.9%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited into the Educational Adequacy Fund.
  2. The gross receipts or gross proceeds taxes levied under subdivision (c)(1) of this section shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas gross receipts taxes.
4. The gross receipts or gross proceeds derived from the sale of food and food ingredients shall continue to be subject to the:
  1. Excise tax levied under Arkansas Constitution, Amendment 75, § 2; and
  2. All municipal and county gross receipts taxes.
5. The Department of Finance and Administration shall promulgate rules to implement the provisions of this section.
1. As used in this section, “heavy equipment” means:
  1. Asphalt pavers;
  2. Boring machines;
  3. Bulldozers;
  4. Cable plows;
  5. Compaction equipment;
  6. Concrete pavers;
  7. Cranes;
  8. Crawler tractors and loaders;
  9. Demolition equipment;
  10. Earth movers;
  11. Excavators;
  12. Loader backhoes;
  13. Motor graders;
  14. Portable air compressors;
  15. Rock drills;
  16. Rough terrain fork lifts;
  17. Scrapers;
  18. Skid-steer loaders;
  19. Trenchers;
  20. Wheel loaders; or
  21. Any other equipment determined by the Secretary of the Department of Finance and Administration to be heavy equipment.
2. The gross receipts tax levied under this chapter on the sale of new or used heavy equipment shall be collected, reported, and remitted by the heavy equipment dealer.
3. A heavy equipment dealer shall file a quarterly report with the Department of Finance and Administration identifying all sales of heavy equipment that are exempt from the gross receipts tax levied in this chapter, including without limitation the:
  1. Name and address of the purchaser;
  2. Item purchased;
  3. Invoice number;
  4. Amount of sales or use tax paid; and
  5. Basis for the exemption.
1. 1. 1. Beginning July 1, 2014, in lieu of the gross receipts or gross proceeds tax levied in §§ 26-52-301 and 26-52-302, there is levied an excise tax on the gross receipts or gross proceeds derived from the sale of natural gas and electricity to a manufacturer for use directly in the actual manufacturing process at the rate of one percent (1%).
    2. 1. Beginning July 1, 2015, the gross receipts or gross proceeds tax levied in §§ 26-52-301 and 26-52-302 and this section shall be levied at a rate of zero percent (0%) on the sale of natural gas and electricity to a manufacturer for use directly in the actual manufacturing process.
      2. However, the sale of natural gas and electricity to a manufacturer for use directly in the actual manufacturing process shall remain subject to the excise tax of one-eighth of one percent (1/8 of 1%) levied in Arkansas Constitution, Amendment 75, and the temporary excise tax of one-half percent (½%) levied in Arkansas Constitution, Amendment 91.
  2. The taxes levied in this subsection shall be distributed as follows:
    1. Seventy-six and six-tenths percent (76.6%) of the tax, interest, penalties, and costs received by the Secretary of the Department of Finance and Administration shall be deposited as general revenues;
    2. Eight and five-tenths percent (8.5%) of the tax, interest, penalties, and costs received by the secretary shall be deposited into the Property Tax Relief Trust Fund; and
    3. Fourteen and nine-tenths percent (14.9%) of the tax, interest, penalties, and costs received by the secretary shall be deposited into the Educational Adequacy Fund.
  3. 1. The excise tax levied in this section applies only to natural gas and electricity sold for use directly in the actual manufacturing process.
    2. Natural gas and electricity sold for any other purpose are subject to the full gross receipts or gross proceeds tax levied under §§ 26-52-301 and 26-52-302.
  4. The excise tax levied in this section shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas gross receipts taxes.
2. As used in this section, “manufacturer” means a:
  1. Manufacturer classified within sectors 31 through 33 or sector 115111 of the North American Industry Classification System, as in effect on January 1, 2011; or
  2. Generator of electric power classified within sector 22 of the North American Industry Classification System, as in effect on January 1, 2011, that uses natural gas to operate a new or existing generating facility that uses combined-cycle gas turbine technology.
3. 1. Except as otherwise provided in this subsection, the tax rate under subsection (a) of this section does not apply to a manufacturer as defined in subdivision (b)(2) of this section.
  2. In lieu of the tax rate under subsection (a) of this section, the excise tax rate levied on the gross receipts or gross proceeds derived from the sale of natural gas and electricity to a manufacturer as defined in subdivision (b)(2) of this section to operate a new or existing facility that uses combined-cycle gas turbine technology is as follows:
    1. Beginning January 1, 2012, five and one-eighth percent (5.125%);
    2. Beginning January 1, 2013, four and one-eighth percent (4.125%);
    3. Beginning January 1, 2014, two and five-eighths percent (2.625%); and
    4. Beginning January 1, 2015, one percent (1%).
  3. The taxes levied in this subsection shall be distributed in the same manner as stated in subsection (a) of this section.
4. Natural gas and electricity subject to the reduced tax rate levied in this section shall be separately metered from natural gas and electricity used for any other purpose by the manufacturer or otherwise established under subsection (f) of this section.
5. Before the sale of natural gas or electricity at the reduced excise tax rate levied in this section, the secretary may require any seller of natural gas or electricity to obtain a certificate from the consumer, in the form prescribed by the secretary, certifying that the manufacturer is eligible to purchase natural gas and electricity at the reduced excise tax rate.
6. The secretary shall promulgate rules for the proper administration of this section.
7. The gross receipts or gross proceeds derived from the sale of natural gas and electricity to a manufacturer shall continue to be subject to:
  1. The excise tax levied under Arkansas Constitution, Amendment 75, § 2; and
  2. All municipal and county gross receipts taxes.
8. All existing exemptions from the gross receipts tax levied by this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., for natural gas or electricity used in manufacturing or for other purposes that are otherwise provided by law shall continue in effect.
1. The excise tax levied by this chapter and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., is levied on the gross receipts or gross proceeds derived from the following:
  1. The lease or rental of a portable toilet on a long-term or short-term basis; and
  2. Any service associated with the lease or rental of a portable toilet provided by the lessor or otherwise, including without limitation:
    1. Pumping;
    2. Recharging with chemicals;
    3. Disinfecting;
    4. Cleaning;
    5. Deodorizing;
    6. Refilling toilet paper;
    7. General maintenance or repair;
    8. Pick-up or delivery; or
    9. Any other related service.
2. The gross receipts or gross proceeds derived from the sale of a portable toilet purchased for subsequent rental or lease may be purchased exempt from the gross receipts tax levied by this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., pursuant to § 26-52-401(12).
3. The Secretary of the Department of Finance and Administration may promulgate rules to implement this section.
1. The excise tax levied by this chapter and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., is levied on the gross receipts or gross proceeds derived from a fishing guide service provided as a part of a guided fishing trip if the fishing guide service is purchased in conjunction with the sale or lease of taxable tangible personal property by the person providing the fishing guide service, including without limitation:
  1. A boat or a boat motor;
  2. Fish bait; or
  3. Meals.
2. The Secretary of the Department of Finance and Administration shall promulgate rules to implement this section.
1. As used in this section, “withdrawal from stock” means the withdrawal or use of goods, wares, merchandise, or tangible personal property from an established business or from the stock in trade of the established reserves of an established business for consumption or use in the established business or by any other person.
2. 1. The gross receipts tax levied by this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., are levied on a withdrawal from stock.
  2. For purposes of calculating the gross receipts tax or the compensating use tax under subdivision (b)(1) of this section, the gross receipts or gross proceeds for a withdrawal from stock is:
    1. The value of the goods, wares, merchandise, or tangible personal property withdrawn if the goods, wares, merchandise, or tangible personal property:
      1. Were withdrawn for consumption or use in the established business; or
      2. Are alcoholic beverages or tobacco products; or
    2. Zero dollars ($0.00) if the goods, wares, merchandise, or tangible personal property, other than alcoholic beverages or tobacco products, were withdrawn for consumption or use by a:
      1. Nonprofit organization described in 26 U.S.C. § 501(c)(3), as it existed on January 1, 2019;
      2. Public educational institution;
      3. Nonprofit church; or
      4. Private individual who has suffered damage or loss as the result of a natural disaster if:
        
        The private individual receiving the goods, wares, merchandise, or tangible personal property resides in an area of the state that the Governor has officially declared to be a disaster area; and
        
        A representative of the established business provides a sworn affidavit to the Department of Finance and Administration with the report required under § 26-52-501 describing in detail the goods, wares, merchandise, or tangible personal property withdrawn and the disaster area in which each recipient of the withdrawn goods, wares, merchandise, or tangible personal property resides.
        
        The Secretary of the Department of Finance and Administration may promulgate rules to implement this section.
1. There is specifically exempted from the tax imposed by this chapter the following:
  1. 1. Gross receipts or gross proceeds derived from the sale of tangible personal property consisting of machinery and equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas, including facilities and plants for manufacturing of feed, processing of poultry or eggs, or both, and livestock, and the hatching of poultry, but only to the extent that the machinery and equipment is purchased and used for the purposes set forth in this subdivision (a)(1).
    2. The machinery and equipment will be exempt under this subdivision (a)(1) if it is purchased and used to create new manufacturing or processing plants or facilities within this state or to expand existing manufacturing or processing plants or facilities within this state;
  2. 1. Machinery purchased to replace existing machinery and used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in this state will be exempt under this subdivision (a)(2).
    2. 1. As used in subdivision (a)(2)(A) of this section, “machinery purchased to replace existing machinery” means that substantially all of the machinery and equipment required to perform an essential function is physically replaced with new machinery.
      2. As used in subdivision (a)(2)(B)(i) of this section, “substantially” is intended to exclude routine repairs and maintenance and partial replacements that do not improve efficiency or extend the useful life of the entire machine, but it is not intended to mean that foundations and minor components that can be economically adapted, rebuilt, or refurbished must be completely replaced when replacement would be more expensive or impracticable than adapting, rebuilding, or refurbishing the old foundation or minor components.
    3. It is the intent of this subdivision (a)(2) to provide the exemptions in subdivision (a)(1) of this section and this subdivision (a)(2) as incentives to encourage the location of new manufacturing plants in Arkansas, the expansion of existing manufacturing plants in Arkansas, and the modernization of existing manufacturing plants in Arkansas through the replacement of old, inefficient, or technologically obsolete machinery and equipment; and
  3. 1. Gross receipts or gross proceeds derived from the sale of tangible personal property consisting of machinery and equipment required by state or federal law, rules, or regulations to be installed and utilized by manufacturing and processing plants or facilities, cities, or towns in this state to prevent or reduce air or water pollution or contamination that might otherwise result from the operation of the plant, facility, city, or town.
    2. As used in this subdivision (a)(3), “machinery and equipment required by state or federal law, rules, or regulations to be installed and utilized by manufacturing and processing plants or facilities” includes:
      1. Machinery and equipment required by state or federal law, rules, or regulations to be used in the refining of petroleum-based products to remove sulfur pollutants from the refined product; and
      2. Any repair parts and repair labor for machinery or equipment required by state or federal law, rules, or regulations to be used in the refining of petroleum-based products to remove sulfur pollutants from the refined product.
2. As used in this section, “manufacturing” or “processing” refers to and includes those operations commonly understood within their ordinary meaning and shall also include:
  1. Mining;
  2. Quarrying;
  3. Refining;
  4. Extracting oil and gas;
  5. Cotton ginning;
  6. Drying of rice, soybeans, and other grains;
  7. Manufacturing of feed;
  8. Processing of poultry or eggs and livestock and the hatching of poultry;
  9. Printing of all kinds, types, and characters, including the services of overprinting and photographic processing incidental to printing;
  10. Processing of scrap metal into grades and bales for further processing into steel and other metals;
  11. Retreading of tires for automobiles, trucks, and other mobile equipment powered by electrical or internal combustion engines or motors;
  12. Rebuilding or remanufacturing of used parts for automobiles, trucks, and other mobile equipment powered by electrical or internal combustion engines or motors if the rebuilt or remanufactured parts are not sold directly to the consumer but are sold for resale; and
  13. Producing of protective coatings which increase the quality and durability of a finished product.
3. 1. 1. It is the intent of this section to exempt only the machinery and equipment as shall be used directly in the actual manufacturing or processing operation at any time from the initial stage when actual manufacturing or processing begins through the completion of the finished article of commerce and the packaging of the finished end product.
    2. As used in this subsection, “directly” is used to limit the exemption to only the machinery and equipment used in actual production during processing, fabricating, or assembling raw materials or semifinished materials into the form in which the personal property is to be sold in the commercial market.
  2. For purposes of this subsection, the following definitions, specific inclusions, and specific exclusions shall apply and represent the intent of the General Assembly as to its interpretation of the term “used directly”:
    1. 1. Machinery and equipment used in actual production includes machinery and equipment that meet all other applicable requirements and which cause a recognizable and measurable mechanical, chemical, electrical, or electronic action to take place as a necessary and integral part of manufacturing, the absence of which would cause the manufacturing operation to cease.
      2. “Directly” does not mean that the machinery and equipment must come into direct physical contact with any of the materials that become necessary and integral parts of the finished product.
      3. Machinery and equipment which handle raw, semifinished, or finished materials or property before the manufacturing process begins are not used directly in the manufacturing process.
      4. Machinery and equipment which are necessary for purposes of storing the finished product are not used directly in the manufacturing process.
      5. Machinery and equipment used to transport or handle a product while manufacturing is taking place are used directly;
    2. Machinery and equipment “used directly” in the manufacturing process includes without limitation the following:
      1. Molds, frames, cavities, and forms that determine the physical characteristics of the finished product or its packaging material at any stage of the manufacturing process;
      2. Dies, tools, and devices attached to or a part of a unit of machinery that determine the physical characteristics of the finished product or its packaging material at any stage of the manufacturing process;
      3. Testing equipment to measure the quality of the finished product at any stage of the manufacturing process;
      4. Computers and related peripheral equipment that directly control or measure the manufacturing process;
      5. Machinery and equipment that produce steam, electricity, or chemical catalysts and solutions that are essential to the manufacturing process but which are consumed during the course of the manufacturing process and do not become necessary and integral parts of the finished product; and
      6. Sand and other proppants used to complete a new oil or gas well or to re-complete, redrill, or expand an existing oil or gas well; and
    3. Machinery and equipment “used directly” in the manufacturing process shall not include the following:
      1. Hand tools;
      2. Machinery, equipment, and tools used in maintaining and repairing any type of machinery and equipment;
      3. Transportation equipment, including conveyors, used solely before or after the manufacturing process has been started or completed;
      4. Office machines and equipment including computers and related peripheral equipment not directly used in controlling or measuring the manufacturing process;
      5. Buildings;
      6. Machinery and equipment used in administrative, accounting, sales, or other such activities of the business;
      7. All furniture;
      8. All other machinery and equipment not used directly in manufacturing or processing operations as defined in this section; and
      9. Machinery and equipment used by a manufacturer to produce or repair replacement dies, molds, repair parts, or replacement parts used or consumed in the manufacturer's own manufacturing process.
4. The Secretary of the Department of Finance and Administration may promulgate rules for the orderly and efficient administration of this section.
1. As used in this section:
  1. 1. “Farm equipment and machinery” means implements used exclusively and directly in farming.
    2. “Farm equipment and machinery” includes:
      1. Irrigation pipe used to carry water from an irrigation well to the crops produced in farming regardless of whether the irrigation pipe is used above ground or is buried underground; and
      2. Implements used to harvest crops produced in farming by others.
    3. However, “farm equipment and machinery” shall not include implements used in the production and severance of timber, motor vehicles of a type subject to registration, airplanes, or hand tools; and
  2. “Farming” means the agricultural production of food or fiber as a business or the agricultural production of grass sod or nursery products as a business.
2. The gross receipts or gross proceeds derived from the sale of new and used farm equipment and machinery are exempt from the Arkansas gross receipts tax levied by this chapter.
3. The Secretary of the Department of Finance and Administration shall promulgate rules and prescribe forms for claiming the exemption provided by this section.
4. 1. If a person claims the exemption provided for in this section for an all-terrain vehicle:
    1. The person shall complete a form prescribed by the secretary that includes:
      1. The person's name and contact information;
      2. The person's tax identification number;
      3. The make, model, year, and identification number of the all-terrain vehicle;
      4. A signed statement indicating that the person understands that the use of an exemption under this section for the purchase of an all-terrain vehicle may be subject to audit by the Department of Finance and Administration; and
      5. Any other information required by the secretary to aid in the administration of this section; and
    2. The seller of the all-terrain vehicle shall submit the completed form required under subdivision (d)(1)(A) of this section to the department with the seller's sales tax return for the month in which the all-terrain vehicle was sold.
  2. 1. As used in this section, “all-terrain vehicle” means a vehicle that:
      1. Has three (3), four (4), or six (6) wheels;
      2. Is fifty inches (50") or less in width;
      3. Is equipped with nonhighway tires; and
      4. Has an engine displacement of no more than one thousand cubic centimeters (1,000 cc).
    2. “All-terrain vehicle” does not include a golf cart, riding lawnmower, or lawn or garden tractor.
1. All feedstuffs used in the commercial production of livestock or poultry in this state are exempt from the Arkansas gross receipts tax levied by this chapter.
2. As used in this section, “feedstuffs” means:
  1. Processed or unprocessed grains;
  2. Mixed or unmixed grains;
  3. Whole or ground hay;
  4. Whole or ground straw;
  5. Hulls, whether or not mixed with other materials; and
  6. All food supplements, whether or not nutritional or medicinal, including hormones, antibiotics, vitamins, minerals, and medications ingested by poultry or livestock.
1. 1. The gross receipts or gross proceeds derived from the sale, purchase, or use of prescription drugs by licensed pharmacists, hospitals, or physicians when sold, purchased, or administered for human use and from the sale of oxygen sold for human use on prescription of a licensed physician shall be exempt from the Arkansas gross receipts tax levied by this chapter and the Arkansas compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The withdrawal of prescription drug samples for free distribution from a stock or inventory, whether located within or outside the State of Arkansas, is exempt from the tax imposed by this chapter.
2. The Secretary of the Department of Finance and Administration shall adopt such appropriate rules as the secretary deems necessary to assume the effective and efficient administration of the exemption provided for in this section and to prevent abuse thereof.
1. 1. Any person, whether an established business or an individual, engaged in the business of selling aircraft in this state and holding a retail sales tax permit may purchase aircraft exempt for resale and use the aircraft for rental or charter service without payment of sales or use tax for a period of not to exceed one (1) year from the date of purchase of the aircraft.
  2. In the case of aircraft purchased for resale which require substantial modification or substantial refurbishing prior to resale, the purchaser may use the aircraft for rental or charter service without payment of sales or use tax for a period of not to exceed two (2) years from the date of purchase of the aircraft.
2. The use of the aircraft for rental or charter during the applicable one-year or two-year holding period described in subsection (a) of this section shall not constitute a withdrawal from stock, and the purchaser shall not be required to pay the sales tax on the purchase price of the aircraft held in stock and used for such purposes.
3. The aircraft purchaser shall collect and remit gross receipts and short-term rental tax on the rentals and shall subsequently collect and remit the gross receipts tax on the aircraft at the time of subsequent sale in the manner required by law.
4. If the purchaser fails to sell the aircraft during the applicable holding period, the purchaser shall be liable for sales or use tax on his or her purchase price of the aircraft.
1. No tax shall be levied or collected upon gross receipts derived from the sale of motor vehicles to municipalities and counties or to state-supported colleges and universities or to public school districts in this state.
2. No tax shall be levied or collected upon the gross receipts derived from the sale of school buses to school districts of Arkansas.
3. No tax shall be levied or collected upon the gross receipts derived from the sale of school buses if at the time of sale the school bus purchaser has contracted with an Arkansas school district to provide school bus service for the school district, the school buses purchased are used exclusively in providing such service, and the obligation to pay any taxes related to the school buses is contractually assumed by the school district. This exemption shall apply only to school buses which are equipped in accordance with § 6-19-117(a)-(d).
1. Gross receipts or gross proceeds from the sale of tickets for admission to athletic events and interscholastic activities at public and private elementary and secondary schools in this state shall be exempt from the provisions of the Arkansas gross receipts tax.
2. Gross receipts or gross proceeds from the sale of tickets for admission to athletic events at universities and colleges in this state, whether or not supported by public funds, shall be exempt from the provisions of the Arkansas gross receipts tax.
1. All sales to humane societies which are not operated for profit and are organized under the provisions of § 20-19-101 for the prevention of cruelty to animals shall be exempt from this chapter.
2. The Secretary of the Department of Finance and Administration shall issue a certificate to the officers of each humane society organized under § 20-19-101, which shall indicate the identity of the humane society officer and the humane society with which the humane society officer is associated. Sales to a humane society shall be exempt from the Arkansas gross receipts tax upon presentation of the certificate.
1. Gross receipts and gross proceeds derived from the sale of new automobiles to a veteran of the United States Armed Forces who is blind as the result of a service-connected injury shall be exempt from the Arkansas gross receipts tax.
2. This exemption shall apply only to those persons who furnish the Department of Finance and Administration a statement from the United States Department of Veterans Affairs certifying that the individual is a veteran of the United States Armed Forces and has been blinded as the result of a service-connected injury. This statement shall be supplied to the Department of Finance and Administration upon application for a vehicle license.
3. The exemption allowed by this section shall be available only on the gross receipts or gross proceeds derived from the sale of one (1) new automobile every two (2) years to a veteran who complies with the requirements of this section.
4. As used in this section, “automobile” means a passenger automobile or pickup truck but does not include trucks with a maximum gross load in excess of three-quarters (¾) of one (1) ton and does not include any trailer.
1. The gross receipts or gross proceeds derived from the sale of the first five hundred kilowatt hours (500 kWh) of electricity per month and the total franchise taxes billed to each residential customer whose household income is no more than twelve thousand dollars ($12,000) per year are exempt from the Arkansas gross receipts tax levied by this chapter and all other state excise taxes that would otherwise be levied on the gross receipts or gross proceeds derived from the sale and the total franchise taxes.
2. As used in this section:
  1. “Household income” means the combined income received by members of a household during a calendar year; and
  2. 1. “Income” means gross income as defined in the Income Tax Act of 1929, § 26-51-101 et seq., less deductions allowed under § 26-51-423.
    2. “Income” includes:
      1. Alimony;
      2. Support money;
      3. Cash public assistance and relief;
      4. The gross amount of any pension or annuity, including all monetary retirement benefits from whatever source derived, including without limitation railroad retirement benefits, all payments received under the Social Security Act, 42 U.S.C. § 301 et seq., and veterans' disability pensions;
      5. All dividends and interest from whatever source derived not included in gross income;
      6. Workers' compensation benefits; and
      7. The gross amount of “loss of time insurance”.
    3. “Income” does not include:
      1. Gifts from nongovernmental sources;
      2. Surplus food;
      3. In-kind relief supplied by a governmental agency; or
      4. For a World War I veteran of the United States Armed Forces or the widow of a World War I veteran of the United States Armed Forces, federal or state retirement benefits, pension benefits, disability benefits, railroad retirement benefits, or Social Security benefits.
3. The exemption in this section applies to sales by all electric utilities operating in this state, whether investor-owned utilities, electric cooperative corporations created or existing under the Electric Cooperative Corporation Act, § 23-18-301 et seq., or municipally owned electric utilities.
4. On forms provided by the Secretary of the Department of Finance and Administration, a residential customer qualifying for the exemption in this section shall notify the electric utility providing service to the residential customer of the residential customer's intention to claim the exemption in this section.
5. 1. After a residential customer has qualified for the exemption in this section, an additional application is not required.
  2. When a residential customer who has qualified for the exemption in this section has household income exceeding the twelve-thousand-dollar limit, the residential customer is disqualified from the exemption in this section and shall notify the electric utility on forms provided by the secretary. The notice form shall be mailed to the electric utility on or before March 1 of the year following the year the household income exceeds twelve thousand dollars ($12,000).
6. 1. If a residential customer does not notify the electric utility as provided in subsection (e) of this section and continues to receive the exemption in this section after his or her household income exceeds twelve thousand dollars ($12,000), the residential customer is liable for the amount of the tax exemption received after March 1 of the year following the year the household income exceeds twelve thousand dollars ($12,000).
  2. The electric utility shall bill a residential customer for the amount of tax due as a result of the residential customer's disqualification under this section and remit the tax to the secretary.
1. The gross receipts or gross proceeds derived from the sale of motor fuel to an owner or operator of a motor bus operated on designated streets according to regular schedule and under municipal franchise which is used for municipal transportation purposes shall be exempt from the tax levied in this chapter.
2. However, it shall be unlawful for the owner or operator of a motor bus operating under municipal franchise as provided in this section to use any or permit the use of any motor fuel upon which the gross receipts tax has not been paid in any motor vehicle other than a motor bus operated on designated streets according to regular schedules under municipal franchise.
3. 1. Any owner or operator of a motor bus permitting motor fuel to be used in violation of this section shall be guilty of a violation and upon conviction shall be fined in an amount of not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000).
  2. In addition to the fine in subdivision (c)(1) of this section, the owner or operator shall be liable to the State of Arkansas for a penalty of triple the amount of gross receipts tax due the State of Arkansas on any motor fuel upon which the gross receipts tax has not been paid and which was used in violation of the provisions of this section.
1. There is specifically exempted from the tax imposed by §§ 26-52-301 and 26-52-302, the gross receipts or gross proceeds derived from the sale of substitute fuel used in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas.
2. As used in this section:
  1. “Manufacturing” or “processing” means the same as set out in § 26-52-402(b);
  2. 1. “Solid waste” means only solid waste as commonly understood on April 10, 1995.
    2. “Solid waste” does not include solid wood chips or other wood by-products; and
  3. “Substitute fuel” means products or materials that have been derived from tires, from municipal solid waste or other solid waste, from used motor oil, from used railroad ties, or from petroleum-based waste for use in producing heat or power by burning.
1. The gross receipts or gross proceeds derived from the sale or lease of railroad rolling stock manufactured for use in transporting persons or property in interstate commerce is exempt from the gross receipts tax levied by this chapter.
2. 1. As used in this section, “railroad rolling stock” means completed railroad locomotives and completed railroad cars designed to haul either passengers or freight.
  2. 1. “Railroad rolling stock” shall not include repair parts or materials used to repair locomotives or railroad cars, components of railroad cars or locomotives, trailers, or any property not used directly in the transportation of passengers or freight.
    2. “Railroad rolling stock” shall also not include machinery used to repair or maintain railroad cars, locomotives, track, railroad ties, or railroad roadway.
1. A contractor that purchases tangible personal property which becomes a recognizable part of a completed structure or improvement to real property and which is purchased for use or consumption in the performance of construction contracts shall be entitled to a rebate on any additional gross receipts tax or compensating use tax levied by the state or any city or county if:
  1. The construction contract for which the tangible personal property was purchased is entered into prior to the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax; and
  2. The contractor paid the additional gross receipts or compensating use tax to the seller.
2. As used in this section, “construction contract” means a contract to construct, manage, or supervise the construction, erection, or substantial modification of a building or other improvement or structure affixed to real property. “Construction contract” shall not mean a contract to produce tangible personal property.
3. The rebate provided by this section shall apply to tangible personal property purchased within five (5) years from the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax.
4. The rebate provided by this section shall not apply to cost-plus contracts which allow the contractor to pass any additional tax on to the principal as a part of the contractor's costs.
5. Interest shall not accrue or be paid on an amount subject to a claim for rebate pursuant to this section.
6. The Secretary of the Department of Finance and Administration shall promulgate rules and prescribe forms for claiming a rebate as provided by this section.
1. 1. The gross receipts or gross proceeds derived from the sale of gas produced from biomass in a facility meeting all of the eligibility requirements for the credit allowed under 26 U.S.C. § 45K, as in effect on December 31, 1996, and sold to an entity for the purpose of generating steam, hot air, or electricity to be sold to the gas producer are exempt from the tax levied by this chapter.
  2. The gross receipts or gross proceeds derived from the sale of steam, hot air, or electricity from the entity purchasing the gas produced from biomass in a facility meeting all of the eligibility requirements for the credit allowed under 26 U.S.C. § 45K, as in effect on December 31, 1996, to the gas producer are exempt from the tax levied by this chapter.
2. As used in this section, “gas produced from biomass” means gas produced from any organic material other than:
  1. Oil and natural gas or any product thereof; or
  2. Coal, including lignite, or any product thereof.
1. The exemptions stated in this subchapter for a charitable organization shall not extend to sales of new tangible personal property, specified digital products, or a digital code by the charitable organization if the sales compete with sales by for-profit businesses.
2. A sale by a charitable organization does not compete with a sale by a for-profit business if:
  1. The sales transaction is conducted by a member of the charitable organization and not by a franchisee or licensee;
  2. All the proceeds derived from the sales transaction go to the charitable organization; and
  3. The sales transaction is not a continuing one and is held not more than three (3) times a year.
3. 1. The provisions of this section shall not apply to a sale made by a nonprofit hospital, a cafeteria at a nonprofit hospital, or a gift shop at a nonprofit hospital, whether operated by the hospital, a hospital auxiliary, or other nonprofit organization.
  2. The provisions of this section shall also not apply to a gift shop operated by a charitable organization at a for-profit hospital.
1. The gross receipts or gross proceeds derived from the sale of machinery, new and used equipment, and related attachments that are sold to or used by a person engaged primarily in the harvesting of timber are exempt from the taxes levied by this chapter and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. The machinery, new or used equipment, and related attachments are exempt under this section only if they are:
  1. Purchased by a person whose primary activity is the harvesting of timber; and
  2. Used exclusively in the off-road activity of harvesting of timber.
3. The exemption provided in this section does not apply to a purchase of a repair or replacement part for the machinery, new or used equipment, or related attachment.
4. As used in this section:
  1. “Equipment” means only complete systems or units that operate exclusively and directly in the harvesting of timber;
  2. “Harvesting of timber” means the use of off-road equipment and related attachments in every forestry procedure starting with the severing of a tree from the ground through the point at which the tree or its parts in any form have been loaded in the field in or on a truck or other vehicle for transport to the place of use;
  3. “Machinery” means only complete systems or units that operate exclusively and directly in the harvesting of timber;
  4. “Off-road equipment” means skidders, feller bunchers, delimbers of all types, chippers of all types, loaders of all types, and bulldozers equipped with grapples used as skidders; and
  5. “Primary activity” means the principal business activity in which a person is engaged and to which more than fifty percent (50%) of all the resources of his or her business activities are committed.
1. 1. Gross receipts or gross proceeds derived from the rental, sale, or repair of durable medical equipment prescribed by a physician, mobility enhancing equipment prescribed by a physician, a prosthetic device prescribed by a physician, and disposable medical supplies prescribed by a physician shall be exempt from all state and local sales and use taxes.
  2. This exemption shall apply only to durable medical equipment, mobility enhancing equipment, a prosthetic device, and disposable medical supplies sold to a specific patient pursuant to a prescription written before the sale.
2. As used in this section:
  1. “Disposable medical supplies” includes without limitation the following:
    1. Ostomy, urostomy, and colostomy supplies;
    2. Enemas, suppositories, and laxatives used in routine bowel care; and
    3. Disposable undergarments and linen savers;
  2. 1. “Durable medical equipment” means equipment, including repair and replacement parts for the equipment, that:
      1. Can withstand repeated use;
      2. Is primarily and customarily used to serve a medical purpose;
      3. Generally is not useful to a person in the absence of illness or injury;
      4. Is not worn in or on the body; and
      5. Is for home use.
    2. “Durable medical equipment” does not include mobility enhancing equipment;
  3. 1. “Mobility enhancing equipment” means equipment, including repair and replacement parts for the equipment, that:
      1. Is primarily and customarily used to provide or increase the ability to move from one (1) place to another and that is appropriate for use either in a home or a motor vehicle;
      2. Is not generally used by a person with normal mobility; and
      3. Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
    2. “Mobility enhancing equipment” does not include durable medical equipment;
  4. “Physician” means a person licensed under § 17-95-401 et seq. or § 17-96-101 et seq.;
  5. “Prescription” means an order, formula, or recipe issued in any form and transmitted by an oral, written, electronic, or other means of transmission by a duly licensed physician or practitioner authorized to issue prescriptions under Arkansas law;
  6. 1. “Prosthetic device” means a replacement, corrective, or supportive device, including repair and replacement parts for the device, worn on or in the body to:
      1. Artificially replace a missing portion of the body;
      2. Prevent or correct physical deformity or malfunction; or
      3. Support a weak or deformed portion of the body.
    2. “Prosthetic device” does not include corrective eyeglasses, contact lenses, and dental prostheses; and
  7. “Repair and replacement parts” includes all components or attachments used in conjunction with durable medical equipment.
3. 1. Notwithstanding subdivision (a)(2) of this section, a patient may claim the exemption under this section for a wheelchair lift or automobile hand controls prescribed for the patient after the sale if:
    1. The wheelchair lift or automobile hand controls are purchased in conjunction with the purchase of a motor vehicle;
    2. The gross receipts or gross proceeds derived from the sale of the wheelchair lift or automobile hand controls are separately stated on the invoice or bill of sale for the purchase of the motor vehicle; and
    3. The patient has a prescription for the wheelchair lift or automobile hand controls at the time the motor vehicle is registered.
  2. A patient purchasing a wheelchair lift or automobile hand controls directly from a vendor of adaptive medical equipment for subsequent installation shall possess a prescription for the wheelchair lift or automobile hand controls prior to the sale in compliance with subdivision (a)(2) of this section.
1. The gross receipts or gross proceeds derived from a purchase of or a repair to fire protection equipment and emergency equipment to be owned by and exclusively used by a volunteer fire department are exempt from the taxes levied under:
  1. This chapter;
  2. The Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.; and
  3. All other state, local, and county sales and use taxes.
2. The gross receipts or gross proceeds derived from a purchase of supplies and materials to be used in the construction and maintenance of volunteer fire departments, including improvements and fixtures thereon, and property of any nature appurtenant thereto or used in connection therewith are exempt from the taxes levied under:
  1. This chapter;
  2. The Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.; and
  3. All other state, local, and county sales and use taxes.
1. The gross receipts or gross proceeds derived from sales of electricity and natural gas used in the process of manufacturing wall and floor tile by manufacturers of tile classified in Standard Industrial Classification 3253 are exempt from:
  1. The Arkansas gross receipts tax levied by §§ 26-52-301 and 26-52-302;
  2. The Arkansas compensating use tax levied by §§ 26-53-106 and 26-53-107; and
  3. All city and county sales and use taxes.
2. A manufacturer of wall or floor tile classified in Standard Industrial Classification 3253 must have begun construction of a manufacturing facility in the state prior to January 1, 2003, in order to claim this exemption.
1. As used in this section:
  1. “Person” means a natural person who resided in this state at the time of purchasing a truck tractor or semitrailer in this state;
  2. “Semitrailer” means every vehicle with or without motive power, including a pole trailer, drawn by a truck tractor or a Class Six or Class Seven truck as defined by § 27-14-601(a)(3)(F) and (G) that is registered with the International Registration Plan to be engaged in interstate commerce and designed for carrying property; and
  3. 1. “Truck tractor” means a motor vehicle:
      1. Designed and used primarily for drawing other vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and load so drawn; and
      2. Registered as a:
        
        Class Five or Class Eight truck as defined by § 27-14-601(a)(3); or
        
        Class Six or Class Seven truck as defined by § 27-14-601(a)(3)(F) and (G) that is not registered with the International Registration Plan to be engaged in interstate commerce.
    2. “Truck tractor” does not include a Class Six or Class Seven truck as defined by § 27-14-601(a)(3)(F) and (G) that is registered with the International Registration Plan to be engaged in interstate commerce.
2. Except as provided in subsections (d) and (e) of this section, the gross receipts or gross proceeds in excess of nine thousand one hundred fifty dollars ($9,150) derived from the sale of a new or used truck tractor in this state are exempt from the Arkansas gross receipts tax levied by this chapter.
3. The gross receipts or gross proceeds derived from the sale of a new or used semitrailer in this state are exempt from the Arkansas gross receipts tax levied by this chapter.
4. The gross receipts or gross proceeds derived from the sale in this state of a new or used Class Six or Class Seven truck as defined by § 27-14-601(a)(3)(F) and (G) that is registered with the International Registration Plan to be engaged in interstate commerce are exempt from the Arkansas gross receipts tax levied by this chapter.
5. The exemption under subsection (b) of this section does not apply to gross receipts taxes levied by any Arkansas city, town, or county.
1. 1. As used in this section, “instructional materials” includes:
    1. Traditional books, sheet music, and trade books in printed and bound form;
    2. Activity-oriented educational programs that may include manipulatives;
    3. Hand-held calculators;
    4. Technology-based educational materials and electronic software that require the use of electronic equipment in order to be used in the learning process, except for the equipment required to make use of these materials;
    5. Maps, globes, art supplies, workbooks, flash cards, educational blocks, educational models, manipulatives, and charts for classroom use;
    6. Video tapes, DVDs, films, or cassettes containing instructional information designed to be presented to students as part of a course of study; and
    7. Specified digital products and a digital code that contain instructional information designed to be presented to students as part of a course of study.
  2. “Instructional materials” does not include:
    1. Items purchased for use in:
      1. Interscholastic extracurricular activities; or
      2. Administration or maintenance of a school; or
    2. Construction materials or supplies.
2. Textbooks, library books, and other instructional materials shall be exempt from the gross receipts tax levied by this chapter if purchased by:
  1. An Arkansas school district or Arkansas public school that receives state funding; or
  2. The State of Arkansas for free distribution to Arkansas school districts or Arkansas public schools.
1. The General Assembly finds that Arkansas manufacturers that use the chlor-alkali manufacturing process are at a disadvantage when compared to manufacturers in surrounding states where the electricity used in the chlor-alkali process is exempt.
1. As used in this section:
  1. “Livestock” means any mammal the products of which ordinarily are used for food or human consumption;
  2. “Livestock reproduction equipment” means any of the following used in the reproduction of livestock:
    1. Nitrogen;
    2. Nitrogen tanks; or
    3. Any equipment used to implement the reproduction technique; and
  3. “Livestock reproduction substance” means any natural or artificial substance used in the reproduction of livestock, including semen or embryos.
2. Any livestock reproduction equipment or livestock reproduction substance shall be exempt from the tax imposed by this chapter.
1. As used in this section:
  1. “Exemption certificate” means an exemption certificate issued by the Secretary of the Department of Finance and Administration under subdivision (d)(1) of this section;
  2. “Nonprofit organization” means any organization described in 26 U.S.C. § 501(c)(3), as in effect on January 1, 2005;
  3. “Qualified museum” means any nonprofit organization that acquires a collection of artwork for purposes of establishing and operating a qualified museum facility, regardless of whether the nonprofit organization may engage in any other charitable activity if the:
    1. Fair market value of the artwork collection of the nonprofit organization for public viewing and exhibition at the qualified museum facility exceeds one hundred million dollars ($100,000,000) prior to January 1, 2013; and
    2. The secretary has issued an exemption certificate to the nonprofit organization; and
  4. “Qualified museum facility” means a facility, including the structures, buildings, and any ancillary or related structures or buildings and real property associated with the facility, including auditoriums, parking areas, and educational facilities that house a collection of artwork or other exhibits for public viewing and exhibition if the:
    1. Principal location and primary operations of the facility will be located within the State of Arkansas;
    2. Museum portion of the facility opens to the public after January 1, 2005, and prior to January 1, 2013; and
    3. Aggregate total costs of the construction and acquisition of the facility exceed thirty million dollars ($30,000,000) prior to January 1, 2013.
2. 1. The gross receipts or gross proceeds derived from the sale of tangible personal property, specified digital products, a digital code, or services to a qualified museum are exempt from this chapter.
  2. The exemption provided in subdivision (b)(1) of this section shall also apply to the gross receipts or gross proceeds derived from the sale of materials to a qualified museum or its contractor or agent used in the construction, repair, expansion, or operation of the qualified museum facility.
3. A nonprofit organization requesting recognition as a qualified museum shall file with the secretary on forms prescribed by the secretary a written statement under oath:
  1. 1. Describing the facts upon which the nonprofit organization claims the exemption under this section.
    2. This statement shall be filed prior to first claiming the exemption under this section and shall include facts indicating that the nonprofit organization has a good faith plan and intent to satisfy the conditions under subdivision (c)(2) of this section; and
  2. On or before June 30, 2013, stating that the following conditions have been met:
    1. The nonprofit organization has established and operated prior to January 1, 2013, a facility that houses a collection of artwork or other exhibits for public viewing and exhibition;
    2. The principal location and primary operations of the facility are within the State of Arkansas;
    3. The museum portion of the facility first opened to the public after January 1, 2005, and prior to January 1, 2013;
    4. The aggregate total costs of construction and acquisition of the facility, including the structures, buildings, ancillary or related structures or buildings, real property used in connection with the facility, auditoriums, parking areas, and educational facilities exceeded thirty million dollars ($30,000,000) prior to January 1, 2013; and
    5. Prior to January 1, 2013, the nonprofit organization acquired a collection of artwork with a fair market value in excess of one hundred million dollars ($100,000,000) for public viewing and exhibition at the qualified museum facility.
4. 1. After filing the statement required under subdivision (c)(1) of this section, if the secretary finds that the nonprofit organization has a good faith plan and intent to satisfy the conditions of subdivision (c)(2) of this section prior to January 1, 2013, the secretary shall issue an exemption certificate to the nonprofit organization within sixty (60) days after the filing of the statement.
  2. The secretary may revoke the exemption certificate at any time after it is issued if the secretary determines that the nonprofit organization is unable to satisfy the conditions under subdivision (c)(2) of this section prior to January 1, 2013.
  3. After filing the statement required under subdivision (c)(2) of this section, if the secretary determines that the nonprofit organization has not met the conditions under subdivision (c)(2) of this section, the secretary shall revoke the exemption certificate of the nonprofit organization.
  4. If the nonprofit organization fails to file the statement described in subdivision (c)(2) of this section on or prior to June 30, 2013, the secretary shall revoke the exemption certificate.
  5. Revocation by the secretary of an exemption certificate shall be retroactive to the date of its issuance subject to subsection (e) of this section.
5. 1. If the secretary revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties due under this chapter, the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., or the Arkansas Tax Procedure Act, § 26-18-101 et seq., may be assessed against the nonprofit organization but may not be assessed against a third party that has relied in good faith on the exemption certificate prior to its revocation.
  2. If the secretary revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties assessed against the nonprofit organization shall also include any tax deficiency, related interest, and applicable penalties assessed on purchases made by the nonprofit organization's contractors and agents for the benefit of the nonprofit organization in reliance on the exemption certificate.
  3. 1. Any assessment by the secretary under subdivision (e)(1) or subdivision (e)(2) of this section shall be made in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.
    2. However, the time period for the secretary to make the assessment is extended to whichever of the following occurs first:
      1. Three (3) years from the date the nonprofit organization files the statement under subdivision (c)(2) of this section; or
      2. July 1, 2016.
  4. The nonprofit organization may contest any assessment or other determination by the secretary in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. The gross receipts or gross proceeds derived from the sale of natural gas and electricity used in the manufacturing of tires in this state are exempt from the:
  1. Gross receipts tax levied by this chapter; and
  2. Compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. As used in this section:
  1. “Manufacturing of tires” means the manufacturing of new motor vehicle tires and does not include the retreading of tires; and
  2. “Motor vehicle” means any vehicle required to be licensed for highway use under Arkansas law.
3. The natural gas and electricity subject to the exemption in this section shall be separately metered from the natural gas and electricity used for any other purpose by the manufacturer or as otherwise established in the rules issued under subsection (d) of this section.
4. The Secretary of the Department of Finance and Administration shall promulgate rules for the proper administration of this section.
1. As used in this section:
  1. “Clothing” means an item of human wearing apparel suitable for general use for which the gross receipts or gross proceeds paid for the item of clothing is less than one hundred dollars ($100);
  2. “Clothing accessory or equipment” means an incidental item worn on the person or in conjunction with clothing for which the gross receipts or gross proceeds paid for the item of clothing accessory or equipment is less than fifty dollars ($50.00);
  3. “School art supply” means an item commonly used by a student in a course of study for artwork;
  4. “School instructional material” means written material commonly used by a student in a course of study as a reference and to learn the subject being taught; and
  5. “School supply” means an item commonly used by a student in a course of study.
2. The gross receipts or gross proceeds derived from the sale of the following items are exempt from the gross receipts tax levied by this chapter, and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., every year from 12:01 a.m. on the first Saturday in August and ending at 11:59 p.m. the following Sunday:
  1. Clothing;
  2. Clothing accessory or equipment;
  3. School art supply;
  4. School instructional material; and
  5. School supply.
3. The Department of Finance and Administration shall promulgate rules to implement this section.
1. As used in this section, “utility” means electricity, liquefied petroleum gas, and natural gas.
2. 1. The gross receipts or gross proceeds derived from the sale of a utility used by a grain drying and storage facility are exempt from the gross receipts tax levied by this chapter, and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. A utility sold for a purpose other than the purposes stated in subdivision (b)(1) of this section is subject to the full gross receipts tax levied by this chapter, and the full compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
3. 1. A utility subject to the exemption provided under this section shall be separately metered from a utility used for any other purpose by the taxpayer.
  2. However, the rules promulgated under subsection (e) of this section may establish additional or alternate requirements for the metering of utilities under this section.
4. Before allowing the exemption of a utility under this section, the Secretary of the Department of Finance and Administration may require a seller of a utility to obtain a certificate from the taxpayer in the form prescribed by the secretary, certifying that the taxpayer is eligible for the exemption.
5. The secretary shall promulgate rules for the proper administration of this section.
1. The taxes levied under §§ 26-52-301 and 26-52-302 on the gross receipts or gross proceeds from the sale of the following are subject to a refund as provided in this section:
  1. Machinery and equipment purchased to modify, replace, or repair, either in whole or in part, existing machinery or equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at a manufacturing or processing plant or facility in this state;
  2. Service relating to the initial installation, alteration, addition, cleaning, refinishing, replacement, or repair of machinery or equipment described in subdivision (a)(1) of this section; and
  3. Machinery and equipment purchased to modify, replace, or repair, either in whole or in part, existing molds and dies used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at a manufacturing or processing plant or facility in this state.
2. 1. Beginning July 1, 2014, the taxes levied under §§ 26-52-301 and 26-52-302 that are subject to a refund under this section are the taxes in excess of four and seven-eighths percent (4.875%).
  2. The taxes levied under §§ 26-52-301 and 26-52-302 that are subject to a refund under this section are the taxes in excess of the following rates:
    1. Beginning July 1, 2018, three and seven-eighths percent (3.875%);
    2. Beginning July 1, 2019, two and seven-eighths percent (2.875%);
    3. Beginning July 1, 2020, one and seven-eighths percent (1.875%); and
    4. Beginning July 1, 2021, seven-eighths percent (0.875%).
  3. Beginning July 1, 2022, sales qualifying for the tax refund under this section are exempt from the taxes levied under this chapter.
3. The excise tax of one-eighth of one percent (1/8 of 1%) levied in Arkansas Constitution, Amendment 75, and the temporary excise tax of one-half percent (0.5%) levied in Arkansas Constitution, Amendment 91, are not subject to refund under this section.
4. As used in this section:
  1. “Manufacturing” or “processing” means the same as defined under § 26-52-402(b) and includes activities described in subsection (a) of this section, both independently and collectively; and
  2. “Used directly” means the same as defined under § 26-52-402(c).
5. All existing excise tax exemptions, including without limitation exemptions under §§ 26-52-402 and 26-53-114, remain in full force and effect and are not limited by this section.
6. A taxpayer may claim the benefit of the tax refund under this section only by using one (1) of the following methods:
  1. 1. Both:
      1. Obtaining a direct pay or a limited direct pay sales and use tax permit from the Department of Finance and Administration; and
      2. Self-refunding:
        
        At the time the taxpayer files his or her original sales and use tax report; or
        
        By later filing an amended sales or use tax report with the department.
    2. The statutes of limitation stated in § 26-18-306 apply to claims made under this subdivision (f)(1).
    3. Interest shall not accrue or be paid on a refund claimed under this subdivision (f)(1); or
  2. 1. Beginning July 1, 2018, for a taxpayer that does not hold a direct pay or limited direct pay permit, holds an active Arkansas sales and use tax permit, and files sales and use tax reports with the department, filing a claim for a credit or rebate with the department.
    2. 1. The credit or rebate authorized under this subdivision (f)(2) shall be obtained only by offsetting the amount of the claimed credit or rebate against the state tax to be remitted with the taxpayer's sales and use tax reports.
      2. If the total amount of the credit or rebate authorized under this subdivision (f)(2) is greater than the amount of the state tax to be remitted with the taxpayer's sales and use tax reports, the taxpayer is entitled to a refund of the difference between the amount of the tax owed and the amount of the credit or rebate authorized under this subdivision (f)(2).
    3. A taxpayer claiming a credit or rebate under this subdivision (f)(2) shall electronically file all sales and use tax reports.
    4. A claim for credit or rebate under this subdivision (f)(2) shall not be paid for a claim filed more than one (1) year following the date of the qualifying sale or more than one (1) year following the date of payment, whichever is later.
    5. Interest shall not accrue or be paid on an amount subject to a claim for a credit or rebate under this subdivision (f)(2).
7. A claim for a credit or rebate shall not be paid under subdivision (f)(2) of this section for a sale made before July 1, 2018.
8. A taxpayer shall not claim the benefit of the refund under this section by filing a verified claim for refund with the department.
9. The following provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq., apply to claims for a refund under this section:
  1. The time limitations that apply to claims for a refund of an overpayment of state tax; and
  2. The procedures that apply to the disallowance or proposed disallowance of claims for a refund.
1. The gross receipts or gross proceeds derived from the sale of a dental appliance to or by a dentist, orthodontist, oral surgeon, maxillofacial surgeon, or endodontist are exempt from the gross receipts tax levied by this chapter, and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. As used in this section, “dental appliance” means a dental device that is made for a specific patient, including without limitation a dental implant, orthodontic appliance, retainer, crown, bridge, or denture.
1. The gross receipts or gross proceeds from the sale of tangible personal property, specified digital products, a digital code, or a service to a nonprofit blood donation organization are exempt from the gross receipts tax levied by this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. As used in this section, “nonprofit blood donation organization” means an organization described in 26 U.S.C. § 501(c)(3), as it existed on January 1, 2013, that is:
  1. Operated wholly or in part for the purpose of obtaining, collecting, separating, treating, testing, storing, processing, preparing for transfusing, furnishing, donating, or distributing human blood or parts or fractions of single blood units or products derived from single blood units; and
  2. Registered as a blood establishment with the United States Food and Drug Administration.
1. As used in this section:
  1. “Aquaculture” means the active cultivation of domesticated fish;
  2. “Domesticated fish” means fish that are spawned, grown, managed, harvested, and marketed on an annual, semiannual, biennial, or short-term basis in waters that are confined within a pond, tank, or lake that is situated entirely on the premises of a single owner and that, except under abnormal flood conditions, are in no way connected by water or with any other:
    1. Flowing stream or body of water; or
    2. Body of water not situated on the premises of the owner;
  3. 1. “Horticulture” means the initial production and cultivation of fruits, vegetables, tree nuts, trees, shrubs, vines, and florist stock.
    2. “Horticulture” does not include the cultivation of fruits, vegetables, tree nuts, trees, shrubs, vines, and florist stock at a retail or wholesale facility from which the items are sold;
  4. “Qualifying agricultural structure” means the following:
    1. A poultry or livestock facility used for commercial production, including without limitation a broiler or turkey grow-out house, laying house, hatching unit, nursery unit, breeding house, farrowing unit, and feed-out house;
    2. A cattle and dairy facility, including without limitation a milking parlor, milk collection unit, and refrigeration unit; and
    3. A greenhouse used for commercial production;
  5. “Qualifying aquaculture or horticulture equipment” means:
    1. A cooling unit, collection unit, or irrigation equipment used in a commercial horticulture operation;
    2. Equipment used to pump and aerate a pond used in a commercial aquaculture operation; and
    3. A holding and sorting tank used in a commercial aquaculture operation; and
  6. “Utility” means the following:
    1. Electricity;
    2. Liquefied petroleum gas; and
    3. Natural gas.
2. 1. Beginning January 1, 2014, the gross receipts or gross proceeds derived from the sale of a utility used by the following are exempt from the gross receipts tax levied by this chapter, and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.:
    1. A qualifying agricultural structure used for a commercial purpose; and
    2. Qualifying aquaculture or horticulture equipment operated for a commercial purpose.
  2. A utility sold for any purpose other than the purposes stated in subdivision (b)(1) of this section is subject to the full gross receipts tax levied by this chapter, and the full compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
3. 1. A utility subject to the exemption provided under this section shall be separately metered from a utility used for any other purpose by the taxpayer.
  2. However, the rules promulgated under subsection (e) of this section may establish additional or alternate requirements for the metering of utilities under this section.
4. Before allowing the exemption of a utility under this section, the Secretary of the Department of Finance and Administration may require a seller of a utility to obtain a certificate from the taxpayer in the form prescribed by the secretary, certifying that the taxpayer is eligible for the exemption.
5. The secretary shall promulgate rules for the proper administration of this section.
1. The gross receipts or gross proceeds derived from the sale of an aircraft within the state are exempt from the gross receipts tax levied under this chapter and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., if the aircraft is sold by a:
  1. Person that is the resident of another state to a purchaser that:
    1. Is a resident of another state; and
    2. Will base the aircraft outside of the State of Arkansas; or
  2. Seller located in this state and the aircraft that is sold:
    1. Has a certified maximum take-off weight of more than nine thousand five hundred pounds (9,500 lbs.); and
    2. Will be based outside of the State of Arkansas, notwithstanding the fact that possession of the aircraft may be taken in this state for the sole purpose of removing the aircraft from the state under its own power.
  3. As used in this subsection, “maximum take-off weight” means the maximum gross weight due to design or operational limitations at which an aircraft is permitted to take off.
2. The fact that a purchaser takes possession of an aircraft in this state does not prevent the application of the exemption provided in this section if the purchaser takes possession of the aircraft for the sole purpose of:
  1. Removing the aircraft from this state under its own power; or
  2. Locating the aircraft at a maintenance facility in this state for the time period necessary to complete maintenance or modifications to the aircraft if the aircraft is removed from this state upon completion of the maintenance or modifications.
1. 1. The tax levied under this chapter shall be due and payable on the first day of each month, except as provided in this subchapter, by any person liable for the payment of any tax due under this chapter.
  2. When a taxpayer becomes liable to file a report with the Secretary of the Department of Finance and Administration, the taxpayer must continue to file the report, even though no tax is due, until such time as the taxpayer notifies the secretary, in writing, that the taxpayer is no longer liable for the report.
2. 1. For the purpose of ascertaining the amount of tax payable under this chapter, it shall be the duty of all taxpayers on or before the twentieth day of each month to deliver to the secretary, upon forms prescribed and furnished by the secretary, returns showing the total tax due derived from all taxable sales during the preceding calendar month.
  2. The returns shall show such further information as the secretary may require to enable the secretary to compute correctly and collect the tax levied.
  3. Whether an individual, corporation, partnership, limited liability company, or other entity, every taxpayer shall file a single report combining all taxes due derived from sales made from all Arkansas locations of the taxpayer's business which are registered and permitted with the secretary under the same federal employer's identification number or Social Security number.
3. In addition to the information required on returns, the secretary may request and the taxpayer must furnish any information deemed necessary for a correct computation of the tax levied.
4. The tax shall be computed by multiplying the tax rate by the amount of the total combined gross receipts or gross proceeds derived from all taxable sales during the preceding month without regard to the amount that may be allocated to gross receipts tax on the taxpayer's books of account.
5. The taxpayer shall compute and remit to the secretary the required tax due for the preceding calendar month, with the remittance of the tax to accompany the returns required in this subchapter.
6. The return and remittances by the taxpayer as required in subsections (a)-(e) of this section shall not be construed to constitute an assessment of the tax.
7. 1. If not paid on or before the twentieth of that month, the tax shall be delinquent from that date.
  2. However, no penalty for delinquency shall be assessed if payment is made on or before the first day of the month next following.
8. When the average amount of tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed one hundred dollars ($100) per month, the secretary may notify the taxpayer that a quarterly report and remittance in lieu of a monthly report may be made on or before July 20, October 20, January 20, and April 20 of each year for the preceding three-month period.
9. When the average amount of tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed twenty-five dollars ($25.00) per month, the secretary may notify the taxpayer that a yearly report and remittance in lieu of a monthly report may be made on or before January 20 of each year for the preceding twelve-month period.
10. The secretary may establish by rule separate requirements for filing reports and returns and paying the tax levied under this chapter for taxpayers whose principal line of business does not include the retail selling of tangible personal property, specified digital products, or a digital code or performing taxable services.
11. A person that collects a tax under this chapter shall remit the tax to the state in accordance with this subchapter.
1. Any person taxable under this chapter doing business wholly or partly on a credit basis may make application to the Secretary of the Department of Finance and Administration for permission to prepare his or her returns on the basis of cash actually received.
2. The application shall be granted by the secretary under such rules as the secretary may prescribe.
3. Any person making the application shall be taxable on all moneys collected during the taxable period.
1. At the time of transmitting the returns required under this chapter to the Secretary of the Department of Finance and Administration, the taxpayer shall remit with the returns to the secretary ninety-eight percent (98%) of the state tax due under this chapter and ninety-eight percent (98%) of the city and county gross receipts taxes collected by the secretary.
2. Failure of the taxpayer to remit the tax on or before the twentieth day of the applicable month shall cause the taxpayer to forfeit his or her claim to the discount, and the taxpayer shall remit to the secretary one hundred percent (100%) of the amount of tax plus any penalty and interest due.
3. 1. 1. The discount for early payment of state tax shall not exceed one thousand dollars ($1,000) per month for a taxpayer filing monthly gross receipts tax reports.
    2. A taxpayer filing a tax report on a quarterly, annual, or occasional basis is entitled to the discount for early payment of state tax, which shall not exceed one thousand dollars ($1,000) for each month included in the tax report.
  2. 1. The aggregate state tax discount available to a taxpayer who operates more than one (1) permitted business location within this state and who does not file a consolidated monthly gross receipts tax report for all locations shall not exceed one thousand dollars ($1,000) per month.
    2. In the case of a corporate taxpayer that is a parent corporation and that holds fifty percent (50%) or more of the outstanding shares of one (1) or more corporations that are subsidiaries and that are subject to the tax imposed by this chapter, the aggregate state tax discount available to the parent corporation and all subsidiaries shall not exceed one thousand dollars ($1,000) per month.
    3. The limitations on the state tax discount under this section apply to early payment of city and county gross receipts taxes collected by the secretary, under the following schedule:
      1. For the tax year beginning January 1, 2018, the discount shall not exceed five thousand dollars ($5,000);
      2. For the tax year beginning January 1, 2019, the discount shall not exceed four thousand dollars ($4,000);
      3. For the tax year beginning January 1, 2020, the discount shall not exceed three thousand dollars ($3,000);
      4. For the tax year beginning January 1, 2021, the discount shall not exceed two thousand dollars ($2,000); and
      5. For tax years beginning on and after January 1, 2022, the discount shall not exceed one thousand dollars ($1,000).
1. Every person selling new or used aircraft in this state, whether from an established business, under a dealership, as a flying service, or as a private individual, shall obtain and hold a permit as provided in § 26-52-202 and shall make a monthly report and remittance to the Secretary of the Department of Finance and Administration as provided in this chapter, together with copies of invoices, sales tickets, or bills of sale reflecting the date of all sales of aircraft, the purchaser's name and address, the make, year, model, serial number, and gross sales price of each aircraft, and the amount of tax collected from the purchaser.
2. When a used aircraft is taken in trade as a credit or part payment on the sale of a new or used aircraft, the tax levied by this chapter and all other gross receipts taxes levied by the state shall be paid on the net difference between the total consideration for the new or used aircraft sold and the credit for the used aircraft taken in trade. However, if the total consideration for the sale of the new or used aircraft is less than two thousand dollars ($2,000), no tax shall be due.
3. However, the gross receipts or gross proceeds derived from the sale of new aircraft manufactured or substantially completed within the State of Arkansas shall not be subject to the gross receipts tax when sold by the manufacturer or substantial completer to a purchaser for use exclusively outside this state, notwithstanding the fact that possession may be taken in the state for the sole purpose of removing the aircraft from the state under its own power.
1. One performing taxable labor for another person who holds a retailer's permit shall not be required to collect and remit sales tax on the labor when the labor is to be charged to, and the sales tax collected from, the ultimate consumer.
2. The intent of this section is that labor, under the aforementioned circumstance, be given wholesale status, and that the sales tax on labor be collected only one (1) time by the retailer who collects it from his or her customer.
1. The gross receipts tax levied by this state shall be due and collected by a florist who transmits an order by telegraph, telephone, or other means of communication for flowers, floral arrangements, potted plants, or any other article common to the florist business for delivery to any other place within or without this state.
2. The gross receipts tax collected by the florist transmitting the order by telegraph, telephone, or other means of communication shall be the only tax collected on that order regardless of whether the order originated within or without this state.
3. The destination sourcing rules in § 26-52-521 do not apply to the florist transmitting the order by telegraph, telephone, or other means of communication.
1. The tax levied by this chapter shall be paid to the Secretary of the Department of Finance and Administration by:
  1. The seller of tangible personal property, specified digital products, or a digital code;
  2. The seller or collector of admissions to places of amusement, recreational, or athletic events;
  3. The seller of privileges of access to or the use of amusement, entertainment, athletic, or recreational facilities; and
  4. Any other person furnishing any service subject to the provisions of this chapter.
2. The taxes, penalty, and interest shall at all times constitute a prior, superior, and paramount claim as against the claims of unsecured creditors.
3. The seller or person furnishing the taxable service shall collect the tax levied from the purchaser.
4. 1. No tax is due on admission to a place of amusement, entertainment, recreation, or an athletic event for which no consideration is paid.
  2. No tax is due on the access to or the use of an amusement, entertainment, athletic, or recreational facility for which no consideration is paid.
1. 1. The Secretary of the Department of Finance and Administration by agreement with any consumer or user may:
    1. Permit a consumer or user under the agreement to accrue and remit gross receipts taxes directly to the Department of Finance and Administration, instead of the taxes being collected and paid by the seller under § 26-52-508; and
    2. 1. Issue limited direct pay authority to permit a user or consumer to accrue and remit gross receipts and compensating use taxes on purchases that include eligible purchases.
      2. A limited direct pay agreement permits a consumer or user to accrue and remit gross receipts and compensating use taxes on purchases that include eligible purchases.
        
        As used in this section, “eligible purchases” means property or services subject to a refund of tax under §§ 26-52-447 and 26-53-149.
      3. A limited direct pay agreement is available only to a person eligible for a refund of tax under §§ 26-52-447 and 26-53-149.
        
        A person holding a limited direct pay permit shall use the permit only to make purchases that include eligible purchases.
  2. 1. A seller that receives a claim for exemption from a customer based on a limited direct pay permit shall not collect and remit gross receipts or compensating use taxes on purchases that include eligible purchases made by a person holding a limited direct pay permit.
    2. However, if a seller collects and remits gross receipts or compensating use taxes on eligible purchases from a person holding a limited direct pay permit, a refund may be obtained under § 26-18-507.
  3. A person who has entered into a limited direct pay agreement under this section and makes purchases of property or services under the authority of that agreement without paying the gross receipts or compensating use taxes due on those purchases is responsible for remitting the proper amount of tax due to the secretary as required by law.
  4. 1. A seller shall collect and remit gross receipts and compensating use taxes on purchases made by a person holding a limited direct pay permit that are not eligible purchases.
    2. If a seller relies on the limited direct pay permit and fails to properly collect tax on sales other than eligible purchases, the limited direct pay permit holder shall remit the proper amount of tax to the state as required under subdivision (a)(3) of this section.
  5. This section does not eliminate the requirement that a consumer or user self-assess and remit compensating use tax under §§ 26-53-123 — 26-53-125.
2. The agreements may be revoked at any time by the secretary whenever the secretary determines that the revocation thereof should be in the best interests of collection of gross receipts taxes.
3. A consumer or user being permitted to report gross receipts taxes directly to the department shall not be entitled to any discount for any collection and shall be subject to all provisions of this chapter in the same manner as the taxpayer liable to remit taxes under this chapter.
4. This section is supplemental to this chapter.
1. 1. On or before the time for registration as prescribed by § 27-14-903(a), a consumer shall pay to the Secretary of the Department of Finance and Administration the tax levied by this chapter and all other gross receipts taxes levied by the state with respect to the sale of a new or used motor vehicle, trailer, or semitrailer required to be licensed in this state, instead of the taxes being collected by the dealer or seller.
  2. The secretary shall require the payment of the taxes at the time of registration before issuing a license for the new or used motor vehicle, trailer, or semitrailer.
  3. 1. The taxes apply regardless of whether the motor vehicle, trailer, or semitrailer is sold by a vehicle dealer or an individual, corporation, or partnership not licensed as a vehicle dealer.
    2. The exemption in § 26-52-401(17) for isolated sales does not apply to the sale of a motor vehicle, trailer, or semitrailer.
  4. If the consumer fails to pay the taxes when due:
    1. There is assessed a penalty equal to ten percent (10%) of the amount of taxes due; and
    2. The consumer shall pay to the secretary the penalty under subdivision (a)(4)(A) of this section and the taxes due before the secretary issues a license for the motor vehicle, trailer, or semitrailer.
2. 1. 1. Except as provided in this section, when a used motor vehicle, trailer, or semitrailer is taken in trade as a credit or part payment on the sale of a new or used motor vehicle, trailer, or semitrailer, the tax levied by this chapter and all other gross receipts taxes levied by the state shall be paid on the net difference between the total consideration for the new or used vehicle, trailer, or semitrailer sold and the credit for the used vehicle, trailer, or semitrailer taken in trade.
    2. However, if the total consideration for the sale of the new or used motor vehicle, trailer, or semitrailer is less than four thousand dollars ($4,000), no tax shall be due.
    3. 1. When a used motor vehicle, trailer, or semitrailer is sold by a consumer, rather than traded-in as a credit or part payment on the sale of a new or used motor vehicle, trailer, or semitrailer, and the consumer subsequently purchases a new or used vehicle, trailer, or semitrailer of greater value within forty-five (45) days of the sale, the tax levied by this chapter and all other gross receipts taxes levied by the state shall be paid on the net difference between the total consideration for the new or used vehicle, trailer, or semitrailer purchased subsequently and the amount received from the sale of the used vehicle, trailer, or semitrailer sold in lieu of a trade-in.
      2. Upon registration of the new or used motor vehicle, a consumer claiming the deduction provided by subdivision (b)(1)(C)(i) of this section shall provide a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle.
        
        A copy of the bill of sale shall be deposited with the revenue office at the time of registration of the new or used motor vehicle.
        
        The deduction provided by this section shall not be allowed unless the taxpayer claiming the deduction provides a copy of a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle.
      3. If the taxpayer claiming the deduction provided in this section fails to provide a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle, tax shall be due on the total consideration paid for the new or used vehicle, trailer, or semitrailer without any deduction for the value of the item sold.
  2. 1. 1. When a motor vehicle dealer removes a vehicle from its inventory and the vehicle is used by the dealership as a service vehicle, the dealer shall register the vehicle, obtain a certificate of title, and pay sales tax on the listed retail price of the new vehicle.
      2. When the motor vehicle dealer returns the service vehicle to inventory as a used vehicle and replaces it with a new vehicle for dealership use as a service vehicle, the dealer shall pay sales tax on the difference between the listed retail price of the new service vehicle to be used by the dealership and the value of the used service vehicle being returned to inventory.
        
        The value of the used service vehicle shall be the highest listed wholesale price reflected in the most current edition of the National Automobile Dealers Association's Official Used Car Guide.
    2. 1. As used in this subsection, “service vehicle” means a motor vehicle driven exclusively by an employee of the dealership and used either to transport dealership customers or dealership parts and equipment.
      2. “Service vehicle” does not include motor vehicles which are rented by the dealership, used as demonstration vehicles, used by dealership employees for personal use, or used to haul or pull other vehicles.
3. All parts and accessories purchased by motor vehicle sellers for resale or used by them for the reconditioning or rebuilding of used motor vehicles intended for resale are exempt from gross receipts tax, provided that the motor vehicle seller meets the requirements of § 26-52-401(12)(A) and applicable rules promulgated by the secretary.
4. Nothing in this section shall be construed to repeal any exemption from this chapter.
5. A credit is not allowed for sales or use taxes paid to another state with respect to the purchase of a motor vehicle, trailer, or semitrailer that was first registered by the purchaser in Arkansas.
6. 1. 1. Any motor vehicle dealer licensed pursuant to § 27-14-601(a)(6) who has purchased a used motor vehicle upon payment of all applicable registration and title fees may register the vehicle for the sole purpose of obtaining a certificate of title to the vehicle without payment of gross receipts tax, except as provided in subdivision (f)(1)(B) of this section.
    2. 1. The sale of a motor vehicle from the original franchise dealer to any other dealer, person, corporation, or other entity other than a franchise dealer of the same make of vehicle and which sale is reflected on the statement of origin shall be subject to gross receipts tax.
      2. The vehicle shall be considered a used motor vehicle which shall be registered and titled, and tax shall be paid at the time of registration.
      3. The provisions of subdivision (f)(1)(A) of this section shall not apply in those instances.
  2. No license plate shall be provided with the registration, and the used vehicle titled by a dealer under this subsection may not be operated on the public highways unless there is displayed on the used vehicle a dealer's license plate issued under the provisions of § 27-14-601(a)(6)(B)(ii).
7. 1. 1. For purposes of this section, the total consideration for a used motor vehicle shall be presumed to be the greater of the actual sales price as provided on the bill of sale, invoice or financing agreement, or the average loan value price of the vehicle as listed in the most current edition of a publication which is generally accepted by the industry as providing an accurate valuation of used vehicles.
    2. If the published loan value exceeds the invoiced price, then the taxpayer must establish to the secretary's satisfaction that the price reflected on the invoice or other document is true and correct.
    3. If the secretary determines that the invoiced price is not the actual selling price of the vehicle, then the total consideration will be deemed to be the published loan value.
  2. 1. For purposes of this section, the total consideration for a new or used trailer or semitrailer shall be the actual sales price as provided on a bill of sale, invoice, or financing agreement.
    2. The secretary may require additional information to conclusively establish the true selling price of the new or used trailer or semitrailer.
1. A person who purchases a prepaid funeral contract may pay gross receipts taxes on the tangible personal property purchased in the prepaid funeral contract on the date the prepaid funeral contract is purchased in lieu of paying the taxes at the time of the person's death.
2. The rate of the tax shall be the gross receipts tax rate in effect pursuant to this chapter at the time the prepaid funeral contract is purchased.
3. Each prepaid funeral contract shall state the following: “ALL SALES TAXES DUE UNDER THE ARKANSAS GROSS RECEIPTS ACT OF 1941 WHICH ARE NOT PAID IN FULL AS OF THE DATE OF THIS CONTRACT ARE DUE UPON THE DEATH OF THE INDIVIDUAL FOR WHOM THIS CONTRACT IS PURCHASED.”.
1. All retailers within the State of Arkansas registered to collect the Arkansas gross receipts tax and having average net sales of more than two hundred thousand dollars ($200,000) per month for the preceding calendar year shall make prepayment of sales tax by electronic funds transfer, as defined in § 26-19-101, according to one (1) of the following payment options:
  1. 1. The taxpayer may elect to make two (2) tax payments by electronic funds transfer for the current calendar month. Each payment shall be equal to forty percent (40%) of the tax due on the monthly average net sales on or before the twelfth and twenty-fourth of each month.
    2. The balance of actual collections for the month shall be remitted with the monthly gross receipts tax report due by the twentieth day of the following month; or
  2. 1. The taxpayer may elect to pay by electronic funds transfer an amount equal to or exceeding eighty percent (80%) of the gross receipts tax liability for the current calendar month on or before the twenty-fourth of each month.
    2. The balance of actual collections for the month shall be remitted with the monthly gross receipts tax report due by the twentieth day of the following month.
2. 1. 1. Every taxpayer who timely remits the prepayments required by subsection (a) of this section and who timely files and pays the taxpayer's monthly gross receipts tax report shall be entitled to a discount.
    2. The discount shall be the lesser of two percent (2%) of the reported monthly gross tax, or one thousand dollars ($1,000).
  2. 1. Failure to pay tax prepayments when due shall result in the assessment of a penalty equal to five percent (5%) of the amount of each required tax prepayment.
    2. If a taxpayer elects to prepay according to subdivision (a)(2) of this section and fails to pay eighty percent (80%) of the tax liability by the twenty-fourth of the current month, no penalty shall be assessed if the taxpayer proves that more than twenty percent (20%) of the taxpayer's tax liability arose from sales occurring after the twenty-fourth of the current month but before the last day of the current month.
  3. 1. The aggregate discount available to a taxpayer who operates more than one (1) permitted business location within this state and who does not file a consolidated monthly gross receipts tax report for all locations shall not exceed one thousand dollars ($1,000) per month.
    2. In the case of a corporate taxpayer that is a parent corporation and that holds fifty percent (50%) or more of the outstanding shares of one (1) or more corporations that are subsidiaries and that are subject to the tax imposed by this chapter, the aggregate discount available to the parent corporation and all subsidiaries shall not exceed one thousand dollars ($1,000) per month.
3. 1. For any electronic funds transfer or report required under subsection (a) of this section, the due date of which falls on a Saturday, Sunday, or legal holiday, the electronic funds transfer or report shall be made on the next succeeding business day that is not a Saturday, Sunday, or legal holiday.
  2. If the Federal Reserve Bank is closed on a due date that prohibits a taxpayer from being able to make a payment through electronic funds transfer, the payment shall be accepted as timely if made on the next day the Federal Reserve Bank is open.
  3. A report filed in conjunction with a remittance that cannot be made due to the closure of the Federal Reserve Bank shall be accepted as timely if filed in conjunction with the payment on the next day the Federal Reserve Bank is open.
4. As used in this section, “average net sales” means total gross proceeds or gross receipts as defined in this chapter less any deductions allowed by this chapter.
1. When any person engaged in the business of selling motor vehicles, motorcycles, motor-driven cycles, three-wheeled all-terrain vehicles, four-wheeled all-terrain vehicles, six-wheeled all-terrain vehicles, or motorized bicycles, sells any motorcycle or motor-driven cycle that is designed or manufactured exclusively for competition or off-road use, or sells any three-wheeled all-terrain vehicle, four-wheeled all-terrain vehicle, six-wheeled all-terrain vehicle, or motorized bicycle, the person shall collect and remit the taxes at the same time and in the same manner as other gross receipts taxes collected by the person.
2. However, nothing in this section shall be construed so as to affect the manner in which state and local taxes are collected on motorcycles and motor-driven cycles registered for use on the streets and highways of this state.
1. The Secretary of the Department of Finance and Administration is authorized to adopt an alternative method for determining the total consideration for the sale of new or used:
  1. Manufactured homes, mobile homes, or modular homes under § 26-52-801 et seq.;
  2. Aircraft under § 26-52-505; and
  3. Motor vehicles, trailers, or semitrailers under §§ 26-52-510 and 26-53-126.
2. 1. The alternative method adopted shall incorporate any generally accepted method of determining the value of the item being sold.
  2. If the consideration stated by the parties to the sale is less than the value determined by the generally accepted method of valuation, then for purposes of taxation it shall be presumed that the higher figure is the total consideration, unless the taxpayer provides a contract, bill of sale, or other evidence establishing that the true consideration is less than the value determined under the alternative method.
1. The Secretary of the Department of Finance and Administration shall refund to a manufacturer any state and local sales or use tax which the manufacturer refunded to the consumer, lessee, or lessor pursuant to the Arkansas New Motor Vehicle Quality Assurance Act, § 4-90-401 et seq., or other defective vehicle buy-back agreement, if the manufacturer provides to the Department of Finance and Administration:
  1. A written request for a refund in accordance with § 26-18-507;
  2. Evidence that the sales tax was paid when the vehicle was registered;
  3. Assignment of the tax refund by the taxpayer;
  4. Proof that the manufacturer refunded the sales tax to the consumer, lessee, or lessor; and
  5. Such other information as shall be required by the secretary.
2. Claims for refund of sales or use tax under this section shall be subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq. Any claim must be made in writing and filed within three (3) years from the date the vehicle was first registered.
3. 1. When a consumer has tendered a trade-in vehicle toward the purchase of the vehicle which is refunded under the Arkansas New Motor Vehicle Quality Assurance Act, § 4-90-401 et seq., or other defective vehicle buy-back agreement, the consumer may apply to the secretary for a voucher in the amount of the trade-in vehicle's consideration.
  2. The secretary shall prescribe the forms and other information necessary to issue the voucher.
  3. In calculating the sales tax due upon registration of a subsequent replacement vehicle, the voucher shall be used to reduce the sales price of the subsequent replacement vehicle.
  4. The voucher shall be valid for six (6) months from the date of issuance and may only be used by the consumer to whom it was issued.
1. A business which operates, or contracts for the operation of, a childcare facility for the primary purpose of providing childcare services to its employees may obtain a refund of the gross receipts tax paid on the purchase of construction materials and furnishings used in the initial construction and equipping of the childcare facility after the facility is licensed pursuant to the Childcare Facility Licensing Act, § 20-78-201 et seq., and is certified as having an appropriate early childhood program pursuant to § 6-45-109.
2. 1. As used in this section, “childcare facility” means a childcare facility licensed under the Childcare Facility Licensing Act, § 20-78-201 et seq. To qualify as a childcare facility, the childcare facility shall provide an appropriate early childhood program as defined in § 6-45-103.
  2. A childcare facility may be operated for the use of one (1) or more employers.
1. The sales tax liability for all sales of tangible personal property, specified digital products, digital codes, and taxable services is upon the seller unless the purchaser claims an exemption and the seller obtains identifying information of the purchaser and the reason the purchaser is claiming the exemption in the manner prescribed by the Secretary of the Department of Finance and Administration.
2. 1. When tangible personal property, specified digital products, a digital code, or taxable services are purchased tax-free under subsection (a) of this section and the tangible personal property, specified digital products, digital code, or taxable service is not resold by the purchaser, the purchaser is solely liable for reporting and remitting to the secretary any tax which should have been paid at the time of purchase.
  2. Use or disposition of the property other than for resale shall be deemed a withdrawal from stock for all purposes, including reporting and remittance of the tax due, and the tax shall be due from the purchaser at the time of the withdrawal from stock.
3. 1. The secretary may provide sale for resale certificates to assist retailers in properly accounting for nontaxable sales of tangible personal property or taxable services.
  2. Such certificates must be completed as to the information required in order to be valid and cannot be used to establish any other exemption from sales or use tax.
4. 1. A seller may accept a blanket exemption certificate from a purchaser with which the seller has a recurring business relationship.
  2. A seller is not required to renew blanket exemption certificates or update exemption certificate information or data elements when there is a recurring business relationship between the purchaser and seller.
  3. A recurring business relationship exists when a period of no more than twelve (12) months elapses between sales transactions.
5. A seller that follows the exemption requirements as prescribed by the secretary is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption.
6. The relief from liability provided in subsection (e) of this section does not apply to a seller that:
  1. Fraudulently fails to collect the sales tax;
  2. Solicits a purchaser to participate in the unlawful claim of an exemption; or
  3. Accepts an exemption certificate from a purchaser claiming an entity-based exemption if:
    1. The subject of the transaction sought to be covered by the exemption certificate is actually received by the purchaser at a location operated by the seller; and
    2. The Department of Finance and Administration provides an exemption certificate that clearly and affirmatively indicates that the claimed exemption is not available in Arkansas.
7. 1. A seller may obtain a fully completed exemption certificate or capture the relevant data elements required by the department within ninety (90) days after the date of sale.
  2. 1. If the seller has not obtained an exemption certificate or all relevant data elements and the department makes a request for substantiation of the exemption, the seller has one hundred twenty (120) days from the date of the request to prove by other means that the transaction was not subject to sales or use tax or to obtain in good faith a fully completed exemption certificate from the purchaser.
    2. As used in this subsection, “good faith” means that the seller obtains a certificate that claims an exemption that:
      1. Was statutorily available on the date of the transaction in the jurisdiction where the transaction is sourced;
      2. Could be applicable to the item being purchased; and
      3. Is reasonable for the purchaser's type of business.
1. As used in this section:
  1. “Person” means a person as defined in § 26-52-103;
  2. “Promoter” or “organizer” means a person who organizes or promotes a special event which results in the rental, occupation, or use of any structure, lot, tract of land, motor vehicle, sample or display case, table, or any other similar items for the exhibition and sale of tangible personal property by special events vendors;
  3. 1. “Special event” means an entertainment, amusement, recreation, or marketing event which occurs at a single location on an irregular basis and where tangible personal property is sold.
    2. The special events shall include, but are not limited to:
      1. Auto shows;
      2. Boat shows;
      3. Gun shows;
      4. Knife shows;
      5. Home shows;
      6. Craft shows;
      7. Flea markets;
      8. Carnivals;
      9. Circuses;
      10. Bazaars;
      11. Fairs; and
      12. Art or other merchandise displays or exhibits.
    3. The special events shall not include any county, district, or state fair or the four states livestock show that has been approved, pursuant to the rules of the Arkansas Livestock and Poultry Commission, to receive state funds; and
  4. “Special event vendor” means a person making sales of tangible personal property at a special event within the State of Arkansas and who is not permitted under § 26-52-201 et seq.
2. 1. Special event vendors shall collect sales tax from purchasers of tangible personal property, specified digital products, or a digital code and remit the tax daily, along with a daily sales tax report, to the promoter or organizer.
  2. The isolated sale exemption found in § 26-52-401(17) shall not apply to sales of tangible personal property, specified digital products, or a digital code at special events.
3. Promoters or organizers of special events shall register for sales tax collection with the Secretary of the Department of Finance and Administration and shall provide to special event vendors special event sales tax reporting forms and any other information which may be required by the secretary.
4. Special event vendors shall file daily special event sales tax reports with organizers or promoters during the special event and remit daily sales tax due along with the daily report.
5. Within thirty (30) days following the conclusion of the special event, the organizer or promoter shall forward all daily reports and payments to the Department of Finance and Administration along with a completed sales tax report combining all taxable sales and sales tax due.
6. 1. Promoters and organizers shall not be liable for unreported taxes of special event vendors.
  2. Promoters and organizers shall be liable for their failure to remit to the secretary sales taxes which are remitted to them by special event vendors.
  3. Promoters and organizers shall be subject to applicable penalty and interest impositions.
1. When a consumer has paid sales taxes on a motor vehicle within the last one hundred eighty (180) days and the motor vehicle is destroyed or damaged by some catastrophic event resulting from a natural cause to the extent that the value of the motor vehicle is less than thirty percent (30%) of its retail value, as found in the National Automobile Dealers Association's Official Price Guide, or other source approved by the Office of Motor Vehicle, the consumer may apply to the Secretary of the Department of Finance and Administration for a sales tax credit voucher in the amount of any state and local sales or use taxes paid on the motor vehicle transaction, if the consumer provides to the Department of Finance and Administration:
  1. A written request for a credit voucher in accordance with § 26-18-507;
  2. Evidence that the sales tax was paid when the motor vehicle was registered;
  3. Evidence as to the extent of the destruction or damage to the value of the motor vehicle which is satisfactory to the department to prove the value of the motor vehicle prior to the event and the value after the destruction or damage occurred;
  4. Evidence that the catastrophic event occurred within one hundred eighty (180) days of the motor vehicle's being first registered; and
  5. Any other information as shall be required by the secretary as necessary to issue the voucher.
2. Claims for credit vouchers of sales or use tax under this section shall be subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq. Any claim must be made in writing and filed within one (1) year from the date the vehicle was first registered.
3. When a consumer has tendered a trade-in motor vehicle toward the purchase of the vehicle which is credited under subsection (a) of this section, the consumer may apply to the secretary for a credit voucher in the amount of the trade-in vehicle's consideration also.
4. The sales and use tax credit vouchers issued under this section shall be used only to reduce any sales and use taxes due upon registration of a subsequent replacement vehicle. In no event shall a cash refund be given for the sales tax credit voucher or for any excess value of the credit voucher. The credit voucher shall be valid for six (6) months from the date of issuance and may only be used by the consumer to whom it was issued.
5. The secretary shall prescribe the forms, the nature of satisfactory proof of the vehicle's values, and any other information as is necessary to issue the credit vouchers under this section.
6. As used in this section, “natural cause” means an act occasioned exclusively by the violence of nature in which all human agency is excluded from creating or entering into the cause of the damage or injury.
1. As used in this section, “such property” means communication equipment or other property installed on commercial trucks or used by the owner to track the location of the truck and to send, receive, or process information to or from the truck.
2. It is the intent of the General Assembly that the State of Arkansas should not pursue collection of any claim now pending or the execution of any court order with respect to any such claim for the collection of sales or compensating use taxes upon such property.
3. No taxpayer shall have a claim against the State of Arkansas for any sales of compensating use tax previously paid to the State of Arkansas with respect to such property, except for taxes paid under protest on or after July 1, 1996.
1. 1. This section applies for purposes of determining a seller's obligation to pay or collect and remit a sales or use tax with respect to the seller's retail sale of a product or service.
  2. This section does not affect the obligation of a purchaser or lessee to remit tax on the use of the product or service to the taxing jurisdictions of that use and does not apply to the sales or use taxes levied on the retail sale excluding lease or rental, of motor vehicles, trailers, or semitrailers that require licensing.
2. Excluding a lease or rental, the retail sale of a product or service shall be sourced as follows:
  1. If the product or service is received by the purchaser at a business location of the seller, the sale is sourced to that business location;
  2. If the product or service is not received by the purchaser at a business location of the seller, the sale is sourced to the location where receipt by the purchaser or the purchaser's designated donee occurs, including the location indicated by instructions for delivery to the purchaser or donee known to the seller;
  3. If subdivisions (b)(1) and (2) of this section do not apply, the sale is sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller's business when use of this address does not constitute bad faith;
  4. If subdivisions (b)(1)-(3) of this section do not apply, the sale is sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser's payment instrument, if no other address is available if the use of this address does not constitute bad faith; or
  5. If none of the previous rules of subdivisions (b)(1)-(4) of this section apply, including the circumstance in which the seller is without sufficient information to apply the previous rules, the location will be determined by the address from which tangible personal property was shipped, from which the specified digital products or the digital code was first available for transmission by the seller, or from which the service was provided, disregarding for these purposes any location that merely provided the digital transfer of the product sold.
3. The lease or rental of tangible personal property, specified digital products, or a digital code other than property identified in subsection (d) or subsection (e) of this section shall be sourced as follows:
  1. 1. For a lease or rental that requires recurring periodic payments, the first periodic payment is sourced the same as a retail sale in accordance with the provisions of subsection (b) of this section.
    2. Periodic payments made after the first payment are sourced to the primary property location for each period covered by the payment.
    3. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business if use of this address does not constitute bad faith.
    4. The property location shall not be altered by intermittent use at different locations such as use of business property that accompanies employees on business trips and service calls;
  2. For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of subsection (b) of this section; and
  3. This subsection does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump-sum or accelerated basis or on the acquisition of property for lease.
4. The lease or rental of motor vehicles, trailers, semitrailers, or aircraft that do not qualify as transportation equipment as defined in subsection (e) of this section shall be sourced as follows:
  1. 1. For a lease or rental that requires recurring periodic payments, each periodic payment is sourced to the primary property location.
    2. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business if use of this address does not constitute bad faith.
    3. This location shall not be altered by intermittent use at different locations;
  2. For a lease or rental that does not require recurring periodic payments, the payment is sourced the same as a retail sale in accordance with the provisions of subsection (b) of this section; and
  3. This subsection does not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis or on the acquisition of property for lease.
5. 1. Including a lease or rental, the retail sale of transportation equipment shall be sourced the same as a retail sale in accordance with the provisions of subsection (b) of this section, notwithstanding the exclusion of a lease or rental in subsection (b) of this section.
  2. As used in this section, “transportation equipment” means any of the following:
    1. Locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce;
    2. Trucks and truck tractors with a gross vehicle weight rating of ten thousand one pounds (10,001 lbs.) or greater, trailers, semitrailers, or passenger buses that are:
      1. Registered through the International Registration Plan, Inc.; and
      2. Operated under authority of a carrier authorized and certificated by the United States Department of Transportation or another federal authority to engage in the carriage of persons or property in interstate commerce;
    3. Aircraft that are operated by air carriers authorized and certificated by the United States Department of Transportation or another federal or a foreign authority to engage in the carriage of persons or property in interstate or foreign commerce; or
    4. Containers designed for use on and component parts attached or secured on the items under subdivision (e)(1) of this section and this subdivision (e)(2).
6. As used in subsection (b) of this section:
  1. “Receive” and “receipt” mean:
    1. Taking possession of tangible personal property, specified digital products, or a digital code; or
    2. Making first use of services; and
  2. “Receive” and “receipt” do not include possession by a shipping company on behalf of the purchaser.
7. When a motor vehicle, trailer, or semitrailer that requires licensing is sold to a person who resides in Arkansas, the sale is sourced to the residence of the purchaser.
8. This section shall apply to all state and local taxes administered by the Department of Finance and Administration.
9. The destination sourcing rules in this section do not apply to florists.
1. As used in this section:
  1. “Advertising and promotional direct mail” means direct mail in which the primary purpose is to attract attention to a product, person, business, or organization or to attempt to sell, popularize, or secure financial support for a product, person, business, or organization;
  2. “Direct mail form” means:
    1. A Streamlined Sales and Use Tax Agreement certificate of exemption claiming direct mail, as in effect on January 1, 2011; or
    2. A written statement approved, authorized, or accepted by the state;
  3. 1. “Jurisdictional information” means information sufficient for the seller to source the sale of taxable printing services resulting in advertising and promotional direct mail to the state and local jurisdictions in which the printed materials are delivered or distributed to recipients.
    2. Jurisdictional information must be in a form in which the information can be retained and retrieved by the seller for the purpose of sales and use tax reporting.
    3. Access to a database that contains address information or a mailing list provided by the purchaser or a third party that does not allow the seller to retain and retrieve the jurisdictional information identifying jurisdictions where the advertising and promotional direct mail was delivered does not constitute receiving information showing the jurisdictions to which the advertising and promotional direct mail is delivered;
  4. 1. “Other direct mail” means any direct mail that is not advertising and promotional direct mail regardless of whether advertising and promotional direct mail is included in the same mailing and includes without limitation:
      1. Transactional direct mail that contains personal information specific to the addressee, including without limitation invoices, bills, statements of account, and payroll advices;
      2. Any legally required mailings, including without limitation privacy notices, tax reports, and stockholder reports; and
      3. Other nonpromotional direct mail delivered to existing or former shareholders, customers, employees, or agents, including without limitation newsletters and informational pieces.
    2. “Other direct mail” does not include the development of billing information or the provision of any data processing service that is more than incidental; and
  5. “Product” means tangible personal property, specified digital products, a digital code, a product transferred electronically, or a service.
2. The sale of a taxable printing service resulting in the production and distribution of advertising and promotional direct mail or other direct mail shall be sourced in accordance with this section.
3. 1. The seller shall source the sale of taxable printing service resulting in the production and distribution of advertising and promotional direct mail according to § 26-52-521(b)(5), unless the purchaser provides the seller with a direct pay permit, direct pay form, exemption certificate, or jurisdictional information.
  2. If the purchaser provides jurisdictional information to the seller, then the seller shall source the sale of the taxable printing service to the jurisdictions to which the advertising and promotional direct mail is to be delivered.
4. The seller shall source the sale of taxable printing services resulting in the production and distribution of other direct mail according to § 26-52-521(b)(3), unless the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate.
5. When both advertising and promotional direct mail and other direct mail are combined in a single mailing, the sale is sourced as other direct mail.
6. If a bundled transaction includes advertising and promotional direct mail, this section applies only if the primary purpose of the transaction is the sale of products or services that meet the definition of advertising and promotional direct mail.
7. 1. In the absence of bad faith, the seller is relieved of any further obligation to collect any additional sales or use tax on the sale of advertising and promotional direct mail where the seller has sourced the sale according to the jurisdictional information provided by the purchaser.
  2. In the absence of bad faith, the seller is relieved of all obligations to collect, pay, or remit sales or use tax if the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate.
8. 1. If the purchaser provides the seller with a direct pay permit, direct pay form, or exemption certificate, then the purchaser shall source the sale to the jurisdictions to which the advertising and promotional direct mail or other direct mail is to be delivered to the recipients and shall report and pay any applicable sales or use tax due.
  2. Purchasers may use a reasonable summary or allocation of the distribution to the jurisdictions to which the advertising and promotional direct mail or other direct mail is delivered for the purposes of self-assessing and directly paying sales or use tax.
  3. This section does not limit any purchaser's:
    1. Obligation for sales or use tax to any state to which the direct mail is delivered;
    2. Right under local, state, federal, or constitutional law to a credit for sales or use taxes legally due and paid to other jurisdictions; or
    3. Right to a refund of sales or use taxes overpaid to any jurisdiction.
1. As used in this section:
  1. “Qualifying purchase” means a purchase of tangible personal property, specified digital products, a digital code, or a taxable service:
    1. For which the purchaser may take a business expense deduction pursuant to 26 U.S.C. § 162, as in effect on January 1, 2007;
    2. For which the purchaser may take a depreciation deduction pursuant to 26 U.S.C. § 167, as in effect on January 1, 2007;
    3. By an exempt organization under 26 U.S.C. § 501, as in effect on January 1, 2007, if the purchase would be subject to a business expense deduction or depreciation deduction if the purchaser were not an exempt organization under 26 U.S.C. § 501, as in effect on January 1, 2007; or
    4. By a state or a county, city, municipality, school district, state-supported college or university, or any other political subdivision of a state if the purchase would be subject to a business expense deduction or depreciation deduction if the purchaser were not one of the entities enumerated in this subdivision (a)(1)(D);
  2. “Single transaction” means a sale of tangible personal property, specified digital products, a digital code, or a taxable service reflected on a single invoice, receipt, or statement for which an aggregate sales or use tax amount has been reported and remitted to the state for a single local taxing jurisdiction; and
  3. “Travel trailer” means a trailer that:
    1. Provides temporary living quarters for travel, recreation, or camping;
    2. Includes a chassis having wheels and a trailer hitch or fifth wheel for towing; and
    3. Is required to be licensed for highway use under Arkansas law.
2. 1. A purchaser that pays any municipal sales or use tax in excess of the tax due on the first two thousand five hundred dollars ($2,500) of gross receipts or gross proceeds from the purchase of a travel trailer or from a qualifying purchase of tangible personal property, specified digital products, a digital code, or a taxable service in a single transaction is entitled to a credit or rebate of the excess amount of municipal sales or use tax paid on each single transaction.
  2. A purchaser that pays any county sales or use tax in excess of the tax due on the first two thousand five hundred dollars ($2,500) of gross receipts or gross proceeds from the purchase of a travel trailer or from a qualifying purchase of tangible personal property, specified digital products, a digital code, or a taxable service in a single transaction is entitled to a credit or rebate of the excess amount of county sales or use tax paid on each single transaction.
3. 1. A purchaser that is required by § 26-52-501, § 26-52-509, or § 26-53-125 to file a sales or use tax return may file a claim for a credit or rebate under this section with the Secretary of the Department of Finance and Administration in connection with the sales or use tax return and offset the amount of credit or rebate claimed against any municipal or county sales or use tax due to be remitted with the return.
  2. A purchaser that qualifies for a credit or rebate under this section and is not required to file a sales or use tax return as provided in subdivision (c)(1) of this section may file a claim for a credit or rebate under this section with the secretary.
  3. If a rebate would be due under this section as a result of the purchase of a travel trailer and if the gross receipts or compensating use tax on the travel trailer is collected directly from the purchaser by the Department of Finance and Administration under § 26-52-510 or § 26-53-126, then the department shall collect only the amount of tax due less the amount to which the purchaser would be entitled under the rebate provisions of this section.
4. A credit or rebate under this section shall not be paid for a claim filed more than one (1) year following the date of the qualifying purchase or more than one (1) year following the date of payment, if later.
5. A claim for a credit or rebate under this section shall be filed with the local taxing jurisdiction if, at the time the claim is filed, the local sales or use tax that is the subject of the claim has been out of existence for more than sixty (60) days.
6. No interest shall accrue or be paid on an amount subject to a claim for a credit or rebate under this section.
7. The secretary may promulgate rules to administer this section, including without limitation providing an administratively feasible method for filing a claim for a credit or rebate and any necessary forms.
8. This section does not apply to a local sales tax levied in accordance with § 26-52-303 or § 26-75-502.
9. Except as provided in subsection (h) of this section, this section applies to any local sales or use tax collected by the secretary pursuant to any state tax law authorizing a county or municipality to levy a sales or use tax.
1. 1. In the passage of this subchapter, the General Assembly is cognizant of the inequities faced by cities and towns in this state and their inhabitants when the cities and towns are divided by a state line from an incorporated city or town in another state in which the tax burden of the citizens of the city or town in the adjoining state is substantially less than the tax burden imposed by the laws of this state upon the citizens of a border city or town in this state.
  2. The General Assembly is also cognizant that these tax inequities offer inducements to citizens who would otherwise settle in Arkansas and operate businesses in Arkansas to move to the border cities in the adjoining states.
2. The passage of this subchapter is designed to establish a method of equalizing the inequities imposed under the tax laws of this state, thereby offering inducements to persons to establish their homes and businesses in the Arkansas border city or town.
1. The governing body of an Arkansas border city or town, as described in § 26-52-602, by ordinance, may call a special election, or, upon petition of not less than ten percent (10%) of the qualified electors of the Arkansas border city or town, as determined by the number of votes cast in the Arkansas border city or town for all candidates for election to the Office of Governor of Arkansas in the immediately preceding general election, filed with the city clerk of the city or town petitioning that a special election be called, a special election shall be called in accordance with § 7-11-201 et seq. in the city or town on the question of the imposition of an additional state tax of one percent (1%) to be administered and collected as a local sales tax upon the gross receipts or gross proceeds derived from taxable sales within the border city or town under the provisions of this chapter, and the proceeds derived therefrom shall benefit the State of Arkansas in lieu of the state income tax law applying to the net taxable income derived by individuals who are residents of the border city or town.
2. The special election shall be called not later than one hundred twenty (120) days following the adoption of the ordinance by the governing body of the city or town, or the filing of a petition requesting the special election.
3. Notice of the special election shall be given by publication in some newspaper of general circulation within the Arkansas border city or town on two (2) occasions not more than thirty (30) days and not less than ten (10) days prior to the date of the special election.
4. The special election shall be held by the county board of election commissioners, and the special election judges and clerks shall be selected and the special election shall be conducted and the results shall be tabulated and certified in the manner now provided by law for the holding of elections in this state.
5. On the ballot shall be printed the following issue:
6. The voter shall cast the vote of his or her choice by placing an “X” opposite the issue of his or her choice.
1. 1. In the event a majority of the qualified electors of the Arkansas border city or town voting on the issue at the election vote FOR the imposition of an additional one percent (1%) gross receipts tax on taxable sales in the border city or town, then the additional one percent (1%) tax shall be levied effective January 1 next following the date of the election and thereafter.
  2. For as long as the additional one percent (1%) gross receipts tax is levied in the city, individuals who are residents of the city shall not be subject to the imposition of the Arkansas income tax, as levied by the Income Tax Act of 1929, § 26-51-101 et seq.
2. If a majority of the qualified electors of the Arkansas border city or town shall vote AGAINST the levy of an additional one percent (1%) gross receipts tax in lieu of payment of the state income tax in the city, then the citizens of the city or town shall continue to pay state gross receipts tax and state income tax, as provided by law.
1. Whether from an established business or by a licensed retailer, every person selling manufactured homes or modular homes in this state shall obtain a permit and report and remit to the Secretary of the Department of Finance and Administration as provided in this chapter, together with:
  1. Copies of invoices, sales, tickets, or bills of sale reflecting the dates of all sales of the new manufactured homes or modular homes;
  2. The purchaser's name and address;
  3. The make, year, model, serial number, and acquisition price of each manufactured home or modular home; and
  4. If applicable, the amount of tax collected from the purchaser.
2. Upon the initial sale of a new manufactured home or modular home, the tax levied by this chapter shall be collected on sixty-two percent (62%) of the acquisition price of the new manufactured home or modular home.
3. No tax shall be due on the sale of a mobile home or on a subsequent sale of a manufactured home or modular home, including any tax levied by this chapter or any other gross receipts tax levied by the state.
1. Any permittee who fraudulently attempts to evade any provision of this section or of this chapter shall be subject to having his or her permit revoked after notice and hearing provided in § 26-52-209.
2. 1. Upon payment of all applicable registration and title fees, any manufactured home retailer licensed pursuant to § 27-14-601(a)(6) that makes a subsequent purchase of a manufactured home for which the seller does not have a certificate of title may register the manufactured home for the sole purpose of obtaining a certificate of title.
  2. No license plate or decal shall be provided with the registration.
1. To claim the benefits of this subchapter, a taxpayer must obtain a certification from the Director of the Arkansas Economic Development Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer:
  1. Operates a steel mill in Arkansas which began production after February 16, 1987; and
  2. Has invested, after February 16, 1987, in excess of one hundred twenty million dollars ($120,000,000) in the steel mill, which investment expenditure is for one (1) of the following:
    1. Property purchased for use in the construction of a building or buildings or any addition or improvement thereon to house the steel mill;
    2. 1. Machinery and equipment to be located in or in connection with the steel mill.
      2. Motor vehicles of a type subject to registration shall not be considered as machinery and equipment; or
    3. Project planning costs or construction labor costs, including on-site direct labor and supervision, whether employed by a contractor or the project owner; architectural fees or engineering fees, or both; right-of-way purchases; utility extensions; site preparation; parking lots; disposal or containment systems; water and sewer treatment systems; rail spurs; streets and roads; purchase of mineral rights; land; buildings; building renovation; production, processing, and testing equipment; freight charges; building demolition; material handling equipment; drainage systems; water tanks and reservoirs; storage facilities; equipment rental; contractor's cost plus fees; builders risk insurance; original spare parts; job administrative expenses; office furnishings and equipment; rolling stock; capitalized start-up costs as recognized by generally accepted accounting principles; and other costs related to the construction.
2. As used in subdivision (a)(2)(C) of this section, “production, processing, and testing equipment” includes machinery and equipment essential for the receiving, storing, processing, and testing of raw materials and the production, storage, testing, and shipping of finished products, including facilities for the production of steam, electricity, chemicals, and other materials that are essential to the manufacturing process, but which are consumed in the manufacturing process and do not become essential components of the finished product.
3. To claim the benefits of § 26-52-903, a taxpayer must be certified before July 1, 1989, pursuant to subsection (a) of this section or obtain a certification before July 1, 1989, from the Director of the Arkansas Economic Development Commission certifying to the division that the taxpayer meets the definition of “qualified manufacturer of steel” contained in § 26-52-901.
1. The administration of this subchapter is vested in and shall be exercised by the Secretary of the Department of Finance and Administration.
2. The administration cost of this subchapter shall not exceed three percent (3%) of the actual revenues collected.
1. The Secretary of the Department of Finance and Administration shall promulgate rules and prescribe forms for the proper enforcement of this subchapter.
2. 1. The rules and forms shall be dated and issued under a systematic method of numbering, and copies shall be made available to any person requesting them.
  2. A complete file of all the rules and forms shall be kept in the office of the secretary.
1. There is levied and there shall be collected from every person in this state a tax or excise for the privilege of storing, using, distributing, or consuming within this state tangible personal property, specified digital products, a digital code, or a taxable service purchased for storage, use, distribution, or consumption in this state at the rate of three percent (3%) of the sales price of the tangible personal property, specified digital products, digital code, or taxable service except for food and food ingredients that are taxed under § 26-53-145.
2. This tax does not apply with respect to the storage, use, distribution, or consumption of tangible personal property, specified digital products, or a digital code purchased, produced, or manufactured outside this state until the transportation of the tangible personal property, specified digital products, or digital code has finally come to rest within this state or until the tangible personal property, specified digital products, or digital code has become commingled with the general mass of property of this state.
3. This tax applies to use, storage, distribution, or consumption of tangible personal property, specified digital products, a digital code, or taxable service except as provided in this subchapter irrespective of whether the tangible personal property, similar articles of tangible personal property, specified digital products, digital code, or the taxable service is manufactured within the State of Arkansas, is available for purchase within the State of Arkansas, or any other condition.
4. 1. 1. For the purpose of the proper administration of this subchapter and to prevent evasion of the tax and the duty to collect the tax imposed in this section, it is presumed that tangible personal property, specified digital products, a digital code, or taxable services sold by any vendor for delivery in this state or transportation to this state are sold for storage, use, distribution, or consumption in this state unless the vendor selling the tangible personal property, specified digital products, digital code, or taxable service has taken from the purchaser a resale certificate signed by and bearing the name, address, and sales tax permit number of the purchaser certifying that the property or taxable service was purchased for resale, except that sales made electronically shall not require the purchaser's signature.
    2. The use by the purchaser of a resale certificate and any resulting liability for, or exemption from, use tax in a transaction involving a resale certificate shall be governed in all respects by the terms of § 26-52-517.
  2. It is further presumed that tangible personal property, specified digital products, a digital code, or taxable services shipped, mailed, expressed, transported, or brought to this state by the purchaser were purchased from a vendor for storage, use, distribution, or consumption in this state.
1. 1. In addition to the excise tax levied upon the privilege of storing, using, distributing, or consuming tangible personal property, specified digital products, a digital code, and taxable services within this state by this subchapter, there is levied an excise tax of one percent (1%) upon all tangible personal property, specified digital products, digital codes, and taxable services subject to the tax levied in this subchapter except for food and food ingredients that are taxed under § 26-53-145.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of state compensating taxes.
2. 1. In addition to the excise tax levied upon the privilege of storing, using, distributing, or consuming tangible personal property, specified digital products, a digital code, and taxable services within the state by this subchapter, there is levied an excise tax of one-half of one percent (0.5%) upon all tangible personal property, specified digital products, digital codes, and taxable services subject to the tax levied in this subchapter except for food and food ingredients that are taxed under § 26-53-145.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of Arkansas compensating taxes.
3. 1. There is levied an additional excise tax of one-half of one percent (0.5%) upon all tangible personal property, specified digital products, digital codes, and taxable services subject to the tax levied by this subchapter except for food and food ingredients that are taxed under § 26-53-145.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by this subchapter for the collection, reporting, and payment of Arkansas compensating taxes.
4. 1. There is levied an additional excise tax of seven-eighths of one percent (0.875%) upon all tangible personal property, specified digital products, digital codes, and taxable services subject to the tax levied by this subchapter except for food and food ingredients that are taxed under § 26-53-145.
  2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by this subchapter for the collection, reporting, and payment of Arkansas compensating taxes.
1. For the following public carriers, a state compensating tax of three percent (3%) of the gross purchase price is levied on the tangible personal property of:
  1. Motor carriers, consisting of tractors, trailers, semitrailers, trucks, buses, and other rolling stock, including replacement tires, used directly in the transportation of persons or property in intrastate or interstate common carrier transportation;
  2. Railroads, except fuel consumed in the operation of railroad rolling stock;
  3. Pipelines, consisting of transmission lines and pumping or pressure control equipment used directly in or connected to the primary pipeline facility engaged in intrastate or interstate common carrier transportation of property; and
  4. Airlines, consisting of airplanes and navigation instruments used directly in or becoming a part of flight aircraft engaged in transportation of persons or property in regular scheduled intrastate or interstate common carrier transportation.
2. For public telephone and telegraph companies, a state compensating tax of three percent (3%) of the gross purchase price is levied on tangible personal property consisting of exchange equipment, lines, boards, and all accessory devices used directly in and connected to the primary facility engaged in transmission of messages.
3. For the following public utilities, a state compensating tax of three percent (3%) of the gross purchase price is levied on the tangible personal property of:
  1. Gas companies, consisting of transmission and distribution pipelines and pumping or pressure control equipment used in connection with transmission and distribution pipelines that are used directly in the primary pipeline facility for the purpose of transporting and delivering natural gas;
  2. Water companies, consisting of transmission and distribution lines, pumping machinery and controls used in connection with transmission and distribution lines, and cleaning or treating equipment of a primary water distribution system; and
  3. Public electric power companies, consisting of all machinery and equipment, including reactor cores, related accessory devices used in the generation and production of electric power and energy, and transmission facilities consisting of the lines, including poles, towers, and other supporting structures, transmitting electric power and energy with substations located on and attached to the lines.
1. There is specifically exempted from the taxes levied in this subchapter:
  1. 1. Only to the extent that the machinery and equipment is purchased and used for the purposes set forth in this subdivision (a)(1), machinery and equipment used directly in the producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in the State of Arkansas, including facilities and plants for manufacturing feed, processing of poultry and eggs and livestock, and the hatching of poultry.
    2. The machinery and equipment will be exempt under this section if it is purchased and used to create new manufacturing or processing plants or facilities within this state or to expand existing manufacturing or processing plants or facilities within this state;
  2. 1. Machinery purchased to replace existing machinery in its entirety and used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging of articles of commerce at manufacturing or processing plants or facilities in this state will be exempt under this section.
    2. 1. As used in subdivision (a)(2)(A) of this section, “machinery purchased to replace existing machinery” means that substantially all of the machinery and equipment required to perform an essential function is physically replaced with new machinery.
      2. As used in subdivision (a)(2)(B)(i) of this section, “substantially” is intended to exclude routine repairs and maintenance and partial replacements that do not improve efficiency or extend the useful life of the entire machine, but it is not intended to mean that foundations and minor components which can be economically adapted, rebuilt, or refurbished must be completely replaced when replacement would be more expensive or impracticable than adapting, rebuilding, or refurbishing the old foundation and minor components; and
  3. 1. Machinery and equipment required by state or federal law, rules, or regulations to be installed and utilized by manufacturing or processing plants or facilities, cities, or towns in this state to prevent or reduce air or water pollution or contamination that might otherwise result from the operation of the plant, facility, city, or town.
    2. As used in this subdivision (a)(3), “machinery and equipment required by state or federal law, rules, or regulations to be installed and utilized by manufacturing and processing plants or facilities” includes:
      1. Machinery and equipment required by state or federal law, rules, or regulations to be used in the refining of petroleum-based products to remove sulfur pollutants from the refined product; and
      2. Any repair parts and repair labor for machinery or equipment required by state or federal law, rules, or regulations to be used in the refining of petroleum-based products to remove sulfur pollutants from the refined product.
2. As used in this section, “manufacturing” or “processing” refers to and includes those operations commonly understood within their ordinary meaning and shall also include:
  1. Mining;
  2. Quarrying;
  3. Refining;
  4. Extracting oil and gas;
  5. Cotton ginning;
  6. Drying of rice, soybeans, and other grains;
  7. Manufacturing of feed;
  8. Processing of poultry and eggs and the hatching of poultry;
  9. Printing of all kinds, types, and characters, including the services of overprinting and photographic processing incidental to printing;
  10. Processing of scrap metal into grades and bales for further processing into steel and other metals;
  11. Rebuilding or remanufacturing of used parts and retreading of tires for automobiles, trucks, and other mobile equipment powered by electrical or internal combustion engines or motors if the rebuilt or remanufactured parts or retreaded tires are not sold directly to the consumer but are sold for resale; and
  12. Producing of protective coatings which increase the quality and durability of a finished product.
3. 1. It is the intent of this section to exempt only such machinery and equipment as shall be used directly in the actual manufacturing or processing operation at any time from the initial stage when actual manufacturing or processing begins through the completion of the finished article of commerce and the packaging of the finished end product.
  2. As used in this section, “directly” is used to limit the exemption to only the machinery and equipment used in actual production during processing, fabricating, or assembling raw materials or semifinished materials into the form in which the personal property is to be sold in the commercial market.
  3. For purposes of this subsection, the following definitions, specific inclusions, and specific exclusions shall apply and represent the intent of the General Assembly as to its interpretation of the term “used directly”:
    1. 1. Machinery and equipment used in actual production include machinery and equipment that meet all other applicable requirements and which cause a recognizable and measurable mechanical, chemical, electrical, or electronic action to take place as a necessary and integral part of manufacturing, the absence of which would cause the manufacturing operation to cease.
      2. “Directly” does not mean that the machinery and equipment must come into direct physical contact with any of the materials that become necessary and integral parts of the finished product.
      3. Machinery and equipment which handle raw, semifinished, or finished materials or property before the manufacturing process begins are not used directly in the manufacturing process.
      4. Machinery and equipment which are necessary for purposes of storing the finished product are not used directly in the manufacturing process.
      5. Machinery and equipment used to transport or handle product while manufacturing is taking place are used directly;
    2. Further, machinery and equipment used directly in the manufacturing process includes without limitation the following:
      1. Molds, frames, cavities, and forms that determine the physical characteristics of the product or its packaging materials at any stage of the manufacturing process;
      2. Dies, tools, and devices attached to or part of a unit of machinery that determine the physical characteristics of the product or its packaging material at any stage of the manufacturing process;
      3. Testing equipment to measure the quality of the product at any stage of the manufacturing process;
      4. Computers and related peripheral equipment that directly control or measure the manufacturing process; and
      5. Machinery and equipment that produce steam, electricity, or chemical catalysts and solutions that are essential to the manufacturing process but which are consumed during the course of the manufacturing process and do not become necessary and integral parts of the finished product;
    3. Machinery and equipment “used directly” in the manufacturing process shall not include the following:
      1. Hand tools;
      2. Machinery, equipment, and tools used in maintaining and repairing any type of machinery and equipment;
      3. Transportation equipment, including conveyors, used solely before or after the manufacturing process has been started or completed;
      4. Office machines and equipment including computers and related peripheral equipment not directly used in controlling or measuring the manufacturing process;
      5. Buildings;
      6. Machinery and equipment used in administrative, accounting, sales, or other such activities of the business;
      7. All furniture;
      8. All other machinery and equipment not used directly in manufacturing or processing operations as defined in this section; and
      9. Machinery and equipment used by a manufacturer to produce or repair replacement dies, molds, repair parts or replacement parts, used or consumed in the manufacturer's own manufacturing process.
4. The Secretary of the Department of Finance and Administration may promulgate rules for the orderly and efficient administration of this section.
1. The tax levied in this subchapter shall not apply to aircraft, aircraft equipment, and railroad parts, cars, and equipment, or to tangible personal property owned or leased by aircraft, airmotive, or railroad companies brought into the State of Arkansas solely and exclusively for:
  1. Refurbishing, conversion, or modification within this state and which is not used or intended for use in this state, and the presence of such tangible personal property within this state shall not be construed as storage, use, or consumption in this state for the purpose of this subchapter if the aircraft, aircraft equipment, and railroad parts, cars, and equipment, or tangible personal property is removed from this state within sixty (60) days from the date of the completion of the refurbishing, conversion, or modification; or
  2. Storage for use outside or inside the State of Arkansas regardless of the length of time any such property is so stored in the State of Arkansas.
2. If any such property is subsequently initially used in the State of Arkansas, the tax levied by this subchapter shall be and become applicable to the property so used in Arkansas.
3. The General Assembly determines that it was not the intent of this subchapter to impose the compensating tax upon aircraft, aircraft equipment, and railroad parts, cars, and equipment or to any tangible personal property owned or leased by aircraft, airmotive, or railroad companies as provided in § 26-53-106 and as classified by this section.
1. The gross receipts or gross proceeds derived from the sale of motor fuel to the owner or operator of a motor bus operated on designated streets according to regular schedule under municipal franchise which is used for municipal transportation purposes shall be exempt from the tax levied in this subchapter.
2. However, it shall be unlawful for the owner or operator of a motor bus operating under municipal franchise as provided in this section to use any or permit the use of any motor fuel upon which the compensating tax has not been paid in any motor vehicle other than a motor bus operated on designated streets according to regular schedules under municipal franchise.
3. 1. Any owner or operator of a motor bus permitting motor fuel to be used in violation of this section shall be guilty of a violation and upon conviction shall be fined in an amount of not less than five hundred dollars ($500) nor more than five thousand dollars ($5,000).
  2. In addition to the fine in subdivision (c)(1) of this section, the owner or operator shall be liable to the State of Arkansas for a penalty of triple the amount of compensating tax due the State of Arkansas on any motor fuel upon which the compensating taxes have not been paid and which was used in violation of the provisions of this section.
1. All feedstuffs used in the commercial production of livestock or poultry in this state are exempt from the state compensating tax as levied by this subchapter.
2. As used in this section, “feedstuffs” means:
  1. Processed or unprocessed grains;
  2. Mixed or unmixed grains;
  3. Whole or ground hay;
  4. Whole or ground straw;
  5. Hulls, whether or not mixed with other materials; and
  6. All food supplements, whether or not nutritional or medicinal, including hormones, antibiotics, vitamins, minerals, and medications ingested by poultry or livestock.
1. Every person storing, using, distributing, or consuming in this state tangible personal property, specified digital products, a digital code, or taxable services purchased from a vendor shall be liable for the tax imposed by this subchapter, and the liability shall not be extinguished until the tax has been paid to this state.
2. However, a receipt from a vendor authorized by the Secretary of the Department of Finance and Administration under such rules as he or she may prescribe to collect the tax imposed given to the purchaser in accordance with the provisions of §§ 26-53-121 and 26-53-122 shall be sufficient to relieve the purchaser from further liability for the tax to which the receipt may refer.
1. 1. 1. Every vendor making a sale of tangible personal property, specified digital products, a digital code, or taxable services directly or indirectly for the purpose of storage, use, distribution, or consumption in this state shall collect the tax from the purchaser and give a receipt for the tangible personal property, specified digital products, digital code, or taxable services.
    2. Subdivision (a)(1)(A) of this section includes all out-of-state vendors who deliver merchandise and taxable services into Arkansas in their own conveyance when such merchandise or services will be stored, used, distributed, or consumed within this state.
    3. The sale of tangible personal property, specified digital products, a digital code, or taxable services shall be sourced according to §§ 26-52-521 — 26-52-523.
  2. The required amount of the tax collected by the vendor from the purchaser shall be displayed separately upon the check, sales slip, bill, receipt, or other evidence of sale.
  3. The processing of orders electronically, by fax, telephone, the internet, or other electronic ordering process, or the processing of orders by non-electronic means, by mail order, fax, telephone, or otherwise, does not relieve a vendor of responsibility for collection of the tax from the purchaser if both the following conditions exist:
    1. The vendor holds a substantial ownership interest, directly or through a subsidiary, in a retailer maintaining sales locations in Arkansas or is owned in whole or in substantial part by a retailer or by a parent or subsidiary of the retailer; and
    2. The vendor sells the same or a substantially similar line of products as the Arkansas retailer under the same or a substantially similar business name, or the facilities or employees of the Arkansas retailer are used to advertise or promote sales by the vendor to Arkansas purchasers.
  4. As used in this section, “substantial ownership interest” in an entity means that degree of ownership of equity interests in an entity that is not less than that degree of ownership specified by 26 U.S.C. § 267, as in effect on January 1, 2001, with respect to a person other than a director or officer.
2. Nothing in this section shall be construed to repeal any exemption from the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or this subchapter.
1. 1. 1. The tax imposed by this subchapter shall be due and payable to the Secretary of the Department of Finance and Administration monthly on or before the twentieth day of each month except as provided in this subchapter.
    2. When a taxpayer has become liable to file a report with the secretary, the taxpayer must continue to file a report, even though no tax is due, until the taxpayer notifies the secretary in writing that the taxpayer is no longer liable for those reports.
  2. Every vendor selling tangible personal property, specified digital products, a digital code, or taxable services for storage, use, distribution, or consumption in this state shall file with the secretary on or before the twentieth day of each month a sales and use tax return for the preceding monthly period in such form as may be prescribed by the secretary, showing:
    1. The total tax levied by this subchapter due on all tangible personal property, specified digital products, digital codes, or taxable services sold by the vendor during the preceding monthly period, the storage, use, distribution, or consumption of which is subject to the tax levied by this subchapter; and
    2. Such other information as the secretary may deem necessary for the proper administration of this subchapter.
  3. The return shall be accompanied by remittance of the amount of the tax required by this subchapter to be collected by the vendor during the period covered by the return.
  4. 1. A return shall be signed by the vendor or the vendor's duly authorized agent but need not be verified by oath.
    2. A return filed electronically does not need to be signed.
  5. 1. A vendor required to collect and remit Arkansas compensating use tax that has average net sales of more than two hundred thousand dollars ($200,000) per month for the preceding calendar year shall make prepayment of the compensating use tax by electronic funds transfer, as defined in § 26-19-101, according to one (1) of the following payment options:
      1. Making two (2) compensating use tax payments by electronic funds transfer for the current calendar month. Each payment shall be equal to forty percent (40%) of the compensating use tax due on the monthly average net sales on or before the twelfth and twenty-fourth of each month.
        
        The balance of actual collections for the month shall be remitted with the monthly excise tax report due by the twentieth day of the following month; or
      2. Paying by electronic funds transfer an amount equal to or exceeding eighty percent (80%) of the compensating use tax liability for the current calendar month on or before the twenty-fourth of each month.
        
        The balance of actual collections for the month shall be remitted with the monthly excise tax report due by the twentieth day of the following month.
    2. 1. Failure to pay compensating use tax prepayments when due shall result in the assessment of a penalty equal to five percent (5%) of the amount of each required compensating use tax prepayment.
      2. If a taxpayer elects to prepay according to subdivision (a)(5)(A)(ii) of this section and fails to pay eighty percent (80%) of the compensating use tax liability by the twenty-fourth of the current month, a penalty shall not be assessed if the taxpayer proves that more than twenty percent (20%) of the taxpayer's compensating use tax liability arose from sales occurring after the twenty-fourth of the current month but before the last day of the current month.
    3. For any electronic funds transfer or report required under subdivision (a)(5)(A) of this section, the due date of which falls on a Saturday, Sunday, legal holiday, or day the Federal Reserve Bank is closed, the electronic funds transfer or report shall be made on the next succeeding business day which is not a Saturday, Sunday, legal holiday, or day the Federal Reserve Bank is closed.
    4. As used in this subdivision (a)(5), “net sales” means total sales price or purchase price less any deductions allowed by this chapter.
2. 1. Every person purchasing tangible personal property, specified digital products, a digital code, or taxable services of which the storage, use, distribution, or consumption is subject to the tax levied by this subchapter and who has not paid the tax due with respect to the tangible personal property, specified digital products, digital code, or taxable services to a vendor registered in accordance with the provisions of §§ 26-53-121 and 26-53-122 shall file a return with the secretary on or before the twentieth day of each month for the preceding monthly period in such a form as may be prescribed by the secretary showing:
    1. The tax levied by this subchapter due on the tangible personal property, specified digital products, digital code, or taxable services purchased during the preceding monthly period; and
    2. Such other information as the secretary may deem necessary for the proper administration of this subchapter.
  2. The return shall be accompanied by a remittance of the amount of the tax required by this subchapter to be paid by the person purchasing the tangible personal property, specified digital products, digital code, or taxable services during the period covered by the return.
  3. 1. A return shall be signed by the person liable for the tax or the person's authorized agent but need not be verified by oath.
    2. A return filed electronically does not need to be signed.
3. A vendor that does not have a legal requirement to register under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or this subchapter and is not using a certified service provider or a certified automated system as defined under the Uniform Sales and Use Tax Administration Act, § 26-20-101 et seq., shall submit sales and use tax returns as follows:
  1. Upon registration, the secretary shall provide the vendor the required Arkansas returns;
  2. The vendor shall file a return any time within one (1) year of the month of initial registration, and future returns may be required on an annual basis in succeeding years; and
  3. In addition to the returns required in subdivision (c)(2) of this section, the vendor may be required to submit returns in the month following any month in which the vendor has accumulated state and local tax funds in the total amount of one thousand dollars ($1,000) or more.
4. 1. When the average amount of tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed one hundred dollars ($100) per month, the secretary may notify the taxpayer that a quarterly report and remittance in lieu of a monthly report may be made on or before July 20, October 20, January 20, and April 20 of each year for the preceding three-month period.
  2. When the average amount of tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed twenty-five dollars ($25.00) per month, the secretary may notify the taxpayer that a yearly report and remittance in lieu of a monthly report may be made on or before January 20 of each year for the preceding twelve-month period.
5. 1. Any report or remittance required under this section of which the due date falls on a Saturday, Sunday, or legal holiday shall be postmarked or transmitted on the next succeeding business day that is not a Saturday, Sunday, or legal holiday.
  2. If the Federal Reserve Bank is closed on a due date that prohibits a vendor from being able to make a remittance through electronic funds transfer, the remittance shall be accepted as timely if made on the next day the Federal Reserve Bank is open.
  3. A report filed in conjunction with a remittance that cannot be made due to the closure of the Federal Reserve Bank shall be accepted as timely if filed in conjunction with the payment on the next day the Federal Reserve Bank is open.
1. 1. Upon being registered in this state, a new or used motor vehicle, trailer, or semitrailer required to be licensed in this state is subject to the tax levied in this subchapter and all other use taxes levied by the state regardless of whether the motor vehicle, trailer, or semitrailer was purchased from a dealer or an individual.
  2. 1. On or before the time for registration as prescribed by § 27-14-903(a), the person making application to register the motor vehicle, trailer, or semitrailer shall pay the taxes to the Secretary of the Department of Finance and Administration instead of the taxes being collected by the dealer or individual seller.
    2. The secretary shall collect the taxes before issuing a license for the motor vehicle, trailer, or semitrailer.
  3. The exemption in § 26-52-401(17) for isolated sales does not apply to the sale of a motor vehicle, trailer, or semitrailer.
  4. If the person making application to register the motor vehicle, trailer, or semitrailer fails to pay the taxes when due:
    1. There is assessed a penalty equal to ten percent (10%) of the amount of taxes due; and
    2. The person making application to register the motor vehicle, trailer, or semitrailer shall pay to the secretary the penalty under subdivision (a)(4)(A) of this section and the taxes due before the secretary issues a license for the motor vehicle, trailer, or semitrailer.
2. 1. When a used motor vehicle, trailer, or semitrailer is taken in trade as a credit or part payment on the sale of a new or used vehicle, trailer, or semitrailer, the tax levied in this subchapter and all other use taxes levied by the state shall be paid on the net difference between the total consideration for the new or used vehicle, trailer, or semitrailer sold and the credit for the used vehicle, trailer, or semitrailer taken in trade.
  2. However, if the total consideration for the sale of the new or used motor vehicle, trailer, or semitrailer is less than four thousand dollars ($4,000), no tax shall be due.
  3. 1. When a used motor vehicle, trailer, or semitrailer is sold by a consumer, rather than traded in as a credit or part payment on the sale of a new or used motor vehicle, trailer, or semitrailer, and the consumer subsequently purchases a new or used vehicle, trailer, or semitrailer of greater value within forty-five (45) days of the sale, the tax levied by this chapter and all other gross receipts taxes levied by the state shall be paid on the net difference between the total consideration for the new or used vehicle, trailer, or semitrailer purchased subsequently and the amount received from the sale of the used vehicle, trailer, or semitrailer sold in lieu of a trade-in.
    2. 1. Upon registration of the new or used motor vehicle, consumers claiming the deduction provided by subdivision (b)(3)(A) of this section shall provide a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle.
      2. A copy of the bill of sale shall be deposited with the revenue office at the time of registration of the new or used motor vehicle.
      3. The deduction provided by this subdivision (b)(3) shall not be allowed unless the taxpayer claiming the deduction provides a copy of a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle.
    3. If the taxpayer claiming the deduction provided in this subdivision (b)(3) fails to provide a bill of sale signed by all parties to the transaction which reflects the total consideration paid to the seller for the vehicle, tax shall be due on the total consideration paid for the new or used vehicle, trailer, or semitrailer without any deduction for the value of the item sold.
3. The tax imposed by this subchapter shall not apply to a motor vehicle, trailer, or semitrailer to be registered by a bona fide nonresident of this state.
4. Nothing in this section shall be construed to repeal any exemption from this subchapter.
5. 1. Upon payment of all applicable registration and title fees, any motor vehicle dealer licensed pursuant to § 27-14-601(a)(6) who has purchased a used motor vehicle may register the vehicle for the sole purpose of obtaining a certificate of title to the vehicle without payment of use tax.
  2. No license plate shall be provided with the registration, and the used vehicle titled by a dealer under this subsection may not be operated on the public highways unless there is displayed on the used vehicle a dealer's license plate issued under the provisions of § 27-14-601(a)(6)(B)(ii).
6. 1. 1. For purposes of this section, the total consideration for a used motor vehicle shall be presumed to be the greater of the actual sales price as provided on a bill of sale, invoice or financing agreement, or the average loan value of the vehicle as listed in the most current edition of a publication which is generally accepted by the industry as providing an accurate valuation of used vehicles.
    2. If the published loan value exceeds the invoiced price, then the taxpayer must establish to the secretary's satisfaction that the price reflected on the invoice or other document is true and correct.
    3. If the secretary determines that the invoiced price is not the actual selling price of the vehicle, then the total consideration will be deemed to be the published loan value.
  2. 1. For purposes of this section, the total consideration for a new or used trailer or semitrailer shall be the actual sales price as provided on a bill of sale, invoice, or financing agreement.
    2. The secretary may require additional information to conclusively establish the true selling price of the new or used trailer or semitrailer.
1. In all suits brought in any of the courts of this state by the Secretary of the Department of Finance and Administration against any vendor for any violation of this subchapter, the suits shall be brought thereon in any courts of this state having jurisdiction of the subject matter.
2. 1. Every vendor shall designate with the Secretary of the Department of Finance and Administration an agent for service within this state for the purpose of enforcing this subchapter.
  2. If a vendor has not designated or shall fail to designate with the Secretary of the Department of Finance and Administration an agent for service within this state, then the Secretary of State shall be deemed the agent for service, or any agent or employee of the vendor within this state shall be deemed agent for service.
1. 1. 1. 1. This subchapter does not apply to tangible personal property, specified digital products, a digital code, or taxable services used, consumed, distributed, or stored in this state upon which a like tax equal to or greater than the tax imposed by this subchapter has been paid in another state.
      2. Proof of payment of such a tax shall be made according to the rules promulgated by the Secretary of the Department of Finance and Administration.
    2. If the amount of tax paid in another state is less than the amount of Arkansas compensating tax imposed on the property or services by this subchapter, then the taxpayer shall pay to the secretary an amount of Arkansas compensating tax sufficient to make the combined amount of tax paid in the other state and this state equal to the total amount of Arkansas compensating tax that would be due if no tax on the property or services had been paid to any other state.
  2. No credit shall be given under this section for taxes paid on the property or services in another state if that state does not grant credit for taxes paid on similar tangible personal property, specified digital products, digital codes, or services in this state.
2. The provisions of this section shall be cumulative to the provisions of this subchapter and shall not be construed as repealing or modifying any of the provisions of this subchapter.
3. A credit is not allowed for sales or use taxes paid to another state with respect to the purchase of a motor vehicle, trailer, or semitrailer that was first registered by the purchaser in Arkansas.
1. A business which operates, or contracts for the operation of, a childcare facility for the primary purpose of providing childcare services to its employees may obtain a refund of the compensating use tax paid on the purchase of construction materials and furnishings used in the initial construction and equipping of the childcare facility after the facility is licensed pursuant to the Childcare Facility Licensing Act, § 20-78-201 et seq.
2. 1. As used in this section, “childcare facility” means a childcare facility licensed under the Childcare Facility Licensing Act, § 20-78-201 et seq. To qualify as a childcare facility, the child care shall provide an appropriate early childhood program as defined in § 6-45-103.
  2. A childcare facility may be operated for the use of one (1) or more employers.
1. A contractor that purchases tangible personal property which becomes a recognizable part of a completed structure or improvement to real property and which is purchased for use or consumption in the performance of construction contracts shall be entitled to a rebate on any additional gross receipts tax or compensating use tax levied by the state or any city or county if:
  1. The construction contract for which the tangible personal property was purchased is entered into prior to the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax; and
  2. The contractor paid the additional gross receipts or compensating use tax to the seller.
2. As used in this section, “construction contract” means a contract to construct, manage, or supervise the construction, erection, or substantial modification of a building or other improvement or structure affixed to real property. “Construction contract” shall not mean a contract to produce tangible personal property.
3. The rebate provided by this section shall apply to tangible personal property purchased within five (5) years from the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax.
4. The rebate provided by this section shall not apply to cost-plus contracts which allow the contractor to pass any additional tax on to the principal as a part of the contractor's costs.
5. Interest shall not accrue or be paid on an amount subject to a claim for rebate pursuant to this section.
6. The Secretary of the Department of Finance and Administration shall promulgate rules and prescribe forms for claiming a rebate as provided by this section.
1. 1. Gross receipts or gross proceeds derived from the rental, sale, or repair of durable medical equipment prescribed by a physician, mobility enhancing equipment prescribed by a physician, a prosthetic device prescribed by a physician, and disposable medical supplies prescribed by a physician shall be exempt from all state and local sales and use taxes.
  2. This exemption shall apply only to durable medical equipment, mobility enhancing equipment, a prosthetic device, and disposable medical supplies sold to a specific patient pursuant to a prescription written before the sale.
2. As used in this section:
  1. “Disposable medical supplies” includes without limitation the following:
    1. Ostomy, urostomy, and colostomy supplies;
    2. Enemas, suppositories, and laxatives used in routine bowel care; and
    3. Disposable undergarments and linen savers;
  2. 1. “Durable medical equipment” means equipment, including repair and replacement parts for the equipment, that:
      1. Can withstand repeated use;
      2. Is primarily and customarily used to serve a medical purpose;
      3. Generally is not useful to a person in the absence of illness or injury;
      4. Is not worn in or on the body; and
      5. Is for home use.
    2. “Durable medical equipment” does not include mobility enhancing equipment;
  3. 1. “Mobility enhancing equipment” means equipment, including repair and replacement parts for the equipment, that:
      1. Is primarily and customarily used to provide or increase the ability to move from one place to another and that is appropriate for use either in a home or a motor vehicle;
      2. Is not generally used by a person with normal mobility; and
      3. Does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
    2. “Mobility enhancing equipment” does not include durable medical equipment;
  4. “Physician” means a person licensed under § 17-95-401 et seq.;
  5. “Prescription” means an order, formula, or recipe issued in any form and transmitted by an oral, written, electronic, or other means of transmission by a duly licensed physician or practitioner authorized to issue prescriptions under Arkansas law;
  6. 1. “Prosthetic device” means a replacement, corrective, or supportive device, including repair and replacement parts for the device, worn on or in the body to:
      1. Artificially replace a missing portion of the body;
      2. Prevent or correct physical deformity or malfunction; or
      3. Support a weak or deformed portion of the body.
    2. “Prosthetic device” does not include corrective eyeglasses, contact lenses, and dental prostheses; and
  7. “Repair and replacement parts” includes all components or attachments used in conjunction with durable medical equipment.
3. 1. Notwithstanding subdivision (a)(2) of this section, a patient may claim the exemption under this section for a wheelchair lift or automobile hand controls prescribed for the patient after the sale if:
    1. The wheelchair lift or automobile hand controls are purchased in conjunction with the purchase of a motor vehicle;
    2. The gross receipts or gross proceeds derived from the sale of the wheelchair lift or automobile hand controls are separately stated on the invoice or bill of sale for the purchase of the motor vehicle; and
    3. The patient has a prescription for the wheelchair lift or automobile hand controls at the time the motor vehicle is registered.
  2. A patient purchasing a wheelchair lift or automobile hand controls directly from a vendor of adaptive medical equipment for subsequent installation shall possess a prescription for the wheelchair lift or automobile hand controls prior to the sale in compliance with subdivision (a)(2) of this section.
1. The gross receipts or gross proceeds derived from a purchase of or repair to fire protection equipment and emergency equipment to be owned by and exclusively used by a volunteer fire department are exempt from the taxes levied under:
  1. The Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.;
  2. This subchapter; and
  3. All other state, local, and county sales and use taxes.
2. The gross receipts or gross proceeds derived from a purchase of supplies and materials to be used in the construction and maintenance of volunteer fire departments, including improvements and fixtures thereon, and property of any nature appurtenant thereto or used in connection therewith are exempt from the taxes levied under:
  1. The Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.;
  2. This subchapter; and
  3. All other state, local, and county sales and use taxes.
1. The gross receipts or gross proceeds derived from sales of electricity and natural gas used in the process of manufacturing wall and floor tile by manufacturers of tile classified in Standard Industrial Classification 3253 are exempt from:
  1. The Arkansas gross receipts tax levied by §§ 26-52-301 and 26-52-302;
  2. The Arkansas compensating use tax levied by §§ 26-53-106 and 26-53-107; and
  3. All city and county sales and use taxes.
2. A manufacturer of wall or floor tile classified in Standard Industrial Classification 3253 must have begun construction of a manufacturing facility in the state prior to January 1, 2003, in order to claim this exemption.
1. As used in this section:
  1. “Person” means a natural person who resided in this state at the time of purchasing a truck tractor or semitrailer in another state;
  2. “Semitrailer” means every vehicle with or without motive power, including a pole trailer, drawn by a truck tractor or a Class Six truck as defined by § 27-14-601(a)(3)(F) or a Class Seven truck as defined by § 27-14-601(a)(3)(G) that is registered with the International Registration Plan to be engaged in interstate commerce and designed for carrying property; and
  3. 1. “Truck tractor” means a motor vehicle:
      1. Designed and used primarily for drawing other vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and load so drawn; and
      2. Registered as a:
        
        Class Five or Class Eight truck as defined by § 27-14-601(a)(3); or
        
        Class Six truck as defined by § 27-14-601(a)(3)(F) or a Class Seven truck as defined by § 27-14-601(a)(3)(G) that is not registered with the International Registration Plan to be engaged in interstate commerce.
    2. “Truck tractor” does not include a Class Six truck as defined by § 27-14-601(a)(3)(F) or a Class Seven truck as defined by § 27-14-601(a)(3)(G) that is registered with the International Registration Plan to be engaged in interstate commerce.
2. Except as provided in subsections (d) and (e) of this section, the gross receipts or gross proceeds in excess of nine thousand one hundred fifty dollars ($9,150) derived from the sale of a new or used truck tractor in another state for use in this state are exempt from the Arkansas compensating use tax levied by this subchapter.
3. The gross receipts or gross proceeds derived from the sale of a new or used semitrailer in another state for use in this state are exempt from the Arkansas compensating use tax levied by this subchapter.
4. The gross receipts or gross proceeds derived from the sale in another state for use in this state of a new or used Class Six truck as defined by § 27-14-601(a)(3)(F) or a Class Seven truck as defined by § 27-14-601(a)(3)(G) that is registered with the International Registration Plan to be engaged in interstate commerce are exempt from the Arkansas compensating use tax levied by this subchapter.
5. The exemption under subsection (b) of this section does not apply to compensating use taxes levied by any Arkansas city, town, or county.
1. 1. The Secretary of the Department of Finance and Administration shall determine the following conditions:
    1. That federal law authorizes the state to collect sales and use tax from some or all of the sellers that have no physical presence in the State of Arkansas and that make sales of taxable goods and services to Arkansas purchasers;
    2. That initiating the collection of sales and use tax from these sellers would increase the net available general revenues needed to fund state agencies, services, and programs; and
    3. 1. That during a six-month consecutive period, the amount of net available general revenues attributable to the collection of sales and use tax from sellers that have no physical presence in the State of Arkansas is equal to or greater than one hundred fifty percent (150%) of sales and use tax collected under subsection (c) of this section and § 26-52-317 on food and food ingredients.
      2. The secretary shall make the determination under subdivision (a)(1)(C)(i) of this section on a monthly basis following the determination that the conditions under subdivision (a)(1)(A) of this section have been met.
  2. 1. Beginning July 1, 2013, the secretary shall make a monthly determination as to whether the aggregate amount of deductions from net general revenues attributable to the following during the most recently ended six-month consecutive period, as compared with the same six-month period in the prior year, has declined by thirty-five million dollars ($35,000,000) or more:
      1. The Educational Adequacy Fund;
      2. Bonds issued under the Arkansas College Savings Bond Act of 1989, § 6-62-701 et seq.;
      3. Bonds issued under the Arkansas Higher Education Technology and Facility Improvement Act of 2005, § 6-62-1101 et seq.;
      4. The City-County Tourist Facilities Aid Fund; and
      5. Bonds issued under the Arkansas Water, Waste Disposal and Pollution Abatement Facilities Financing Act of 1997 and the Arkansas Water, Waste Disposal, and Pollution Abatement Facilities Financing Act of 2007, § 15-20-1301 et seq.
    2. 1. In making the determination in this subdivision (a)(2), the secretary shall consider all economic factors existing at the time of the determination that could potentially affect the decline in the aggregate amount of deductions, including without limitation pending litigation.
      2. If the consideration of additional economic factors under subdivision (a)(2)(B)(i) of this section results in a determination that the decline in the aggregate amount of deductions is not likely to remain at that reduced level, the secretary shall conclude that the conditions in this subdivision (a)(2) have not been met.
  3. When the secretary finds that all of the conditions in either subdivision (a)(1) or subdivision (a)(2) of this section have been met, then the compensating use taxes levied under subsection (c) of this section shall be levied at the rate of zero percent (0%) on the sale of food and food ingredients beginning on the first day of the calendar quarter that is at least thirty (30) days following the determination of the secretary.
2. As used in this section:
  1. “Food” and “food ingredients” mean the same as defined in § 26-53-102 except that “food” and “food ingredients” do not include prepared food; and
  2. “Prepared food” means the same as defined in § 26-53-102 except that “prepared food” does not include:
    1. Food that is only cut, repackaged, or pasteurized by the seller; or
    2. Eggs, fish, meat, and poultry, and foods containing these raw animal foods requiring cooking by the consumer to prevent food-borne illnesses as recommended by the United States Food and Drug Administration in its 2005 Food Code, § 3-401.11, as it existed on January 1, 2007.
3. 1. Beginning July 1, 2011, in lieu of the compensating use taxes levied on food and food ingredients under §§ 26-53-106 and 26-53-107, there is levied a tax on the privilege of storing, using, distributing, or consuming food and food ingredients at the rate of one and three-eighths percent (1.375%) to be distributed as follows:
    1. Seventy-six and six-tenths percent (76.6%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited as general revenues;
    2. Eight and five-tenths percent (8.5%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited into the Property Tax Relief Trust Fund; and
    3. Fourteen and nine-tenths percent (14.9%) of the taxes, interest, penalties, and costs received by the secretary under this subdivision (c)(1) shall be deposited into the Educational Adequacy Fund.
  2. The use tax levied under subdivision (c)(1) of this section shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas compensating use taxes.
4. The following shall continue to apply to the sales price of food and food ingredients:
  1. The compensating use tax levied under Arkansas Constitution, Amendment 75, § 2; and
  2. All municipal and county use taxes.
5. The Department of Finance and Administration shall promulgate rules to implement the provisions of this section.
1. As used in this section:
  1. “Exemption certificate” means an exemption certificate issued by the Secretary of the Department of Finance and Administration under subdivision (d)(1) of this section;
  2. “Nonprofit organization” means any organization described in 26 U.S.C. § 501(c)(3), as in effect on January 1, 2005;
  3. “Qualified museum” means any nonprofit organization that acquires a collection of artwork for purposes of establishing and operating a qualified museum facility, regardless of whether the nonprofit organization may engage in any other charitable activities if the:
    1. Fair market value of the artwork collection of the nonprofit organization for public viewing and exhibition at the qualified museum facility exceeds one hundred million dollars ($100,000,000) prior to January 1, 2013; and
    2. The secretary has issued an exemption certificate to the nonprofit organization; and
  4. “Qualified museum facility” means a facility, including the structures, buildings, and any ancillary or related structures or buildings and real property associated with the facility, including auditoriums, parking areas, and educational facilities that house a collection of artwork or other exhibits for public viewing and exhibition if the:
    1. Principal location and primary operations of the facility will be within the State of Arkansas;
    2. Museum portion of the facility opens to the public after January 1, 2005, and prior to January 1, 2013; and
    3. Aggregate total costs of the construction and acquisition of the facility exceed thirty million dollars ($30,000,000) prior to January 1, 2013.
2. 1. The storage, use, distribution, or consumption of tangible personal property, specified digital products, or a digital code by a qualified museum is exempt from this subchapter.
  2. The exemption provided in subdivision (b)(1) of this section shall also apply to the storage, use, distribution, or consumption of materials by a qualified museum or its contractor or agent used in the construction, repair, expansion, or operation of the qualified museum facility.
3. A nonprofit organization requesting recognition as a qualified museum shall file with the secretary on forms prescribed by the secretary a written statement under oath:
  1. 1. Describing the facts upon which the nonprofit organization claims the exemption under this section.
    2. This statement shall be filed prior to first claiming the exemption under this section and shall include facts indicating that the nonprofit organization has a good faith plan and intent to satisfy the conditions under subdivision (c)(2) of this section; and
  2. On or before June 30, 2013, stating that the following conditions have been met:
    1. The nonprofit organization has established and operated prior to January 1, 2013, a facility that houses a collection of artwork or other exhibits for public viewing and exhibition;
    2. The principal location and primary operations of the facility are within the State of Arkansas;
    3. The museum portion of the facility first opened to the public after January 1, 2005, and prior to January 1, 2013;
    4. The aggregate total costs of construction and acquisition of the facility, including the structures, buildings, ancillary or related structures or buildings, real property used in connection with the facility, auditoriums, parking areas, and educational facilities exceeded thirty million dollars ($30,000,000) prior to January 1, 2013; and
    5. Prior to January 1, 2013, the nonprofit organization acquired a collection of artwork with a fair market value in excess of one hundred million dollars ($100,000,000) for public viewing and exhibition at the qualified museum facility.
4. 1. After filing the statement required under subdivision (c)(1) of this section, if the secretary finds that the nonprofit organization has a good faith plan and intent to satisfy the conditions of subdivision (c)(2) of this section prior to January 1, 2013, the secretary shall issue an exemption certificate to the nonprofit organization within sixty (60) days after the filing of the statement.
  2. The secretary may revoke the exemption certificate at any time after it is issued if the secretary determines that the nonprofit organization is unable to satisfy the conditions under subdivision (c)(2) of this section prior to January 1, 2013.
  3. After filing the statement required under subdivision (c)(2) of this section, if the secretary determines that the nonprofit organization has not met the conditions under subdivision (c)(2) of this section, the secretary shall revoke the exemption certificate of the nonprofit organization.
  4. If the nonprofit organization fails to file the statement described in subdivision (c)(2) of this section on or prior to June 30, 2013, the secretary shall revoke the exemption certificate.
  5. Revocation by the secretary of an exemption certificate shall be retroactive to the date of its issuance subject to subsection (e) of this section.
5. 1. If the secretary revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties due under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., this subchapter, or the Arkansas Tax Procedure Act, § 26-18-101 et seq., may be assessed against the nonprofit organization but may not be assessed against a third party that has relied in good faith on the exemption certificate prior to its revocation.
  2. If the secretary revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties assessed against the nonprofit organization shall also include any tax deficiency, related interest, and applicable penalties assessed on purchases made by the nonprofit organization's contractors and agents for the benefit of the nonprofit organization in reliance on the exemption certificate.
  3. 1. Any assessment by the secretary under subdivision (e)(1) or subdivision (e)(2) of this section shall be made in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.
    2. However, the time period for the secretary to make the assessment is extended to whichever of the following occurs first:
      1. Three (3) years from the date the nonprofit organization files the statement under subdivision (c)(2) of this section; or
      2. July 1, 2016.
  4. The nonprofit organization may contest any assessment or other determination by the secretary in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. Every person purchasing heavy equipment as defined in § 26-52-318 for storage or use within this state from a dealer located outside of this state, and who does not pay tax to the out-of-state dealer, is liable for the use tax imposed by this chapter.
2. The purchaser shall pay the use tax to the Secretary of the Department of Finance and Administration.
3. If the purchaser pays the use tax to an out-of-state dealer, the purchaser shall present proof to the secretary that the Arkansas use tax has been paid.
1. 1. 1. Beginning July 1, 2014, in lieu of the tax levied in §§ 26-53-106 and 26-53-107, there is levied an excise tax on the sales price of natural gas and electricity purchased by a manufacturer for use directly in the actual manufacturing process at the rate of one percent (1%).
    2. 1. Beginning July 1, 2015, the compensating use tax levied in §§ 26-53-106 and 26-53-107 and this section shall be levied at a rate of zero percent (0%) on natural gas and electricity purchased by a manufacturer for use directly in the actual manufacturing process.
      2. However, natural gas and electricity purchased by a manufacturer for use directly in the actual manufacturing process shall remain subject to the excise tax of one-eighth of one percent (1/8 of 1%) levied in Arkansas Constitution, Amendment 75, and the temporary excise tax of one-half percent (½%) levied in Arkansas Constitution, Amendment 91.
  2. The taxes levied in this subsection shall be distributed as follows:
    1. Seventy-six and six-tenths percent (76.6%) of the tax, interest, penalties, and costs received by the Secretary of the Department of Finance and Administration shall be deposited as general revenues;
    2. Eight and five-tenths percent (8.5%) of the tax, interest, penalties, and costs received by the secretary shall be deposited into the Property Tax Relief Trust Fund; and
    3. Fourteen and nine-tenths percent (14.9%) of the tax, interest, penalties, and costs received by the secretary shall be deposited into the Educational Adequacy Fund.
  3. 1. The excise tax levied in this section applies only to natural gas and electricity purchased for use directly in the actual manufacturing process.
    2. Natural gas and electricity purchased for any other purpose shall be subject to the full compensating use tax levied under §§ 26-53-106 and 26-53-107.
  4. The excise tax levied in this section shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas compensating use taxes.
2. As used in this section, “manufacturer” means a:
  1. Manufacturer classified within sectors 31 through 33 or subsector 115111 of the North American Industry Classification System, as in effect on January 1, 2011; or
  2. Generator of electric power classified within sector 22 of the North American Industry Classification System, as in effect on January 1, 2011, that uses natural gas to operate a new or existing generating facility that uses combined-cycle gas turbine technology.
3. 1. Except as otherwise provided in this subsection, the tax rate under subsection (a) of this section does not apply to a manufacturer as defined in subdivision (b)(2) of this section.
  2. In lieu of the tax rate under subsection (a) of this section, the excise tax rate levied on the sales price of natural gas and electricity purchased by a manufacturer as defined in subdivision (b)(2) of this section to operate a new or existing facility that uses combined-cycle gas turbine technology is as follows:
    1. Beginning January 1, 2012, five and one-eighth percent (5.125%);
    2. Beginning January 1, 2013, four and one-eighth percent (4.125%);
    3. Beginning January 1, 2014, two and five-eighths percent (2.625%); and
    4. Beginning January 1, 2015, one percent (1%).
  3. The taxes levied in this subsection shall be distributed in the same manner as stated in subsection (a) of this section.
4. Natural gas and electricity subject to the reduced tax rate levied in this section shall be separately metered from natural gas and electricity used for any other purpose by the manufacturer or otherwise established under subsection (f) of this section.
5. Before purchasing any natural gas or electricity at the reduced excise tax rate levied in this section, the secretary may require any seller of natural gas or electricity to obtain a certificate from the consumer, in the form prescribed by the secretary, certifying that the manufacturer is eligible to purchase natural gas and electricity at the reduced excise tax rate.
6. The secretary shall promulgate rules for the proper administration of this section.
7. The purchase of natural gas and electricity by a manufacturer shall continue to be subject to:
  1. The excise tax levied under Arkansas Constitution, Amendment 75, § 2; and
  2. All municipal and county compensating use taxes.
1. The taxes levied under §§ 26-53-106 and 26-53-107 on the privilege of storing, using, distributing, or consuming the following within this state are subject to a refund as provided in this section:
  1. Machinery and equipment purchased to modify, replace, or repair, either in whole or in part, existing machinery or equipment used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at a manufacturing or processing plant or facility in this state;
  2. Service relating to the initial installation, alteration, addition, cleaning, refinishing, replacement, or repair of machinery or equipment described in subdivision (a)(1) of this section; and
  3. Machinery and equipment purchased to modify, replace, or repair, either in whole or in part, existing molds and dies used directly in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at a manufacturing or processing plant or facility in this state.
2. 1. Beginning July 1, 2014, the taxes levied under §§ 26-53-106 and 26-53-107 that are subject to a refund under this section are the taxes in excess of four and seven-eighths percent (4.875%).
  2. The taxes levied under §§ 26-53-106 and 26-53-107 that are subject to a refund under this section are the taxes in excess of the following rates:
    1. Beginning July 1, 2018, three and seven-eighths percent (3.875%);
    2. Beginning July 1, 2019, two and seven-eighths percent (2.875%);
    3. Beginning July 1, 2020, one and seven-eighths percent (1.875%); and
    4. Beginning July 1, 2021, seven-eighths percent (0.875%).
  3. Beginning July 1, 2022, purchases qualifying for the tax refund under this section are exempt from the taxes levied under this chapter.
3. The excise tax of one-eighth of one percent (0.125%) levied in Arkansas Constitution, Amendment 75, and the temporary excise tax of one-half percent (0.5%) levied in Arkansas Constitution, Amendment 91, are not subject to refund under this section.
4. As used in this section:
  1. “Manufacturing” or “processing” means the same as defined under § 26-53-114(b) and includes activities described in subsection (a) of this section, both independently and collectively; and
  2. “Used directly” means the same as defined under § 26-53-114(c).
5. All existing excise tax exemptions, including without limitation exemptions under §§ 26-52-402 and 26-53-114, remain in full force and effect and are not limited by this section.
6. A taxpayer may claim the benefit of the tax refund under this section only by using one (1) of the following methods:
  1. 1. Both:
      1. Obtaining a direct pay or a limited direct pay sales and use tax permit from the Department of Finance and Administration; and
      2. Self-refunding:
        
        At the time the taxpayer files his or her original sales and use tax report; or
        
        By later filing an amended sales or use tax report with the department.
    2. The statutes of limitation stated in § 26-18-306 apply to claims made under this subdivision (f)(1).
    3. Interest shall not accrue or be paid on a refund claimed under this subdivision (f)(1); or
  2. 1. Beginning July 1, 2018, for a taxpayer that does not hold a direct pay or limited direct pay permit, holds an active Arkansas sales and use tax permit, and files sales and use tax reports with the department, filing a claim for the credit or rebate with the department.
    2. 1. The credit or rebate authorized under this subdivision (f)(2) shall be obtained only by offsetting the amount of the claimed credit or rebate against the state tax to be remitted with the taxpayer's sales and use tax reports.
      2. If the total amount of the credit or rebate authorized under this subdivision (f)(2) is greater than the amount of the state tax to be remitted with the taxpayer's sales and use tax reports, the taxpayer is entitled to a refund of the difference between the amount of the tax owed and the amount of the credit or rebate authorized under this subdivision (f)(2).
    3. A taxpayer claiming a credit or rebate under this subdivision (f)(2) shall electronically file all sales and use tax reports.
    4. A claim for credit or rebate under this subdivision (f)(2) shall not be paid for a claim filed more than one (1) year following the date of the qualifying purchase or more than one (1) year following the date of payment, whichever is later.
    5. Interest shall not accrue or be paid on an amount subject to a claim for a credit or rebate under this subdivision (f)(2).
7. A claim for a credit or rebate shall not be paid under subdivision (f)(2) of this section for a purchase made before July 1, 2018.
8. A taxpayer shall not claim the benefit of the refund under this section by filing a verified claim for refund with the department.
9. The following provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq., apply to claims for a refund under this section:
  1. The time limitations that apply to claims for a refund of an overpayment of state tax; and
  2. The procedures that apply to the disallowance or proposed disallowance of claims for a refund.
1. 1. All tangible personal property, specified digital products, and digital codes that are procured from without this state for use, storage, distribution, or consumption, including machinery, equipment, repair or replacement parts, materials, and supplies used, stored, distributed, or consumed by a contractor in the performance of a contract in this state, are subject to the compensating tax of four and five-tenths percent (4.5%) of the purchase price as provided by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., or four and five-tenths percent (4.5%) of its market or book value, whichever is greater, if the property has been subjected to prior use before coming to rest for use, storage, distribution, or consumption within this state. The four-and-five-tenths-percent compensating tax is in addition to any other compensating taxes levied by the State of Arkansas.
  2. The tax is due and payable regardless of whether or not any right, title, or interest in the tangible personal property, specified digital products, or digital code becomes vested in the contractor.
2. In the case of leases or rentals of tangible personal property, specified digital products, or a digital code by a contractor for use, storage, distribution, or consumption in this state, the contractor shall report and remit the compensating tax on the basis of rental or lease payments made to the lessor of the tangible personal property, specified digital products, or digital code during the term of the lease or rental, which lease rentals shall be in accordance with written contracts between the lessor and the lessee furnished to the Secretary of the Department of Finance and Administration.
3. 1. This subchapter does not apply in respect to the use, consumption, distribution, or storage of tangible personal property, specified digital products, or a digital code as defined in this chapter for use or consumption in this state upon which a like tax equal to or greater than the amount imposed by this subchapter has been paid in another state, the proof of payment of the tax to be according to rules made by the secretary.
  2. If the amount of tax paid in another state is not at least equal to or greater than the amount of tax imposed by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., then the contractor shall pay to the secretary an amount sufficient to make the tax paid in the other state and this state equal to the total amount of tax due under Arkansas law.
  3. No credit shall be given under this section for taxes paid on the property in another state if that state does not grant credit for taxes paid on similar tangible personal property, specified digital products, or digital codes in this state.
1. When in the judgment of the Secretary of the Department of Finance and Administration it is necessary in order to secure the collection of any tax, penalties, or interest due or to become due under this subchapter, the secretary may negotiate agreements with the tax departments of other states in respect to the collecting, reporting, payment, and enforcement of tax on sales of tangible personal property, specified digital products, a digital code, or taxable services to residents of Arkansas by a retailer maintaining a place of business in the other state.
2. In consideration of the agreement, the secretary may make similar agreements for the collecting, reporting, payment, and enforcement of tax as imposed by the other states on sales of tangible personal property, specified digital products, a digital code, or taxable services to residents of other states by retailers maintaining places of business in Arkansas.
1. The Secretary of the Department of Finance and Administration, in negotiating agreements, is authorized by way of compromise to waive the collection and enforcement of taxes on sales to residents of Arkansas made in another state and delivered into Arkansas when the sales were made prior to the effective date of any agreement negotiated.
2. However, the secretary in any case shall not be authorized to waive payment and enforcement of the tax in another state unless the tax department of the other state waives collection, payment, and enforcement of their tax in this state in the same manner as the tax payment is waived by this state.
1. As used in this chapter, “corporation” means any corporation, domestic and foreign, active and inactive, which is organized in or qualified under the laws of the State of Arkansas and includes, but is not limited to, any person or group of persons, any association, joint-stock company, business trust, or other organizations with or without charter constituting a separate legal entity of relationship with the purpose of obtaining some corporate privilege or franchise which is not allowed to them as individuals and which is exercising, or attempting to exercise, corporate-type acts, whether or not existing by virtue of a particular statute.
2. However, “corporation” does not include:
  1. Nonprofit corporations;
  2. Corporations which are organizations exempt from the federal income tax; or
  3. Organizations formed under or governed by the Uniform Partnership Act (1996), § 4-46-101 et seq., or the Uniform Limited Partnership Act (2001), § 4-47-101 et seq.
1. 1. The Secretary of State shall furnish report forms to each corporation subject to the provisions of this chapter by mailing them to the corporation's current agent for service or other person identified by the corporation.
  2. When filing the franchise tax report, a corporation may state who is to receive a franchise tax form the following year if that person is different from the agent for service on file for the corporation at that time.
2. Any corporation that fails to receive the report forms by March 20 of the reporting year shall make written request for them to the Secretary of State on or before March 31.
3. 1. Each corporation subject to the requirements of this chapter shall file a franchise tax report with the Secretary of State that shows the condition and status of the corporation as of the close of business on the last day of the corporation's preceding fiscal year and other information required by the Secretary of State.
  2. 1. The franchise tax as computed on the report shall be remitted with the franchise tax report on or before June 1 of the reporting year for franchise tax due for calendar year 2003 and years prior to 2003.
    2. The franchise tax as computed on the report shall be remitted with the franchise tax report on or before May 1 of the reporting year for franchise tax due for calendar year 2004 and subsequent years.
4. 1. Every corporation that dissolves shall be required to pay at the time of dissolution the franchise tax for the prior calendar year and pay at the time of dissolution the minimum franchise tax for the year in which dissolved or withdrawn.
  2. Any newly formed corporation shall not be required to file a franchise tax report until the calendar year immediately following the calendar year of incorporation.
5. 1. When the par value of the shares of a corporation is required to be stated in any franchise tax report and the shares of the corporation are without par value, the number of shares shall be stated.
  2. For the purpose of computing the franchise tax prescribed by this chapter, shares of no par value shall be considered to be of the par value of twenty-five dollars ($25.00) per share.
6. Each corporation which pays its tax computed by the full assessment of capital stock or property shall not be required to report the value of its real and personal property within or without this state.
7. 1. Every franchise tax report shall contain the following statement:
  2. The statement shall be signed by the president, vice president, secretary, treasurer, or controller of the corporation or other authorized person.
8. 1. All information contained in a franchise tax report shall be confidential and not available for public inspection, except for the following:
    1. The name and address of the corporation;
    2. The name of the corporation's president, vice president, secretary, treasurer, and controller;
    3. The total authorized capital stock with par value;
    4. The total issued and outstanding capital stock with par value; and
    5. The state of incorporation.
  2. In the case of a franchise tax report filed by an organization formed under the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq., the names of members, except those designated in the organizations' franchise tax report as a manager, president, vice president, secretary, treasurer, or controller of the organization, shall be confidential and not available for public inspection unless the organization has no registered agent for service of process.
1. 1. The Department of Finance and Administration shall furnish report forms to each corporation subject to this chapter by mailing them to the corporation's current agent for service or other person identified by the corporation.
  2. When filing the franchise tax report, a corporation may state who is to receive a franchise tax form the following year if that person is different from the agent for service on file for the corporation at that time.
2. A corporation that fails to receive the report forms by March 20 of the reporting year shall make written request for them to the department on or before March 31.
3. 1. Each corporation subject to the requirements of this chapter shall file a franchise tax report with the department that shows the condition and status of the corporation as of the close of business on the last day of the corporation's preceding fiscal year and other information required by the department.
  2. 1. The franchise tax as computed on the report shall be remitted with the franchise tax report and submitted to the department with the corporation's income tax return.
    2. For a corporation that is not required to submit an income tax return, the franchise tax as computed on the report shall be remitted with the franchise tax report on or before May 1 of the reporting year for franchise tax due.
4. 1. Every corporation that dissolves shall be required to pay at the time of dissolution the franchise tax for the prior calendar year and pay at the time of dissolution the minimum franchise tax for the year in which dissolved or withdrawn.
  2. Any newly formed corporation shall not be required to file a franchise tax report until the calendar year immediately following the calendar year of incorporation.
5. 1. When the par value of the shares of a corporation is required to be stated in any franchise tax report and the shares of the corporation are without par value, the number of shares shall be stated.
  2. For the purpose of computing the franchise tax prescribed by this chapter, shares of no par value shall be considered to be of the par value of twenty-five dollars ($25.00) per share.
6. Each corporation which pays its tax computed by the full assessment of capital stock or property shall not be required to report the value of its real and personal property within or without this state.
7. 1. Every franchise tax report shall contain the following statement:
  2. The statement shall be signed by the president, vice president, secretary, treasurer, or controller of the corporation or other authorized person.
8. 1. All information contained in a franchise tax report shall be confidential and not available for public inspection, except for the following:
    1. The name and address of the corporation;
    2. The name of the corporation's president, vice president, secretary, treasurer, and controller;
    3. The total authorized capital stock with par value;
    4. The total issued and outstanding capital stock with par value; and
    5. The state of incorporation.
  2. In the case of a franchise tax report filed by an organization formed under the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq., the names of members, except those designated in the organizations' franchise tax report as a manager, president, vice president, secretary, treasurer, or controller of the organization, shall be confidential and not available for public inspection unless the organization has no registered agent for service of process.
1. The Secretary of State from the information reported and from any other information received by him or her bearing upon the subject shall compute the amount of tax of each corporation at the rate or rates provided by this chapter.
2. 1. 1. If the taxpayer fails to comply with the filing and remittance requirements under § 26-54-105(c) by May 1, the Secretary of State shall assess the corporation a penalty of twenty-five dollars ($25.00) plus interest on the tax and penalty from the date due until paid at the rate of ten percent (10%) per year.
    2. However, the franchise tax, penalty, and interest for any tax year shall not exceed two (2) times the corporation's tax owed.
  2. On or before November 1 of each year, the Secretary of State shall mail notice to the corporation at its last known address stating that the corporation is subject to forfeiture of its corporate charter under § 26-54-111 for the failure to pay corporate franchise tax.
3. The Secretary of State or his or her designee may agree to settle or compromise a dispute concerning interest or penalties associated with corporate franchise taxes if the taxpayer:
  1. Disputes the proposed amount; or
  2. Is insolvent or bankrupt.
4. 1. The Secretary of State may waive any accrued interest or assessed penalties imposed on a taxpayer due to a failure to remit corporate franchise taxes under § 26-54-105(c), if:
    1. The taxpayer is reasonably mistaken about the application of this chapter or the computation of the franchise tax to the corporation; or
    2. A taxpayer cannot pay the accrued interest or assessed penalties because of the taxpayer's insolvency or bankruptcy.
  2. The Secretary of State may waive any fees that a taxpayer owes if the taxpayer desires to dissolve the corporation.
5. If the parties cannot resolve the dispute, the parties may pursue any other remedy available to them, including, but not limited to, remedies available under the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
6. The Secretary of State shall develop guidelines to assist a taxpayer in resolving a corporate franchise tax dispute.
1. The Secretary of the Department of Finance and Administration from the information reported and from any other information received by him or her bearing upon the subject shall compute the amount of tax of each corporation at the rate or rates provided by this chapter.
2. 1. 1. If the taxpayer fails to comply with the filing and remittance requirements under § 26-54-105(c), the secretary shall assess the corporation a penalty of twenty-five dollars ($25.00) plus interest on the tax and penalty from the date due until paid at the rate of ten percent (10%) per year.
    2. However, the franchise tax, penalty, and interest for any tax year shall not exceed two (2) times the corporation's tax owed.
  2. 1. Except as provided in subdivision (b)(2)(B) of this section, on or before November 1 of each year, the secretary shall mail notice to the corporation at its last known address stating that the corporation is subject to forfeiture of its corporate charter under § 26-54-111 for the failure to pay corporate franchise tax.
    2. For a corporation that has a franchise tax due date after May 1, six (6) months after the franchise tax return due date for the corporation, taking into account any extensions of the due date, the secretary shall mail notice to the corporation at its last known address stating that the corporation is subject to forfeiture of its corporate charter under § 26-54-111 for the failure to pay corporate franchise tax.
3. The secretary or his or her designee may agree to settle or compromise a dispute concerning interest or penalties associated with corporate franchise taxes if the taxpayer:
  1. Disputes the proposed amount; or
  2. Is insolvent or bankrupt.
4. 1. The secretary may waive any accrued interest or assessed penalties imposed on a taxpayer due to a failure to remit corporate franchise taxes under § 26-54-105(c), if:
    1. The taxpayer is reasonably mistaken about the application of this chapter or the computation of the franchise tax to the corporation; or
    2. A taxpayer cannot pay the accrued interest or assessed penalties because of the taxpayer's insolvency or bankruptcy.
  2. The secretary may waive any fees that a taxpayer owes if the taxpayer desires to dissolve the corporation.
  3. If a taxpayer demonstrates that a corporation was not doing business in the state for the period for which penalties and interest are owed under this section, the secretary shall waive the amount due under this section if the taxpayer demonstrates that the taxpayer intends to dissolve the corporation.
5. The Arkansas Tax Procedure Act, § 26-18-101 et seq., so far as is practicable, is applicable to the franchise tax levied under this chapter and to the reporting, remitting, and enforcement of the franchise tax.
6. The secretary shall develop guidelines to assist a taxpayer in resolving a corporate franchise tax dispute.
1. 1. The Bank Commissioner, Insurance Commissioner, and any other officer or agency of the state authorized to issue corporate permits or authorities to do business in this state shall prepare and maintain a correct list of all corporations organizing or qualifying through their respective offices or agencies.
  2. Each official or agency shall file with the Secretary of State a monthly report showing:
    1. The name and address of each new corporation organized or qualified;
    2. The authorized and outstanding capital stock;
    3. The name changes, mergers, charter forfeitures, dissolutions, or withdrawals; and
    4. All other information concerning the corporation required by the Secretary of State.
2. Upon request of the Secretary of State, each official or agency shall prepare and certify to the Secretary of the Department of Finance and Administration a complete list of the names and addresses of all corporations which have organized or qualified through their respective office or agency and which are subject to the provisions of this chapter.
3. Officials or agencies of the state, county, or municipalities authorized to issue permits shall notify each corporation receiving a permit of the requirements to register the corporation with the Secretary of State prior to conducting business in Arkansas.
4. Any corporation filing instruments providing for the organization of any common law or statutory trust or similar organization with any county clerk, or other clerk of the various counties of this state, shall file them in duplicate. The clerk receiving the documents for filing or recordation shall file mark them and forward the file-marked duplicate to the Secretary of State.
5. 1. The Secretary of the Department of Finance and Administration shall provide the Secretary of State a list of corporations doing business in this state and filing franchise tax reports with the Department of Finance and Administration.
  2. However, the Secretary of the Department of Finance and Administration shall not include any information deemed confidential by any other law.
1. 1. The Secretary of State, Bank Commissioner, Insurance Commissioner, and any other officer or agency of the state authorized to issue corporate permits or authorities to do business in this state shall prepare and maintain a correct list of all corporations organizing or qualifying through their respective offices or agencies.
  2. Each official or agency shall file with the Department of Finance and Administration a monthly report showing:
    1. The name and address of each new corporation organized or qualified;
    2. The authorized and outstanding capital stock;
    3. The name changes, mergers, charter forfeitures, or withdrawals;
    4. The name and address of each corporation that has provided official notification regarding the dissolution of the corporation; and
    5. All other information concerning the corporation required by the department.
2. Upon request of the Secretary of the Department of Finance and Administration, each official or agency shall prepare and certify to the Secretary of the Department of Finance and Administration a complete list of the names and addresses of all corporations that have organized or qualified through their respective office or agency and that are subject to the provisions of this chapter.
3. Officials or agencies of the state, county, or municipalities authorized to issue permits shall notify each corporation receiving a permit of the requirements to register the corporation with the Secretary of State before conducting business in Arkansas.
4. 1. A corporation filing instruments providing for the organization of any common law or statutory trust or similar organization with any county clerk, or other clerk of the various counties of this state, shall file them in duplicate.
  2. The clerk receiving the documents for filing or recordation shall file mark them and forward the file-marked duplicate to the Secretary of State.
5. 1. The Secretary of the Department of Finance and Administration shall provide the Secretary of State a list of corporations doing business in this state and filing franchise tax reports with the department.
  2. However, the Secretary of the Department of Finance and Administration shall not include any information deemed confidential by any other law.
1. On or before January 31 of each year, the Secretary of State shall proclaim as forfeited the corporate charters or authorities, as the case may be, of all corporations, both domestic and foreign that according to the Secretary of State's records are delinquent in the payment of the annual franchise tax for a prior year.
2. A copy of the proclamation, or applicable portion thereof, shall be furnished to each other official or agency of the state which is authorized to issue corporation charters or authorities. Upon their receipt of the proclamation, the several officials shall at once correct their respective records in accordance with the proclamation.
1. 1. Except as provided in subdivision (a)(2) of this section, on or before January 31 of each year, the Secretary of State shall proclaim as forfeited the corporate charters or authorities of all corporations, both domestic and foreign that according to the Department of Finance and Administration's records are delinquent in the payment of the annual franchise tax for a prior year.
  2. For a corporation that has a franchise tax due date after May 1, eight (8) months after the franchise tax return due date for the corporation, taking into account any extensions of the due date, the Secretary of State shall proclaim as forfeited the corporate charters or authorities of the corporations, both domestic and foreign that according to the department's records are delinquent in the payment of the annual franchise tax for a prior year.
2. 1. A copy of the proclamation, or applicable portion thereof, shall be furnished to each other official or agency of the state that is authorized to issue corporation charters or authorities.
  2. Upon their receipt of the proclamation, the several officials shall at once correct their respective records in accordance with the proclamation.
1. 1. 1. 1. Any corporation whose charter or permit authority to do business in the state has been declared forfeited by proclamation of the Governor or the Secretary of State may be reinstated to all its rights, powers, and property.
      2. Reinstatement shall be retroactive to the time that the corporation's authority to do business in the state was declared forfeited.
    2. The reinstatement shall be made after the filing of all delinquent franchise tax reports satisfactory to the Secretary of State and the payment of all taxes and penalties due for each year of delinquency.
  2. However, no reinstatement shall be allowed after seven (7) years from the date the charter or permit authority to do business in the state was declared forfeited by proclamation of the Governor or the Secretary of State.
2. If the Secretary of State issued the original corporate charter, permit, or authority, the Secretary of State shall reinstate the corporation upon payment by the corporation of all amounts due, as provided in subsection (a) of this section.
3. 1. If the original corporate charter, permit, or authority was issued by an official other than the Secretary of State, the official shall reinstate the corporation upon the corporation's filing with the official the receipt of the Secretary of State showing payment of all amounts due, as provided in subsection (a) of this section.
  2. Thereafter, the corporation shall stand in all respects as though its name had never been declared forfeited.
1. 1. 1. 1. A corporation whose charter or permit authority to do business in the state has been declared forfeited by proclamation of the Governor or the Secretary of State may be reinstated to all its rights, powers, and property.
      2. Reinstatement shall be retroactive to the time that the corporation's authority to do business in the state was declared forfeited.
    2. The reinstatement shall be made after the filing of all delinquent franchise tax reports satisfactory to the Department of Finance and Administration and the payment of all taxes and penalties due for each year of delinquency.
  2. However, reinstatement is not allowed after seven (7) years from the date the charter or permit authority to do business in the state was declared forfeited by proclamation of the Governor or the Secretary of State.
2. If the Secretary of State issued the original corporate charter, permit, or authority, the Secretary of State shall reinstate the corporation upon payment by the corporation of all amounts due, as provided in subsection (a) of this section.
3. 1. If the original corporate charter, permit, or authority was issued by an official other than the Secretary of State, the official shall reinstate the corporation upon the corporation's filing with the official the receipt of the department showing payment of all amounts due, as provided in subsection (a) of this section.
  2. Thereafter, the corporation shall stand in all respects as though its name had never been declared forfeited.
1. All taxes and penalties collected under the provisions of this chapter each month shall be deposited into the State Treasury to the credit of the Revenue Holding Fund Account of the State Apportionment Fund.
2. 1. On or before the fifth day of the following month, the Treasurer of State shall allocate and transfer the taxes and penalties collected to the General Revenue Fund Account of the State Apportionment Fund until a total of eight million dollars ($8,000,000) has been transferred during a fiscal year.
  2. After the transfers required by subdivision (b)(1) of this section have been made, the taxes and penalties collected under this chapter during the remainder of the fiscal year shall be special revenues, and the Treasurer of State shall transfer the taxes and penalties collected to the Educational Adequacy Fund after making the deductions required by § 19-5-203(b)(2).
1. No corporation or limited liability company shall be allowed to file any forms or documentation related to that corporation or limited liability company if the corporation or limited liability company owes past-due franchise taxes to the Secretary of State.
2. No person shall be allowed to file any initial forms or documentation with the Secretary of State to create any legal entity in the State of Arkansas or to obtain authority to do business in the State of Arkansas if that person is substantially connected to any corporation or limited liability company that owes past-due franchise taxes to the Secretary of State.
3. As used in this section:
  1. “Past-due franchise taxes” means only those taxes owed three (3) years prior to the year in which the current filing is presented;
  2. “Past officer or director” means a person who was associated with the corporation or limited liability company during the time that its charter was revoked for nonpayment of franchise taxes; and
  3. “Substantially connected” means a present officer or director or a past officer or director of a corporation.
1. A corporation or limited liability company is not allowed to file any forms or documentation related to that corporation or limited liability company if the corporation or limited liability company owes past-due franchise taxes to the Department of Finance and Administration.
2. A person is not allowed to file any initial forms or documentation with the Secretary of State to create any legal entity in the State of Arkansas or to obtain authority to do business in the State of Arkansas if that person is substantially connected to any corporation or limited liability company that owes past-due franchise taxes to the department.
3. As used in this section:
  1. “Past-due franchise taxes” means only those taxes owed three (3) years prior to the year in which the current filing is presented;
  2. “Past officer or director” means a person who was associated with the corporation or limited liability company during the time that its charter was revoked for nonpayment of franchise taxes; and
  3. “Substantially connected” means a present officer or director or a past officer or director of a corporation.
1. Motor vehicles belonging to the United States Government and used in its business exclusively shall not be required to pay any motor vehicle fuel tax.
2. When motor vehicle fuel upon which the tax has been paid is sold to any agent or employee of the United States Government for use in a motor vehicle belonging to the United States Government, and is used in its business exclusively, the wholesaler or dealer may not charge the consumer with the amount of the tax but may claim the refund of the tax under such rules as the Secretary of the Department of Finance and Administration may prescribe.
1. The fee to be paid to this state for the registration and licensing of any motor bus used by a system of motor buses operating in lieu of a street car system in adjoining cities or incorporated towns which are separated by a state line shall not exceed the fee provided by law in the adjoining state for the bus when:
  1. More than one-half (½) of the mileage of the routes regularly run by the motor bus system is outside this state;
  2. More than one-half (½) of the gross revenues of the system is derived from its operation outside this state and from the carrying of passengers from outside this state into this state;
  3. The system is operated in this state under a franchise contract with the Arkansas city or town;
  4. The motor buses are not operated under any conditions whatever on any of the roads or highways in this state outside the corporate limits of the city or town; and
  5. The motor bus system shall pay to this state a motor vehicle fuel tax at the applicable rate as fixed by the law of this state upon at least one-half (½) of the motor vehicle fuel used in the operation of the system as a whole.
2. At any time the adjoining city or town in Arkansas by ordinances may levy a privilege tax on the buses sufficient to reimburse the city or town for the use of its streets.
1. Whenever in this subchapter reference is made to a section of this subchapter, the reference shall extend to and include any amendment of or supplement to the section so referred to or any section hereafter enacted in lieu thereof.
2. Unless otherwise provided, whenever a reference to this subchapter or to any section is made in any amendment or supplement to this subchapter or to any section hereafter enacted, such reference shall be deemed to refer to this subchapter or such section as the same shall then stand or as thereafter amended.
1. There is levied a privilege or excise tax of eight and one-half cents (8½¢) on each gallon of motor fuel as defined in this subchapter, sold or used in this state, or purchased for sale or use in this state, to be computed in the manner hereinafter set forth.
2. In addition to the tax levied in subsection (a) of this section, there is levied an excise tax of one cent (1¢) on each gallon of motor fuel as defined in this subchapter, sold or used in this state, or purchased for sale or use in this state, to be computed in the manner hereinafter set forth.
1. The tax imposed by this subchapter is levied for the purpose of providing revenue to be used by the State of Arkansas to defray, in whole or in part, the cost of constructing, widening, reconstructing, maintaining, resurfacing, and repairing the public highways, and retiring highway indebtedness of this state.
2. 1. The funds collected by this subchapter shall be allocated and distributed only in the manner now established by existing laws relating to motor fuel taxes.
  2. One cent (1¢) of the tax levied on each gallon of motor fuel under this subchapter shall be remitted to the Treasurer of State separate and apart from other motor fuel and distillate special fuel taxes, and the gross amount thereof, without making any deduction therefrom for credit to the Constitutional Officers Fund and the State Central Services Fund, shall be distributed as provided by the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
1. 1. The tax on motor fuel sold in cities, incorporated towns, or planned communities which border on a state line or sold within eight hundred feet (800') of the state line or sold within eight hundred feet (800') of the maximum shore line of a navigable lake, the opposite shore line of which is beyond the Arkansas state line or sold within eight hundred feet (800') of the Arkansas terminal of a bridge spanning a river where the state line is in the center of the main channel of the river, when the sales of motor fuel are made therein and delivered into the storage tanks of retail dealers or when the sales are made therein to consumers and delivered into the storage tanks of the consumers or directly into the standard fuel tank of a motor vehicle, shall be at the same rate as the tax levied on motor fuel sold in other areas of the state, but in no event shall the rate of tax on motor fuel sold in the border areas be more than one cent (1¢) per gallon above the rate of tax levied in the adjoining state.
  2. Further, no existing city or incorporated town, the corporate limits of which did not on August 1, 1941, or planned community, the limits of which did not on May 18, 1965, extend to within two (2) miles of the state line, shall take advantage of the border rate.
  3. Additionally, no tax is imposed upon or in respect to the transactions exempt from taxation under § 26-55-207.
  4. The tax on motor fuel sold from any establishment adjacent to a federal interstate highway and within one (1) mile of a state line shall be at the rate of tax levied in the adjoining state but not exceed the rate levied in this subchapter.
2. Whenever any bridge spanning a river where the state line is in the center of the main channel of the river as defined and subject to the provisions of subsection (a) of this section shall have been or shall be abandoned, redesigned, relocated, or otherwise changed so that areas previously within eight hundred feet (800') of the Arkansas terminal of a bridge spanning a river where the state line is in the center of the main channel of the river shall no longer be in whole or in part within eight hundred feet (800') of the Arkansas terminal of the bridge, then the tax on motor fuel sold within eight hundred feet (800') of the Arkansas terminal of that bridge prior to its abandonment, redesign, relocation, or other change shall continue to be fixed on the same basis as if no abandonment, redesign, relocation, or other change of the Arkansas terminal of the bridge had been made or taken place.
3. Any distributor or dealer of motor fuel who shall sell and deliver any motor fuel within any border rate tax area, except as provided in subsection (a) of this section, shall be guilty of a misdemeanor and upon conviction shall be fined in any sum of not less than fifty dollars ($50.00) nor more than five hundred dollars ($500) or be imprisoned in the county jail for not to exceed thirty (30) days, or be both so fined and imprisoned.
4. This section shall apply to abandonments, redesign, relocation, and other changes of bridges made both before and after the passage of this section.
1. Whenever any territory included within the boundaries of any city, incorporated town, or planned community in this state is included within the border tax rate on motor fuel, as provided for in § 26-55-210, or by any other law of this state governing the border area tax rate on motor fuel, the same rate of tax on motor fuel that applies in the border tax area of the city, incorporated town, or planned community shall also apply to all sales of motor fuel within the boundaries of the city, incorporated town, or planned community.
2. Except in a city bordering a state line that is the main channel of the Mississippi River, the provisions of this section shall apply only to that territory included within the limits of the city, incorporated town, or planned community on July 1, 2001, and shall not apply to territory added to or annexed to the city, incorporated town, or planned community after July 1, 2001.
1. Any consumer of motor fuel who has purchased motor fuel within a border rate area and has obtained delivery of the motor fuel into a storage tank shall not thereafter deliver the motor fuel into an auxiliary tank attached to any motor vehicle and shall only use the motor fuel in propelling a motor vehicle as has been delivered directly from a storage tank into the standard fuel tank of a motor vehicle.
2. As used in this section, “standard fuel tank” means the fuel tank attached to the motor vehicle by the original manufacturer of the motor vehicle, except that it shall exclude any auxiliary fuel tank of a motor vehicle even if attached to a motor vehicle by the original manufacturer thereof.
3. Any consumer who violates this section shall be guilty of a misdemeanor and, upon conviction, shall be fined in any sum of not less than fifty dollars ($50.00) nor more than five hundred dollars ($500) or be imprisoned in the county jail for not to exceed thirty (30) days, or be both so fined and imprisoned.
1. It shall be unlawful for any distributor to receive, use, sell, or distribute any motor fuel or to engage in business within this state unless the distributor is the holder of an uncancelled license issued by the Secretary of the Department of Finance and Administration to engage in the business or, if the distributor is an agent, commission or otherwise, of a distributor as defined in this subchapter, unless the agent is the holder of a certified duplicate copy of an uncancelled license issued by the secretary to the agent's principal.
2. 1. Upon conviction, a person who engages in business in the State of Arkansas as a distributor without being the holder of an uncancelled license to engage in the business is guilty of an unclassified misdemeanor and shall be punished by a fine of not less than one thousand dollars ($1,000) nor more than ten thousand dollars ($10,000) or imprisonment for a term of not less than thirty (30) days and not more than one (1) year, or both fine and imprisonment.
  2. Each day or any part thereof during which any person shall engage in business as a distributor without being the holder of an uncancelled license shall constitute a separate offense within the meaning of this section.
1. To procure a distributor's license, every distributor shall file with the Secretary of the Department of Finance and Administration an application upon oath and in a form prescribed by the secretary, setting forth:
  1. The name under which the distributor will transact business within the State of Arkansas;
  2. The location, with street address, of its principal office or place of business within this state and all of its separate places of business within this state; and
  3. The name and complete residence address of the owner or the names and addresses of the partners, if the distributor is a partnership, or the names and addresses of the principal officer, if the distributor is a corporation or association.
2. 1. Concurrent with the filing of an application for a distributor's license, every distributor shall file with the secretary a bond of the character stipulated and in the amount provided for in § 26-55-222.
  2. No license shall be issued upon any application unless accompanied by the bond, nor, if the applicant is a foreign corporation, unless it is at the time properly qualified under the laws of the State of Arkansas to do business therein.
3. The secretary shall keep and file all applications and bonds with an alphabetical index together with a record of all licensed distributors.
1. The license certificate issued by the Secretary of the Department of Finance and Administration shall be displayed conspicuously in the principal place of business of the distributor in the State of Arkansas.
2. A certified duplicate copy of the license certificate shall be displayed conspicuously at each separate place of business of the distributor in the State of Arkansas. By appropriate language, the copy shall refer to and identify the agent of the distributor in charge of the separate place of business of the distributor.
1. In the event that any application for a license to transact business as a distributor in the State of Arkansas shall be filed by any person whose license shall at any time have been cancelled for cause by the Secretary of the Department of Finance and Administration, or in case the secretary shall be of the opinion that the application is not filed in good faith or in the event that the application is filed by some person as a subterfuge for the real person in interest whose license or registration shall theretofore have been cancelled for cause by the secretary, or for any other valid reason, then and in any of said events the secretary, after a hearing of which the applicant shall have been given five (5) days' notice in writing and at which the applicant shall have the right to appear in person or by counsel and present testimony, shall have and is given the right and authority to refuse to issue to the person a license certificate to transact business as a distributor in the State of Arkansas.
2. Any distributor who is aggrieved by the action of the secretary in refusing to issue the license applied for, within thirty (30) days from the time of the refusal, may appeal to the circuit court of the county of the distributor's residence where the distributor shall be entitled to a hearing de novo. An appeal shall lie from the circuit court to the Supreme Court as in other cases now provided by law.
1. 1. Every distributor shall file with the Secretary of the Department of Finance and Administration a surety bond of not less than one and one-half (1½) times or one hundred fifty percent (150%) of the prior six (6) months' average motor fuel tax due, based upon the gallonage of motor fuel to be sold or distributed as shown by the application for a permit if the applicant has not heretofore been engaged in the business of a distributor as herein defined, or as shown by sales for the previous year if the applicant theretofore has been engaged in the business in this state.
  2. However, no bond shall be filed for less than one thousand dollars ($1,000).
  3. If the secretary deems it necessary to protect the state in the collection of gasoline taxes, the secretary may require any distributor to post a bond in an amount up to three (3) times or three hundred percent (300%) of the prior six (6) months' average motor fuel tax due.
2. 1. Provided further, the secretary or the secretary's authorized agent is authorized to waive the posting of bond by any licensed motor fuel distributor that is organized and operating under the laws of Arkansas and that is wholly owned by residents of this state and who has been licensed for a period of at least three (3) years and who has not been delinquent in remitting motor fuel taxes during the three-year period immediately preceding application by the distributor for waiver of bond.
  2. If any motor fuel distributor whose bond has been waived by the secretary or the secretary's agent as authorized in this subsection subsequently becomes delinquent in remitting motor fuel taxes to the secretary, the secretary or the secretary's agent may require that the distributor post a bond in the amount required in this section, and the distributor shall not be eligible to petition for a waiver of bond for a period of three (3) years thereafter.
1. In the event that upon a hearing, of which the distributor shall be given five (5) days' notice in writing, the Secretary of the Department of Finance and Administration shall decide that the amount of the existing bond is insufficient to ensure payment to the State of Arkansas of the amount of the tax and any penalties and interest for which the distributor is or may at any time become liable, then the distributor upon the written demand of the secretary shall immediately file an additional bond in the same manner and form with a surety company thereon approved by the secretary in any amount determined by the secretary to be necessary to secure at all times the payment by the distributor to the State of Arkansas of all taxes, penalties, and interest due under the provisions of this subchapter.
2. If the distributor fails to do so, the secretary shall immediately cancel the license certificate of the distributor.
1. In the event that liability upon the bond thus filed by the distributor with the Secretary of the Department of Finance and Administration shall be discharged or reduced, whether by judgment rendered, payment made, or otherwise, or if in the opinion of the secretary any surety on the bond theretofore given shall have become unsatisfactory or unacceptable, then the secretary may require the distributor to file a new bond with a satisfactory surety in the same form and amount, failing which the secretary shall immediately cancel the license certificate of said distributor.
2. If the new bond is furnished by the distributor as above provided, the secretary shall cancel and surrender the bond of the distributor for which the new bond shall be substituted.
1. 1. Any surety on any bond furnished by a distributor as provided in §§ 26-55-222 — 26-55-225 shall be released and discharged from any and all liability to the State of Arkansas accruing on the bond after the expiration of sixty (60) days from the date upon which the surety shall have lodged with the Secretary of the Department of Finance and Administration a written request to be released and discharged.
  2. However, the request shall not operate to relieve, release, or discharge the surety from any liability already accrued, or which shall accrue, before the expiration of the sixty-day period.
2. 1. The secretary shall promptly on receipt of notice of the request notify the distributor who furnished the bond, and unless the distributor on or before the expiration of the sixty-day period files with the secretary a new bond with a surety company satisfactory to the secretary in the amount and form provided in § 26-55-222, the secretary shall immediately cancel the license of the distributor.
  2. If the new bond is furnished by the distributor as provided above, the secretary shall cancel and surrender the bond of the distributor for which the new bond shall be substituted.
1. For the purpose of determining the amount of the tax imposed by this subchapter, the Secretary of the Department of Finance and Administration may require such supporting documents as the secretary may deem necessary to assure accurate reporting.
2. 1. The reports shall be filed on forms prescribed by the secretary and shall be filed with the secretary on or before the twenty-fifth day of each calendar month following the reporting month in question.
  2. Once a distributor has become liable to file a monthly report with the secretary, the distributor must continue to file a monthly report, even though no tax is due, until such time as the distributor notifies the secretary in writing that the distributor is no longer liable for monthly reports.
3. These reports shall include the following:
  1. An itemized statement of the number of gallons of all motor fuel received during the next-preceding calendar month by the distributor, which has been produced, refined, prepared, distilled, manufactured, or compounded by the distributor in the State of Arkansas;
  2. An itemized statement of the number of gallons of all motor fuel received by the distributor in the State of Arkansas from any source whatsoever during the next-preceding calendar month as shown by the shipper's bills of lading thereof, other than motor fuel falling within the provisions of subdivision (c)(1) of this section, together with a statement showing:
    1. The date of receipt of each shipment of motor fuel;
    2. The name of the person from whom purchased or received;
    3. The point of origin and the point of destination of each shipment;
    4. The quantity of each of the purchases or shipment;
    5. The name of the carrier;
    6. The number of each tank car or tank truck;
    7. The number of gallons contained in each tank car or tank truck; and
    8. The owner of the boat, ship, barge, or vessel, if shipped by water;
  3. An itemized statement of the number of gallons of motor fuel deducted in accordance with the provisions of § 26-55-230(a)(1)(C) or § 26-55-230(a)(1)(D) in making any previous monthly report with respect to which motor fuel so deducted the tax payable under the terms of this subchapter have not theretofore been paid;
  4. An itemized statement of the number of gallons of motor fuel sold by the distributor during the preceding calendar month and exempted from the tax by § 26-55-207(1)-(4), separately itemizing the amount of motor fuel sold and claimed to be exempt under each of the subdivisions (1)-(4) of § 26-55-207, and the statement shall furnish such information relating to such sales as shall be required by the secretary and reasonably necessary to the enforcement by the secretary of the provisions of this subchapter;
  5. An itemized statement of the number of gallons of motor fuel sold by the distributor within a border rate area and at the border rate tax, as is permitted by §§ 26-55-210 and 26-55-212, together with such information relating to such sales as shall be required by the secretary and reasonably necessary to the enforcement by the secretary of the provisions of this subchapter;
  6. An itemized statement of the number of gallons of motor fuel which, during the next-preceding month, was received, within the meaning of § 26-55-202(13)(A) or § 26-55-202(13)(B), by being placed in a tank, but which had not been withdrawn therefrom at the close of the next preceding calendar month;
  7. An itemized statement of the number of gallons of motor fuel received during the next-preceding calendar month and deductible under § 26-55-230(a)(1)(D); and
  8. An itemized statement of the number of gallons of motor fuel received by the distributor during the next-preceding calendar month which were purchased by the distributor, tax-paid, and supported by copies of the seller's tax-paid invoices.
1. At the time of filing of each monthly report with the Secretary of the Department of Finance and Administration, each distributor shall pay to the secretary the full amount of the motor fuel tax for the next-preceding calendar month, which shall be computed as follows:
  1. From the sum of the total number of gallons of motor fuel received, reduced by the total number of gallons received upon which the tax has been paid as evidenced by the itemized statement filed pursuant to § 26-55-229(c)(8) by the distributor within the State of Arkansas during the next-preceding calendar month, plus the total number of gallons of motor fuel deducted on any previous monthly report of the distributor under the provisions of subdivisions (a)(1)(C) and (D) of this section with respect to which the tax payable under this subchapter remains unpaid, shall be made the following deductions:
    1. The total number of gallons of motor fuel received by the distributor within the State of Arkansas and sold or otherwise disposed of during the next-preceding calendar month as set forth in § 26-55-207;
    2. The total number of gallons of motor fuel received by the distributor within the State of Arkansas and sold or otherwise disposed of during the next-preceding calendar month as set forth in § 26-55-210;
    3. The total number of gallons of motor fuel which, during any previous calendar month, was received, within the meaning of § 26-55-202(13)(A) or § 26-55-202(13)(B), by being placed in a tank but had not been withdrawn therefrom at the close of the next-preceding calendar month;
    4. The total number of gallons of motor fuel received during any previous calendar month, within the meaning of § 26-55-202(13)(A), by being placed in a tank, which was thereafter delivered by the person receiving it to a common carrier pipeline for shipment or delivery to a point in Arkansas, but had not been, at the close of the next-preceding calendar month, delivered by the pipeline at its destination, even though because of being mingled in the common carrier pipeline system with other motor fuel, the motor fuel to be delivered to the point of destination is not the identical motor fuel delivered by the shipper to the common carrier pipeline;
    5. 1. That number of gallons of motor fuel lost due to fire, flood, storm, theft, or other cause beyond the distributor's control, other than through evaporation.
      2. The deduction for the loss may be included in the report filed for the month in which the loss occurred or in any subsequent report filed within a period of one (1) year; and
    6. 1. That number of gallons of motor fuel which shall be equal to three percent (3%) of the first one million gallons (1,000,000 gals.), and no allowance for the remaining gallons of the total number of gallons of motor fuel received by the distributor during the next-preceding calendar month, less the total number of gallons deducted under subdivisions (a)(1)(A)-(E) of this section.
      2. It is determined by the General Assembly that three percent (3%) of the first one million gallons (1,000,000 gals.) and no allowance for the remaining gallons so received is the actual and average amount of loss resulting from evaporation, shrinkage, and the losses resulting from unknown causes irrespective of the amount thereof, and the cost of collection;
  2. The number of gallons remaining after the deductions set forth in subdivision (a)(1) of this section have been made shall be multiplied by the rate of tax under § 26-55-205; and
  3. The remaining number of gallons computed on a volumetric basis shall be multiplied by the rate provided by law in the adjoining state, the rate not to exceed the rate provided by § 26-55-205, and the resulting figure, together with the figure obtained in subdivision (a)(2) of this section, shall be the total amount of motor fuel tax due for the next-preceding calendar month.
2. In reporting and computing this tax, distributors shall adjust all volume measurements of motor fuel to a temperature of sixty degrees Fahrenheit (60° F).
3. The secretary by rule shall provide for the payment and collection of the motor fuel tax when it is due but which under the terms of this subchapter is not required to be remitted by a distributor.
1. 1. If a distributor at any time files a false monthly report of the data or information required by this subchapter or fails, refuses, or neglects to file the monthly report required by this subchapter, or to pay the full amount of the tax as required by this subchapter, the Secretary of the Department of Finance and Administration may give notice to the distributor of an intention to revoke the license of the distributor.
  2. The distributor shall be entitled to a period of five (5) days after receipt of the notice from the secretary, within which to apply for a hearing before the secretary on the question of having the distributor's license revoked. The secretary shall grant a hearing at such time and place as the secretary may designate of which the distributor shall have five (5) days' advance notice in writing.
  3. After the hearing, at which time the distributor shall be entitled to present evidence and argument of counsel, the secretary shall decide whether the distributor's license shall be revoked.
  4. 1. Upon the issuance of an order revoking the license, the distributor shall be entitled to an appeal to the circuit court in the county where the distributor may do business where the question shall be tried de novo.
    2. An appeal shall lie from the circuit court of that county as in other cases provided by law.
  5. If the distributor fails to apply for a hearing within the time set out in subdivision (a)(2) of this section, the secretary may forthwith cancel the license of the distributor and notify the distributor of the cancellation by registered mail to the last known address of the distributor appearing on the files of the secretary. The secretary shall also notify the surety company on the distributor's bond in like manner.
2. 1. Upon receipt of a written request from any duly licensed distributor under this subchapter to cancel the license issued to the distributor, the secretary shall have the power to cancel the license effective sixty (60) days from the date of the receipt of the written request.
  2. However, no license shall be cancelled upon the request of any distributor unless and until the distributor prior to the date of the cancellation shall have paid to the State of Arkansas all excise taxes payable under the laws of the State of Arkansas, together with any and all penalties, interest, and fines accruing under any of the provisions of this subchapter, and unless and until the distributor shall have surrendered to the secretary the license certificate theretofore issued to the distributor.
3. If upon investigation the secretary ascertains and finds that any person to whom a license has been issued under this subchapter is no longer engaged in the receipt, use, or sale of motor fuel as a distributor and has not been so engaged for a period of sixty (60) days, the secretary shall have the power to cancel the license by giving the person thirty (30) days' notice of the cancellation mailed to the last known address of the person, in which event the license certificate theretofore issued to the person shall be surrendered to the secretary.
4. In the event that the license of any distributor shall be cancelled by the secretary as provided in this section and in the further event that the distributor shall have paid to the State of Arkansas all excise taxes due and payable by it under this subchapter, together with any and all penalties accruing under any of the provisions of this subchapter, then the secretary shall cancel and surrender the bond filed by the distributor.
1. When any distributor fails to file its monthly report with the Secretary of the Department of Finance and Administration on or before the time fixed in this subchapter for the filing thereof, when the distributor fails to submit the data outlined in §§ 26-55-229 and 26-55-230 in the monthly report, or when the distributor fails to pay to the secretary the amount of excise taxes due to the State of Arkansas when the excise taxes are payable, the distributor shall be subject to applicable penalty and interest provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq.
2. 1. If the excise tax is not paid within sixty (60) days after the date the excise tax is due, then the secretary shall suspend the license of the distributor.
  2. 1. When the secretary issues a notice of proposed assessment to the distributor under § 26-18-403, the secretary may notify the bonding company of the excise tax delinquency.
    2. At the end of the ten-day demand for payment period that begins on the date a final assessment is issued under § 26-18-401, the secretary shall notify the bonding company of the excise tax delinquency and declare the bond forfeited.
1. Every person or terminal purchasing or otherwise acquiring motor fuel by pipeline, tank car, tank truck, or cargo lot and selling, using, or otherwise disposing of the motor fuel for delivery in Arkansas not required by a provision of this subchapter to be licensed as a distributor in motor fuel shall file a statement setting forth the:
  1. Name under which the person or terminal is transacting business within the State of Arkansas and the location with the street number address of that person's or terminal's principal office or place of business within the state; and
  2. Name and address of the owner, names and addresses of the partners if the person or terminal is a partnership, or names and addresses of the principal officers if the person or terminal is a corporation or association.
2. 1. On or before the twenty-fifth day of each calendar month on forms prescribed by the Secretary of the Department of Finance and Administration, the person shall report to the secretary all purchases or other acquisitions and sales or other disposition of motor fuel during the next-preceding calendar month giving a record of each tank car, tank truck, or cargo lot delivered to a point within the state and of all motor fuel otherwise delivered to the person.
  2. The report shall set forth:
    1. From whom each tank car or cargo lot was purchased or otherwise acquired;
    2. The point of shipment;
    3. To whom sold or shipped;
    4. The point of delivery;
    5. The date of shipment;
    6. The name of the carrier;
    7. The initials and number of the tank car;
    8. The number of gallons contained in the tank car if shipped by rail;
    9. The name and owner of the boat, barge, or vessel, and the number of gallons contained in the boat, barge, or vessel if shipped by water; and
    10. Any other additional information the secretary may require relative to the motor fuel.
3. On or before the twenty-fifth day of each calendar month on forms prescribed by the secretary, the terminal shall report to the secretary all purchases or other acquisitions and sales or other disposition of motor fuel during the next-preceding calendar month, which report shall include the following:
  1. Beginning inventories in gallons of motor fuel in storage;
  2. Ending inventories in gallons of motor fuel in storage;
  3. Withdrawals of motor fuel in gallons from the pipeline outlet resulting in additions of motor fuel to storage, including the name of the distributor licensed as an importer who requested the placement of the motor fuel into storage; and
  4. Removals of motor fuel from storage, specifically including:
    1. Bill of lading numbers which represent physical movements of the motor fuel;
    2. The date of each removal;
    3. The quantity in gallons of motor fuel so removed;
    4. The person who had the motor fuel available for that particular removal; and
    5. The person possessing a license from the secretary who requested the removal of the motor fuel from that storage.
4. When any person or terminal purchasing or otherwise acquiring motor fuel by pipeline, in a tank car, tank truck, or cargo lot and selling or otherwise disposing of the motor fuel for delivery in Arkansas and not required by a provision of this subchapter to register as a distributor in motor fuel, fails to submit the person's or terminal's monthly report to the secretary by the twenty-fifth day of each calendar month or when the person or terminal fails to submit in the monthly report the data required by this subchapter, the person or terminal shall be guilty of a violation and shall be fined an amount not greater than one hundred dollars ($100) for the first offense and shall be fined an amount not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each subsequent offense.
1. Every railroad company, and every street, suburban, or interurban railroad company, every pipeline company, every water transportation company, and every common carrier transporting motor fuel, kerosene, or other hydrocarbon products, either in interstate or in intrastate commerce, to points within Arkansas, and every person transporting motor fuel or kerosene by whatever manner to a point within the state from any point outside of the state shall report under oath to the Secretary of the Department of Finance and Administration, on forms prescribed by the secretary, all deliveries of motor fuel, kerosene, or other hydrocarbon products, so made to points within Arkansas.
2. The reports shall cover monthly periods and shall be submitted within twenty-five (25) days after the close of the month covered by the report and shall show:
  1. The name and address of the person to whom the deliveries of motor fuel have in fact been made;
  2. The name and address of the originally named consignee if motor fuel has been delivered to any other than the originally named consignee;
  3. The point of origin, the point of delivery, the date of delivery, and the number and initials of each tank car and the number of gallons contained therein if shipped by rail;
  4. The name of the boat, barge, or vessel and the number of gallons contained therein if shipped by water;
  5. The license number of each tank truck, the number of gallons contained therein, and the bill of lading number, if transported by motor truck;
  6. The point of origin, the name and address of the person or terminal to whom the delivery was made, the date of the delivery, and the quantity of motor fuel delivered, if shipped by pipeline company; and
  7. The manner and quantities, if delivered by other means, in which the delivery is made.
3. The reports shall also show such additional information relative to shipments of motor fuel as the secretary may require.
1. 1. Whenever a distributor ceases to engage in business as a distributor within the State of Arkansas by reason of the discontinuance, sale, or transfer of the business of the distributor, it shall be the duty of the distributor to notify the Secretary of the Department of Finance and Administration in writing at least ten (10) days prior to the time the discontinuance, sale, or transfer takes effect.
  2. The notice shall give the date of discontinuance and, in the event of a sale or transfer of the business, the date thereof and the name and address of the purchaser or transferee.
2. 1. All taxes, penalties, and interest under this subchapter, not yet due and payable under the provisions of this subchapter, together with any and all interest accruing or penalties imposed under this subchapter, notwithstanding any provisions thereof, shall become due and payable concurrently with the discontinuance, sale, or transfer.
  2. It shall be the duty of any distributor concurrently with the discontinuance, sale, or transfer to make a report and pay all taxes, interest, and penalties, and to surrender to the secretary the license certificate theretofore issued to the distributor by the secretary.
3. Unless the notice provided for in subsection (a) of this section shall have been given to the secretary as provided in subsection (a) of this section, the purchaser or transferee shall be liable to the State of Arkansas for the amount of all taxes, penalties, and interest under this subchapter accrued against any distributor selling or transferring the distributor's business, on the date of the sale or transfer but only to the extent of the value of the property and business acquired from the distributor.
4. Upon conviction, a person violating this section is guilty of an unclassified misdemeanor and shall be sentenced to pay a fine of not less than fifty dollars ($50.00) nor more than three hundred dollars ($300) and costs of the prosecution or imprisonment for not more than one (1) year, or both.
1. If any person liable for the tax imposed by the provisions of this subchapter neglects or refuses to pay the tax, the amount of the tax, including any interest, penalty, or addition to the tax, together with any costs that may accrue in addition thereto, shall be a lien in favor of the state upon all franchises, property, and rights to property, whether real or personal, then belonging to or thereafter acquired by the person whether the property is employed by the person in the prosecution of business or is in the hands of an assignee, trustee, or receiver for the benefit of creditors from the date the taxes are due and payable as provided in this subchapter.
2. 1. The lien may be enforced by the Secretary of the Department of Finance and Administration by filing a certificate of indebtedness as provided for in § 26-18-701 or by any other legal means.
  2. The action of the secretary in attempting to collect the delinquent taxes by issuing the certificate of indebtedness shall not be construed to be an election of remedies.
1. Neither the sheriff of any county where the property affected is situated nor any receiver, assignee, or other officer shall sell the property or franchise of any person who is a distributor without first filing with the Secretary of the Department of Finance and Administration a statement containing:
  1. The name of the plaintiff or party at whose instance or upon whose account the sale is made;
  2. The name of the person whose property or franchise is to be sold;
  3. The time and place of sale;
  4. The nature of the property; and
  5. The location of the property.
2. It shall be the duty of the secretary, after receiving notice as provided in subsection (a) of this section, to furnish to the sheriff, receiver, assignee, or other officer having charge of the sale, certified copies of all motor fuel tax, penalties, and interest on file as liens against the person and, in the event that there are no liens, a certificate showing that fact. The certified copies of the certificate shall be publicly read by that officer at and immediately before the sale of the property or franchise of the person.
3. It shall be the duty of the secretary to furnish to any person applying therefor a certificate showing the amount of all liens for motor fuel tax, penalties, and interest that may be in the files of the secretary against any person under the provisions of this subchapter.
1. In the event it appears to the Secretary of the Department of Finance and Administration that any taxes or penalties imposed by this subchapter have been erroneously or illegally collected from any distributor, the secretary shall certify the amount thereof and authorize and permit the distributor to make an equivalent deduction from the distributor's next motor fuel tax payment to the State of Arkansas.
2. In the event any distributor sustains a loss of motor fuel due to fire, flood, storm, theft, or other causes beyond the distributor's control other than through evaporation, which product has been received as defined by § 26-55-202(13), the secretary shall authorize and permit the distributor to deduct the quantity so lost from the quantity subject to tax on the motor fuel tax report filed for the month in which the loss occurred or any subsequent report filed within a period of one (1) year. However, the same loss may be allowed only one (1) time.
3. 1. Before the secretary shall certify or authorize any distributor to make any deduction or take any credit on its reports on account of any tax having been erroneously or illegally collected or on account of any loss as provided in subsections (a) and (b) of this section, satisfactory evidence, upon such forms and in such a manner as shall be prescribed by the Revenue Division of the Department of Finance and Administration, shall be submitted to the supervisor of the Motor Fuel Tax Section of the Department of Finance and Administration, who shall determine from the evidence if any deduction or credit is to be allowed.
  2. Thereupon the supervisor of the section shall transmit to the secretary his or her certificate of approval, and the secretary may in his or her discretion allow the deduction or credit in the amount the secretary thinks proper or may reject the deduction or credit altogether.
  3. The rejection or confirmation of the deduction or credit shall be final, and upon the confirmation by the secretary, the deduction or credit shall then be allowed in due course by the supervisor of the section.
1. Any person who knowingly transports or causes to be transported any motor fuel in any manner in violation of the provisions of this subchapter in addition to other penalties and punishment provided for in this subchapter shall be subject to the immediate confiscation of the tank truck or vehicle and the contents therein which are thus unlawfully transported, by the Secretary of the Department of Finance and Administration or the secretary's agents.
2. Unless the operator or owner of the tank truck or vehicle can prove to the satisfaction of the secretary at a hearing for that purpose within ten (10) days that the motor fuel was being transported, transferred, or delivered in accordance with this subchapter or any other act affecting the transportation of motor fuel, and in accordance with any rules issued pursuant to this subchapter or any other act, the tank truck or vehicle and the contents therein shall be sold by the secretary at auction without any recourse or liability on the secretary or any of the secretary's agents or the State of Arkansas.
1. No person, firm, or corporation shall secure a refund of tax under this subchapter unless that person is the holder of an unrevoked permit issued by the Secretary of the Department of Finance and Administration before the purchase of the motor fuel.
2. The permit shall be numbered and issued annually and shall entitle the holder to make application for refund under this subchapter.
3. Applications for the permits shall be filed with the secretary on forms prescribed by the secretary and shall contain the same information, so far as applicable, as is required in § 26-55-305 [repealed], and such other information as the secretary may require.
1. Upon conviction, a person transporting fuels into the State of Arkansas without the appropriate bill of lading and import/export load permit or interstate shipment record as required by this subchapter is guilty of a violation and shall be fined not more than two thousand five hundred dollars ($2,500), of which one-half (1/2) shall be deposited with the Treasurer of State as special highway revenues to be disbursed in the same manner and to be used for the same purposes set out in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
2. Upon conviction, a person is guilty of a violation and subject to the penalty in subsection (a) of this section if the person:
  1. Makes or assists another person to make a false or fraudulent statement in any report required by this subchapter, the Motor Fuel Tax Law, § 26-55-201 et seq., or the Special Motor Fuels Tax Law, § 26-56-101 et seq.;
  2. Fails to include any information demanded by this subchapter, the Motor Fuel Tax Law, § 26-55-201 et seq., or the Special Motor Fuels Tax Law, § 26-56-101 et seq.; or
  3. Fails to produce upon request of proper authority any information required in this subchapter, the Motor Fuel Tax Law, § 26-55-201 et seq., or the Special Motor Fuels Tax Law, § 26-56-101 et seq.
3. Any motor vehicle, including the cargo thereof, found to have been in violation of any of the provisions of this section shall be impounded by the Director of State Highways and Transportation pending disposition under this subchapter.
1. No person shall import or export fuels into or out of this state, other than by pipeline or rail, for sale or use within this state without:
  1. Being a supplier or distributor, licensed by the Secretary of the Department of Finance and Administration under the laws of the State of Arkansas, as those terms are defined in the Motor Fuel Tax Law, § 26-55-201 et seq., and the Special Motor Fuels Tax Law, § 26-56-101 et seq.; and
  2. Acquiring an import/export load permit issued by the Director of State Highways and Transportation or his or her designee for each load.
2. 1. No common carrier pipeline company shall import or export fuels by pipeline without filing a copy of all reports, required by other laws of this state, with the director.
  2. Railroad companies are exempt from the provisions of this subchapter except in those cases where the railroad company is importing fuels for other than off-road usage or for sale to licensed suppliers or distributors.
3. 1. The director or his or her designee shall issue import/export load permits at no charge and on those forms provided by the director and in the manner provided by him or her.
  2. The director shall provide a toll-free telephone number for both interstate and intrastate usage for those seeking the permits.
  3. 1. The director shall prescribe and publish such rules as may be necessary for the enforcement of this subchapter.
    2. The rules shall provide that a licensed supplier or distributor upon demand may obtain a supply of prenumbered permits for use as required under this subchapter so long as the supplier or distributor has not been found in violation of this subchapter. However, each permit used must be accompanied by the relevant bill of lading when filed with the director.
4. The director shall have the authority to station one (1) or more representatives at each port of entry or pipeline terminal to assist in the enforcement of this subchapter.
5. The import/export load permit shall be on a form issued by the director.
1. All shipments or movements of fuels, except by pipeline or rail, for sale or use without, or when imported for sale or use within, the state shall be accompanied by a bill of lading which shall show the following:
  1. The seller's or the purchaser's supplier or distributor license number;
  2. The origin of the transport trip;
  3. The approximate destination or destinations of the transport trip;
  4. The type or types of fuels being transported and quantity or quantities of fuels to be delivered to each destination;
  5. The person or persons responsible for the payment of the fuels tax; and
  6. Such other information or forms as the Director of State Highways and Transportation by rule may adopt or require to implement the intent of this subchapter.
2. 1. Any transporter of fuels by any means, except by pipeline or rail, shall be required to produce a copy of the bill of lading containing the information required by this section and a copy of the permit, if required by § 26-55-605, for inspection by any enforcement officer within the State of Arkansas.
  2. Any failure to have the bill of lading and a copy of the permit in the vehicle, or to produce it as prescribed, shall be an offense punishable as set forth in § 26-55-603.
3. The bill of lading required by this section may be on the transporter's own form, but shall contain the information set out above.
1. 1. All transporters of fuels shall be responsible for retaining and safeguarding in their possession a clear and legible copy of all documentation required by this subchapter covering the cargo being transported.
  2. If transportation is by motor vehicle, the responsibility for the retention and safeguarding shall commence at the time the driver of the vehicle enters the boundaries of the State of Arkansas or assumes responsibility for the transport of the cargo which shall continue unabated until that point at which the driver of the vehicle's responsibility for the transport of the cargo is terminated.
  3. In all cases of highway transport by motor vehicle, the copy of the bill of lading and import/export load permit shall be retained in the cab of the vehicle during the period of the operator's responsibility.
2. Fuels transported in interstate commerce through Arkansas, the origin of which is outside of Arkansas and destination of which is outside of Arkansas, shall be exempt from the import/export load permit requirements of § 26-55-605.
1. In order to enforce the provisions of this subchapter, any officer of the Arkansas Highway Police Division of the Arkansas Department of Transportation shall have the authority to stop any vehicle appearing to be handling or transporting fuels for the purpose of examining the documents required by this subchapter or to ensure the operator's compliance with this subchapter.
2. If after the examination or investigation it is determined that the transporter should have secured an import/export load permit as required by this subchapter, but has failed to secure that permit, the enforcement officer shall immediately cause the offending vehicle and its operator to be removed to the nearest Arkansas Department of Transportation property, port of entry, or any designated location where the Secretary of the Department of Finance and Administration's representative shall immediately assess the tax on that load together with the penalty provided in § 26-55-609 against the person found to be responsible for the payment of the tax.
3. Notice upon the person shall be effectuated by delivering written notice of the assessment to the operator of the vehicle at that time.
4. The Director of State Highways and Transportation or his or her representative shall be authorized to impound any vehicle and refuse authority to travel on Arkansas highways to any vehicle which, previous to the entry into this state, has not complied with all requirements of this subchapter.
5. Further, travel shall not be authorized until the criminal fines or bonds have been posted and the taxes and penalties paid in full.
1. Any person who shall violate any provision of this subchapter shall be immediately responsible for the taxes, as imposed by this state, on the fuels involved in the violation plus twenty percent (20%) as a penalty.
2. All fines and penalties imposed pursuant to this subchapter shall be in addition to any and all penalties imposed pursuant to the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. 1. Each domestic refiner, importer, exporter, supplier, or distributor taking possession of fuels within the State of Arkansas for delivery without the state shall be licensed and bonded by the Motor Fuel Tax Section of the Department of Finance and Administration.
  2. Failure to obtain a license as required by the Motor Fuel Tax Law, § 26-55-201 et seq., or the Special Motor Fuels Tax Law, § 26-56-101 et seq., or other pertinent law, shall constitute a violation of that law and the person shall be subject to the penalties set forth in § 26-55-603.
2. 1. Each domestic refiner, importer, exporter, supplier, or distributor taking possession of fuels within this state shall include the license number of each licensed distributor or special fuels supplier on each cargo manifest, bill of lading, delivery ticket, or other document.
  2. The failure to so include the license number shall constitute a violation of this subchapter and shall be punishable in accordance with the provisions of § 26-55-603.
3. Persons taking delivery at river ports, as defined in § 26-55-601, shall have the responsibility of complying with all the provisions of this subchapter and are subject to the applicable penalties.
4. Domestic refiners, importers, exporters, suppliers, or distributors of fuels and other accounts acquiring fuels from without the state for delivery within the state shall be licensed pursuant to the laws of this state and subject to all provisions contained in this subchapter and are subject to the applicable penalties and fines set out by § 26-55-603.
1. Before any person, firm, or corporation subject to § 26-55-702 imports for use on the highways of this state gasoline in the fuel supply tanks of any motor vehicle, or in any other container, with a gross loaded weight of twenty-six thousand one pounds (26,001 lbs.) or more, the person shall file application for and obtain a license from the Secretary of the Department of Finance and Administration.
2. The application required by this section shall be verified by affidavit and filed on a form prescribed and furnished by the secretary, stating the name, address, kind of business of the applicant, the applicant's principal place of business, and such other relevant information as the secretary may require.
3. The applications must also contain, as a condition to the issuance of the license, an agreement by the applicant to comply with the requirements of the subchapter and the lawful rules of the secretary.
1. Before any license application shall be approved by the Secretary of the Department of Finance and Administration, the applicant shall file a bond, with surety satisfactory to the secretary, payable to the State of Arkansas and conditioned upon the applicant's compliance with the provisions of this subchapter and the rules of the secretary.
2. 1. The bond shall be in the sum of not less than five hundred dollars ($500) and not more than twenty thousand dollars ($20,000), the amount to be fixed in each case by the secretary.
  2. However, the amount of any bond may be increased or decreased within the foregoing limits by the secretary at any time.
3. No bond shall be cancelled by the surety thereon until the expiration of sixty (60) days after receipt of notice of the cancellation by the secretary, and the cancellation shall have no retroactive effect.
1. Upon approval of the application and bond, the Secretary of the Department of Finance and Administration shall issue to the applicant a nontransferable fuel user's license bearing a distinctive number, to remain in full force until surrendered, suspended, or cancelled in the manner provided in this subchapter.
2. Each license shall be valid only for the operation of motor vehicles on the highways of this state by the person to whom it is issued, including motor vehicles transporting persons or property in furtherance of the business of the licensee under a lease, a contract, or any other arrangement, whether permanent or temporary in nature.
1. 1. Before any motor vehicle with a gross loaded weight of twenty-six thousand one pounds (26,001 lbs.) or more is operated on the public highways of this state, the operation of which is subject to the tax levied by this subchapter, the Secretary of the Department of Finance and Administration shall issue to each permitted gasoline, diesel, and liquefied petroleum gas user a distinctive marking to be prominently displayed on the passenger door of each vehicle traveling the public highways within this state.
  2. This marking shall be a nontransferable marking which shall be renewed on an annual basis.
2. Applications for gasoline, diesel, and liquefied petroleum gas users' permits must be on a form prescribed and furnished by the secretary, to include such relevant information as deemed necessary by the secretary, for the proper administration of this subchapter.
3. The secretary shall maintain a record of the quantity of markings issued each permitted user.
1. 1. Every person, firm, or corporation licensed under this subchapter on or before the last day of the month following the end of each calendar quarter shall file with the Secretary of the Department of Finance and Administration, on forms prescribed by the secretary, a report showing the quantities of gasoline purchased and used in this state during the preceding calendar quarter, together with payment of the tax due thereon.
  2. The number of gallons of motor fuel upon which the tax has been paid by an interstate user shall be determined from the form obtained by the interstate user from a licensed dealer or licensed bulk distributor within the state. This form must contain the information required by § 26-56-209.
2. If it shall be determined by the quarterly reports filed with the secretary that the interstate user has used more gallons of gasoline in this state than the gasoline tax due thereon has been paid, the interstate user shall remit to the secretary an excise tax of eighteen and one-half cents (18½¢) per gallon on the gasoline.
3. Interstate users may not take credit on reports at a tax rate in excess of that actually paid.
4. 1. For the purpose of determining whether a licensed interstate user owes tax or is entitled to a credit or refund, the licensed interstate user shall determine the average miles per gallon of fuel used. The average miles per gallon shall be determined by dividing the total miles traveled in all jurisdictions by the total gallons of fuel used in all jurisdictions.
  2. The licensed interstate user shall then determine the total amount of fuel used within the State of Arkansas by dividing the total number of miles traveled within the State of Arkansas by the average miles per gallon.
  3. The taxpayer's tax liability shall be calculated by multiplying the number of gallons of fuel used within the State of Arkansas by eighteen and one-half cents (18½¢) per gallon. A taxpayer shall be entitled to credits against his or her tax liability for tax-paid fuel purchased within the State of Arkansas.
5. For any licensed interstate user who fails to maintain adequate mileage or fuel records as required by § 26-55-719 for the purpose of determining the amount the interstate user owes the State of Arkansas for tax on motor fuel used in this state as provided in this section, the number of gallons of motor fuel used in this state shall be determined by an assessment based on the following mileage factors per gallon of motor fuel as compared to the appropriate class of vehicle set out in subsection (f) of this section.
6. 1. For the purposes of this section:
    1. All automobiles, except buses, with a capacity of less than eight (8) passengers shall be deemed to be Class A vehicles;
    2. All truck-type vehicles, except buses, with a factory rating and gross loaded weight of less than twenty-two thousand five hundred pounds (22,500 lbs.) shall be deemed to be Class B vehicles;
    3. All other vehicles, except buses, with a factory rating in excess of twenty-two thousand five hundred pounds (22,500 lbs.), or whose total gross loaded weight exceeds twenty-two thousand five hundred pounds (22,500 lbs.), shall be deemed to be Class C vehicles; and
    4. All buses rated and licensed as such shall be deemed to be Class D vehicles.
  2. The mileage factor per gallon of motor fuel for:
    1. Class A vehicles shall be twelve (12) miles;
    2. Class B vehicles shall be eight (8) miles;
    3. Class C vehicles shall be five (5) miles; and
    4. Class D vehicles shall be six (6) miles.
  3. These mileage factors shall be utilized in conjunction with the Arkansas mileage as determined through an audit and based upon the best records available regardless of source.
7. 1. For the purposes of determining the amount any unlicensed or unbonded user owes the State of Arkansas for tax on motor fuel used in this state, only the above mileage factors per gallon of motor fuel for the applicable vehicle shall be utilized.
  2. If a quarterly report of an interstate user results in a net credit, the interstate user may elect to have the credit carried forward and applied against the motor fuel tax due for the succeeding eight (8) quarters or until the credit is completely used, whichever occurs first. In the alternative, a taxpayer who is entitled to a net credit on his or her quarterly fuel use tax report may elect to have the amount of credit refunded to him or her.
  3. An interstate user who had a total tax liability for motor fuel taxes during the previous calendar year of less than one hundred dollars ($100) upon application to the secretary may obtain permission to report the interstate user's motor fuel tax liability on an annual basis. The annual report shall be due on or before the last day of the month following the end of each fiscal year.
8. The secretary shall prescribe the appropriate forms necessary for the administration of this subchapter. The secretary may make appropriate rules necessary to ensure the accurate reporting of mileage traveled and gallons used and purchased by the licensed interstate users.
1. Claims for refunds of motor fuel taxes by nonbonded users of motor fuel or claims for credits for motor fuel taxes shall not be valid unless properly presented upon motor fuel tax forms as promulgated by and as required by the Secretary of the Department of Finance and Administration.
2. 1. The secretary may assess and charge a fee upon all forms furnished by the Revenue Division of the Department of Finance and Administration when those forms pertain to the motor fuel tax laws of this state.
  2. The fees shall be based on the cost of the forms and moneys expended for postage, processing, and handling of the forms.
  3. The fees derived from motor fuel tax forms shall be deposited into the State Treasury as special revenues, there to be distributed monthly by the Treasurer of State to the Constitutional Officers Fund and the State Central Services Fund.
3. The secretary shall not furnish forms for cash refunds or credits for motor fuel taxes to nonbonded users of motor fuel unless and until the General Assembly provides by law for the issuance of credits and cash refunds to nonbonded users of motor fuel who qualify for the credits or cash refunds on motor fuel taxes.
4. Motor fuel users may not claim a credit for motor fuel taxes beyond the date of the next sucessive report after the period in which the credit arose.
1. 1. The Secretary of the Department of Finance and Administration shall quarterly determine the amount estimated to be necessary to pay refunds to interstate users of motor fuels who are entitled to refunds with respect to a portion of the motor fuel taxes paid in this state as authorized in § 26-55-710, and upon certification by the secretary, the Treasurer of State shall transfer from the gross amount of motor fuel taxes collected each month the amount so certified and shall credit it to the Interstate Motor Fuel Tax Refund Fund, which is established on the books of the State Treasury, from which the Department of Finance and Administration shall make refunds as provided by law.
  2. The transfers from the gross motor fuel taxes collected each month shall be after deducting allowances for bad checks or claims but before making any other distribution thereof as provided by law.
2. All warrants drawn against the fund which are not presented for payment within one (1) year of issuance shall be void.
3. Neither the secretary nor any member or employee of the department shall be held personally liable for making any refund by reason of a fraudulent claim being filed as a basis for that refund.
4. The secretary is authorized to promulgate rules and to prescribe the necessary forms required for the administration of claims for tax refunds from interstate users of motor fuels in this state as authorized by law, which rules shall be in conformance with the following requirements:
  1. The secretary shall first determine with respect to each refund claim filed that the bond of the interstate user is adequate to compensate the State of Arkansas for any losses with respect to the recovery of any refunds illegally claimed by the interstate user, and the secretary may require the increase of the bond if the secretary determines it to be inadequate before approving any claim for refund;
  2. Each interstate user of motor fuels claiming refunds shall maintain adequate records to substantiate each claim for refund, and the secretary may reject any claim for refund if the secretary determines the applicant has not maintained adequate records or has not conformed to the rules of the department in filing the claim;
  3. Each claim for refund shall be upon the request of the interstate user, which shall be verified by the interstate user as to its accuracy and validity; and
  4. 1. Each quarterly report filed by a licensed interstate user of motor fuels with the department, shall reflect thereon the amount of motor fuels purchased for use in Arkansas during the quarter, the number of gallons of motor fuels upon which taxes are due the State of Arkansas for the quarter, and the excess gallonage upon which the interstate user is entitled to refunds.
    2. At the end of each calendar quarter, the licensed interstate user may make application for refund with respect to the number of gallons of motor fuels upon which the motor fuels taxes have been paid during the calendar quarter for which the interstate user is entitled to refund.
1. If a person who has not obtained a fuel user's license from this state, and who is nevertheless determined a fuel user, leaves the State of Arkansas by a state highway or other road not equipped with a permanent port of entry or exit and has not paid the motor fuel tax or has not purchased tax-paid motor fuel from a licensed dealer in an amount equal to the number of gallons used upon the highways of the State of Arkansas, he or she shall be liable for the payment of the tax due, together with the penalties as set out in § 26-55-716.
2. If an unlicensed fuel user is within one (1) mile of the state line on the way out of the state and does not have in his or her possession a form issued by a licensed dealer showing the number of gallons purchased equal to the amount used in traveling upon the highways of the State of Arkansas, it shall be prima facie evidence of his or her failure to comply with the requirements of this subchapter, and he or she shall be liable for the payment of the tax due, plus the fine as set out in § 26-55-718.
3. In the event an unlicensed fuel user enters the State of Arkansas via a state highway not equipped with a permanent port of entry, and the driver of the vehicle does not receive an entry form, then the burden of proof of the point of entry and time of entry for the purpose of determining the miles traveled and the tax due shall be upon the driver or owner of the vehicle.
1. Upon conviction, a person who uses gasoline in this state and fails to pay the tax levied by this subchapter or any person who makes a false or fraudulent report under this subchapter or who otherwise violates this subchapter is guilty of an unclassified misdemeanor and shall be punished by a fine of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) or by imprisonment for not more than one (1) year, or by both fine and imprisonment.
2. Each separate day of violation is a separate offense.
1. Each person, firm, or corporation subject to this subchapter must maintain and keep for a period of three (3) years records of mileage traveled by vehicles operated in this state, together with inventories, withdrawals, purchases supported by invoices, and all relevant records and papers that may be required by the Secretary of the Department of Finance and Administration.
2. The secretary or his or her authorized representative shall be entitled to inspect these records at any time.
1. All licensed motor fuel user and distillate special fuel user out-of-state trucks with a gross loaded weight of twenty-six thousand one pounds (26,001 lbs.) or more entering the State of Arkansas at the point of entry shall secure a copy of an entry slip from the Secretary of the Department of Finance and Administration or his or her authorized agent or employee.
2. The entry slip shall be signed by the secretary or his or her authorized agent or employee, and the entry slip shall also be signed by the driver of the vehicle.
3. The entry slip shall contain the following information:
  1. Name and address of the owner or the operator of the vehicle;
  2. State of registration;
  3. License number;
  4. Speedometer reading;
  5. Destination and point of leaving state; and
  6. Description of vehicle.
4. The entry slip shall remain in the vehicle for the remainder of the trip over the highways of this state and shall be produced for the inspection of the secretary or his or her authorized employee or representative, at any point within the state and shall also be produced at the port of exit to the secretary or his or her authorized agent or employee, for determination of any fuel taxes due the state.
5. 1. For the purpose of determining the amount the interstate user owes the State of Arkansas for tax on motor fuel or distillate special fuel used in this state as provided in this section, the number of gallons of motor fuel or distillate special fuel used in this state shall be determined by an assessment based on the following mileage factors per gallon of motor fuel or distillate special fuel as compared to the appropriate class of vehicle set out in subdivision (e)(2) of this section.
  2. For the purposes of this section:
    1. All automobiles, except buses, with a capacity of less than eight (8) passengers shall be deemed to be Class A vehicles;
    2. All truck-type vehicles, except buses, with a factory rating and gross loaded weight of less than twenty-two thousand five hundred pounds (22,500 lbs.), shall be deemed to be Class B vehicles;
    3. All other vehicles except buses, with a factory rating in excess of twenty-two thousand five hundred pounds (22,500 lbs.), or whose total gross loaded weight exceeds twenty-two thousand five hundred pounds (22,500 lbs.) shall be deemed to be Class C vehicles; and
    4. All buses rated and licensed as such shall be deemed to be Class D vehicles.
  3. The mileage factor per gallon of motor fuel or distillate special fuel for:
    1. Class A vehicles shall be twelve (12) miles;
    2. Class B vehicles shall be eight (8) miles;
    3. Class C vehicles shall be five (5) miles; and
    4. Class D vehicles shall be six (6) miles.
6. The motor fuel tax and distillate special fuel tax levied by this state shall be paid upon all such fuel used to propel out-of-state trucks upon the highways of this state.
1. 1. Any person who violates the provisions of this subchapter or the rules issued under this subchapter shall be guilty of a misdemeanor and for a:
    1. First conviction shall be punished by a fine of not more than one hundred dollars ($100) or by imprisonment for not more than ten (10) days; and
    2. Second conviction within one (1) year thereafter the person shall be punished by a fine of not more than two hundred dollars ($200) or by imprisonment for not more than twenty (20) days, or by both a fine and imprisonment.
  2. Upon a third or subsequent conviction within one (1) year after the first conviction, the person shall be punished by a fine of not more than five hundred dollars ($500) or by imprisonment for not more than six (6) months, or by both a fine and imprisonment.
2. Each separate loading of a vehicle tank or compartment thereof in violation of this subchapter shall be deemed a separate offense.
1. The Director of the State Plant Board shall have the power to adopt and, from time to time, to change by addition, amendment, or repeal reasonable rules consistent with law, for the enforcement of the provisions of this subchapter.
2. The rules to the extent practicable shall be consistent with pertinent nationally recognized standards, methods, and tolerances.
3. The rules shall be applicable only to the extent that they are not in conflict with rules or orders issued by an agency of the United States and shall be drawn with due consideration for the desirability of uniformity of the laws of the several states and the United States.
4. 1. The rules promulgated under this subchapter and any addition to or amendment or repeal of the rules shall be adopted, changed, amended, or repealed only after full public hearing, which shall be adjourned from time to time as necessary to permit all interested or affected parties to be heard.
  2. At least thirty (30) days' prior written notice of the commencement of the hearing shall be published two (2) times in one (1) newspaper of general circulation that has been designated for that purpose by the director.
  3. The notice shall state the time, place, and purpose of the hearing and shall either set forth in full the rule to be considered or shall state where and how the full text may be obtained.
  4. A copy of the notice shall be sent at the same time to every person who has registered with the director a request to be so notified, together with the name and address to which the notice should be sent.
  5. Any rule or amendment or repeal of a rule shall be effective sixty (60) days after copies have been filed according to the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
1. The Director of the State Plant Board shall gauge and determine the capacity of vehicle tanks used in the sale or delivery of petroleum products in this state and inspect and test, to ascertain if they are correct, the capacity indicators of the compartments of those vehicle tanks.
2. The director is authorized to use the services of a recognized calibrating agency in determining the correctness of measurements whenever a difference of opinion exists between the owner or operator of a tank and the director as to the correctness of the gauging, and that determination shall be final.
1. Every person owning or operating any vehicle tank shall present it to the checking station when notified to do so by the Director of the State Plant Board upon ten (10) days' notice to the person by the director. However, the director shall not require any vehicle tank to be presented for testing at a checking station which is more than one hundred seventy-five (175) miles distant from the point which is the customary base of operations of that vehicle tank.
2. The director shall not call in any vehicle tank for recalibrating sooner than eighteen (18) months after the date of last calibration unless the director has evidence or reason to believe that a change in the capacity of the vehicle tank has occurred since the date on which it was last calibrated.
1. Every compartment of a vehicle tank shall be equipped with permanently attached indicators of the capacity of the compartment.
2. After each compartment has been gauged or calibrated, if it is approved, the Director of the State Plant Board shall place a seal on each indicator.
3. It shall be the duty of the owner or operator of the vehicle tank to report to the director immediately the breaking of the seal on the indicator which was placed there by the director.
1. Any vehicles, tanks, and equipment which display symbols or identification marks indicating that the equipment has been properly gauged under the laws of another state will be exempt from the requirements of this subchapter to the same extent that vehicles of this state are exempt in the state which gauged the vehicles, tanks, and equipment in the first instance.
2. However, this section shall not be applicable if the Director of the State Plant Board has evidence or reason to believe that a change in the capacity of the tank or tank truck has occurred since the date it was last gauged.
1. In addition to the tax levied upon motor fuel in § 26-55-205, there is levied an excise tax of four cents (4¢) per gallon upon all motor fuel subject to the tax levied in that section.
2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of other motor fuel taxes.
1. 1. All taxes, interest, penalties, and costs received by the Secretary of the Department of Finance and Administration from the additional taxes and fees levied by this subchapter shall be classified as special revenues and shall be deposited into the State Treasury.
  2. The net amount thereof shall be transferred by the Treasurer of State on the last business day of each month, as follows:
    1. Fifteen percent (15%) of the amount to the County Aid Fund;
    2. Fifteen percent (15%) of the amount to the Municipal Aid Fund; and
    3. Seventy percent (70%) of the amount to the State Highway and Transportation Department Fund.
2. 1. All such funds credited to the State Highway and Transportation Department Fund shall be used for construction, reconstruction, and maintenance of the rural state highways of the state and their extensions into municipalities and industrial access roads.
  2. The State Highway Commission shall provide to each member of the General Assembly on January 1, 1986, and annually thereafter, a report indicating how the money provided by this subchapter was spent, which roads were worked on, and what other progress was made regarding the plan outlined to the General Assembly by the commission during the debate on this subchapter.
1. In addition to the taxes levied on motor fuel in §§ 26-55-205, 26-55-1002, and 26-55-1201, there is levied an additional excise tax of three cents (3¢) per gallon on all motor fuels subject to the taxes levied in §§ 26-55-205, 26-55-1002, and 26-55-1201.
2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of the other motor fuel taxes under Arkansas law.
3. The additional tax levied by this section shall be taken into consideration and used when calculating tax credits or additional tax due under § 26-55-710.
4. The additional taxes collected pursuant to this section shall be considered special revenues and shall be distributed as set forth in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
1. The Secretary of the Department of Finance and Administration is authorized to enter into the International Fuel Tax Agreement of July 1987 with jurisdictions outside this state to provide for cooperation and assistance among member jurisdictions in the administration and collection of taxes imposed upon the consumption of all fuels used in vehicles operated or intended to operate interstate. Provided, however, that the agreement shall not be effective until stated and agreed to in writing and filed with the secretary.
2. The agreement authorized by this subchapter may provide for determining the base jurisdiction for fuel users, users' record requirements, audit procedures, exchange of information, eligibility for licensing, definition of qualified motor vehicles, definition of motor fuels, bond requirements, reporting requirements, reporting periods, methods for collecting and forwarding fuel taxes and penalties to another jurisdiction, and other provisions to facilitate the administration of the agreement.
3. No agreement authorized by this subchapter shall preclude the secretary from auditing the records of any person subject to the provisions of this chapter or the Special Motor Fuels Tax Law, § 26-56-101 et seq.
4. For the purposes of this subchapter, the amount necessary to recover reasonable administrative costs for issuance of a vehicle identification decal is hereby determined to be that amount required to be paid for the distinctive marking under § 26-55-708.
1. On and after March 6, 1991, in addition to the taxes levied upon motor fuel in §§ 26-55-205 and 26-55-1002 and upon distillate special fuels in §§ 26-56-201 and 26-56-502 and upon liquefied gas special fuels in §§ 26-56-301 and 26-56-502, and in addition to any other taxes levied on the fuel or fuels during the Seventy-Eighth Regular Session of the General Assembly, there is hereby levied an excise tax of five cents (5¢) per gallon upon all motor fuel and liquefied gas special fuels and an excise tax of two cents (2¢) per gallon upon all distillate special fuels subject to the taxes levied in §§ 26-55-205, 26-55-1002, 26-56-201, 26-56-502, 26-56-301, and 26-56-502.
2. Such additional taxes shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of other motor fuel taxes, distillate special fuels taxes, and liquefied gas special fuels taxes.
1. All of the additional taxes, fees, penalties, and interest collected under the provisions of this subchapter and §§ 26-55-710, 26-56-214, and 26-56-304 shall be classified as special revenues and shall be deposited into the State Treasury. After deducting therefrom the amount to be credited to the Constitutional Officers Fund and the State Central Services Fund as provided in the Revenue Stabilization Law, § 19-5-101 et seq., the Treasurer of State shall transfer on the last business day of each month:
  1. Fifteen percent (15%) of the amount thereof to the County Aid Fund;
  2. Fifteen percent (15%) of the amount thereof to the Municipal Aid Fund; and
  3. Seventy percent (70%) of the amount thereof to a special account in the State Highway and Transportation Department Fund to be designated the “1991 Highway Construction and Maintenance Account”.
2. The funds in the 1991 Highway Construction and Maintenance Account shall be held, managed, and used in the same manner and for the same purposes as set out in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq., excluding however, § 27-70-206.
3. Provided that, in keeping with the spirit of Pub. L. No. 97-424, § 105, and the State Highway Commission's goals for encouraging the participation of disadvantaged business enterprises in entering into and performing contracts with the commission, including the purchasing of supplies and equipment by the commission and for the construction, reconstruction, and maintenance of highways and bridges in the state highway system, the commission is authorized to expend up to ten percent (10%) of the total funds and revenues available and disbursed to the commission pursuant to this act for the purposes of achieving those goals.
1. No fire department shall secure a refund of tax under this subchapter unless the fire department is the holder of an unrevoked permit which was issued by the Secretary of the Department of Finance and Administration before the purchase of the motor fuel or the distillate special fuel.
2. The permit shall be numbered and shall entitle the fire department to make an annual application for refund under this subchapter.
3. An application for the permit shall be filed with the secretary on forms prescribed by the secretary and shall contain such information as the secretary may require.
4. No person shall knowingly make a false or fraudulent statement in an application for a refund permit or in an application for a refund of any taxes under this subchapter.
5. The refund permit of any person who violates any provision of this subchapter shall be revoked by the secretary and shall not be reissued until two (2) years have elapsed after the date of the revocation.
1. The refund permit holder shall file with the Secretary of the Department of Finance and Administration an application for refund on forms furnished by the secretary which shall include, but not be limited to, the following information:
  1. The quantity of motor fuel and distillate special fuel purchased for use in its fire trucks;
  2. A statement that the motor fuel and distillate special fuel have been used exclusively in its fire trucks;
  3. The amount of the tax claimed to be refunded;
  4. The name, post office, and resident address of the fire department;
  5. The name and address of the sellers from whom the motor fuel and distillate special fuel were purchased; and
  6. Other information as the secretary shall require.
2. 1. An application for a refund shall be accompanied by a paid receipt for the purchase price of motor fuel and distillate special fuel on which the refund is sought.
  2. The application shall be notarized and made to the secretary.
3. All claims for a refund under the provisions of this subchapter shall be subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq.
4. 1. The secretary shall promulgate a rule establishing the annual date for claiming a refund pursuant to this subchapter.
  2. A refund shall only be granted for a purchase of motor fuel and distillate special fuel made within one (1) calendar year of the annual date for claiming the refund.
1. All valid claims for refund of the motor fuel tax under the provisions of this subchapter shall be paid from the Gasoline Tax Refund Fund and shall be subject to the same conditions and limitations as provided under § 26-55-407, except that all the motor fuels covered by the provisions of this subchapter shall be subject to the full refund of the motor fuel taxes paid.
2. 1. 1. The Secretary of the Department of Finance and Administration shall annually estimate the amount necessary to pay refunds to the users of distillate special fuel who are entitled to refunds with respect to distillate special fuel taxes paid in this state as authorized in this subchapter.
    2. Upon certification by the secretary, the Treasurer of State shall transfer from the gross amount of distillate special fuel taxes collected each month the amount so certified and shall credit the amount to the fund.
  2. The transfers from the distillate special fuel taxes collected each month shall be made after deducting allowances for bad checks or claims but before making any other distribution as provided by law.
3. 1. All valid claims for refund of the distillate special fuel tax under the provisions of this subchapter shall be paid from the fund.
  2. The refund for purchases of distillate special fuel tax shall not include the moneys which have been pledged to the repayment of highway bonds under § 26-56-201.
4. All warrants drawn against the fund that are not presented for payment within one (1) year after issuance shall be void.
5. Neither the secretary nor any member or employee of the Department of Finance and Administration shall be held personally liable for making any refund by reason of a fraudulent claim filed as a basis for the refund.
1. The Secretary of the Department of Finance and Administration shall keep a permanent record by fire department of the amount of refund claimed and paid to each claimant.
2. The records shall be open to public inspection.
1. The Arkansas Department of Transportation shall pay the special motor fuel tax established by this chapter on the special motor fuels used in its motor vehicles as defined in § 26-56-102.
2. The Arkansas Department of Transportation shall remit this tax each month to the Secretary of the Department of Finance and Administration who will distribute the tax as outlined in this chapter.
3. For purposes of computing this tax, the Arkansas Department of Transportation shall use its fuel consumption reports and shall file with the secretary an appropriate monthly report stating the gallons used in the department's motor vehicles and the tax due and payable.
4. The Arkansas Department of Transportation shall not be required to maintain separate special fuel storage facilities for fuel used in its motor vehicles and in its off-the-road equipment.
1. 1. 1. 1. There is levied an excise tax at the rate of eight and one-half cents (8½¢) per gallon on all distillate special fuel sold or used in this state or purchased for sale or use in this state.
      2. In addition to the tax levied in subdivision (a)(1)(A)(i) of this section, there is levied an excise tax at the rate of one cent (1¢) per gallon on all distillate special fuel sold or used in this state or purchased for sale or use in this state.
    2. The additional levies provided in subdivision (a)(2) of this section and § 26-56-502 are specifically intended to apply to the taxes levied by this section and shall remain effective.
  2. In addition to the tax levied in subdivision (a)(1) of this section, there is levied an excise tax of one cent (1¢) for each gallon of distillate special fuel, as defined in § 26-56-102, sold or used in this state, or purchased for sale or use in this state, to be computed in the manner set forth in this section.
2. The following are exempted from the tax levied by subsection (a) of this section:
  1. Sales to the United States Government;
  2. Sales to dealers, users, or off-road consumers for off-road use only if the distillate special fuel was delivered by the supplier into storage facilities clearly marked “NOT FOR MOTOR VEHICLE USE”;
  3. Sales of distillate special fuel by a licensed supplier for export from the State of Arkansas when shipped by common carrier FOB destination to any other state or territory or to any foreign country, or the export of distillate special fuel by a licensed supplier from the State of Arkansas to any other state or territory or to any foreign country, if satisfactory proof of actual exportation of all the distillate special fuel is furnished at the time and in the manner prescribed by the Secretary of the Department of Finance and Administration;
  4. Sales of distillate special fuel by a pipeline importer who has first received the distillate special fuel in this state or to a licensed first receiver in this state; and
  5. Sales of distillate special fuel utilized in propelling jet aircraft.
3. A licensed first receiver shall not sell untaxed distillate special fuel to another licensed first receiver or pipeline importer, unless a specific exemption is available under subsection (b) of this section.
4. 1. In addition to the taxes levied on distillate special fuel in this section and § 26-56-502, there is levied an additional excise tax of four cents (4¢) per gallon upon all distillate special fuel subject to the taxes levied in this section and § 26-56-502.
  2. This additional excise tax shall be levied, collected, reported, and paid in the same manner and at the same time as is prescribed by law for the levying, collection, reporting, and payment of the other distillate special fuel taxes under Arkansas law.
5. 1. 1. In addition to the taxes levied on distillate special fuel in this section and §§ 26-56-502 and 26-56-601, there is levied an excise tax of two cents (2¢) per gallon upon all distillate special fuel subject to the taxes levied in this section and §§ 26-56-502 and 26-56-601.
    2. Effective one (1) year after April 1, 1999, the additional tax levied by this subsection shall be increased by an additional two cents (2¢) per gallon.
  2. This additional excise tax shall be levied, collected, reported, and paid in the same manner and at the same time as is prescribed by law for the levying, collection, reporting, and payment of the other distillate special fuel taxes under Arkansas law.
  3. The additional tax levied by this subsection shall be taken into consideration and used when calculating tax credits or additional tax due under § 26-56-214.
6. The additional taxes collected under this section are special revenues and shall be distributed as set forth in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq., subject to any requirements for the repayment of bonds issued under the Arkansas Highway Financing Act of 1999, § 27-64-201 et seq., the Arkansas Interstate Highway Financing Act of 2007, § 27-64-401 et seq., and the Arkansas Highway Financing Act of 2011, § 27-64-501 et seq.
7. The taxes collected under subdivision (a)(1)(A)(ii) of this section shall be distributed as provided in § 26-56-221.
1. The tax levied by this subchapter shall be collected and paid by suppliers.
2. The tax levied by this subchapter shall be paid by an interstate user on distillate special fuel imported into this state by the interstate user under § 26-56-214.
3. The tax levied by this subchapter shall be paid by any person who uses distillate special fuel in this state on which the tax levied in this subchapter has not been paid according to § 26-56-214.
1. 1. 1. No person shall commence operations as a supplier, user, or off-road consumer of distillate special fuel without first procuring a license for that purpose from the Secretary of the Department of Finance and Administration. The license shall be issued and remain in effect until revoked as provided in this section.
    2. 1. Any person holding or applying for a supplier's license after August 1, 1987, shall make an election to operate either as a pipeline importer or first receiver. Once having made an election in writing filed with the secretary, the election will remain in force until such time as the supplier makes another written election to change the supplier's status.
      2. The election and any change therein shall take effect on the first month following filing of the election.
      3. The secretary may promulgate such forms and rules as may be necessary to ensure uniformity with federal usage of exemption certificates issued for nonhighway diesel purchases.
2. 1. Each application for a license or registration as a supplier, user, or off-road consumer of distillate special fuel, and each license or registration, shall have as a condition that the applicant and holder shall comply with the provisions of this subchapter.
  2. 1. Each annual registration as a user or off-road consumer shall have as a further condition that the applicant shall not deliver or permit delivery into the fuel supply tanks of motor vehicles any distillate special fuel which have been purchased tax-free by the applicant.
    2. A taxable use of distillate special fuel purchased tax-free by an applicant for an annual registration as a user or off-road consumer, in addition to the penal provisions prescribed in this subchapter, at the discretion of the secretary shall forfeit the right of the applicant to purchase distillate special fuel tax-free.
3. 1. Every supplier shall file with the secretary a surety bond of not less than one and one-half (1½) times or one hundred fifty percent (150%) of the prior six (6) months' average distillate special fuel tax due which is based upon the gallonage of distillate special fuel to be sold or distributed as shown by the application for a license if the applicant has not previously been engaged in the business of a supplier, or as shown by sales for the previous year if the applicant previously has been engaged in the business in this state. However, no bond shall be filed for less than one thousand dollars ($1,000).
  2. If the secretary deems it necessary to protect the state in the collection of distillate special fuel taxes, the secretary may require any supplier to post a bond in an amount up to three (3) times or three hundred percent (300%) of the prior six (6) months' average distillate special fuel tax due.
  3. 1. However, the secretary is authorized to waive the posting of bond by any licensed supplier organized and operating under the laws of Arkansas and wholly owned by residents of this state who has been licensed for a period of at least three (3) years and who has not been delinquent in remitting distillate special fuel taxes during the three-year period immediately preceding application by the supplier for waiver of bond.
    2. If any supplier whose bond has been waived by the secretary as authorized in subdivision (c)(3)(A) of this section, subsequently becomes delinquent in remitting distillate special fuel taxes to the secretary, the secretary may require that the supplier post a bond in the amount required in this section, and the supplier shall not be eligible to petition for a waiver of bond for a period of three (3) years thereafter.
4. 1. Each application of an interstate user for a license shall be accompanied by a surety bond of a surety company authorized to do business in this state, in favor of the secretary, satisfactory to the secretary, and in an amount to be fixed by the secretary of not less than one thousand dollars ($1,000) nor more than fifty thousand dollars ($50,000), guaranteeing the payment of any and all taxes, penalties, interest, attorney's fees, and costs levied by, accrued, or accruing under this subchapter.
  2. Any violation of this subchapter shall be cause for revocation of any license issued under this subchapter.
5. 1. The bond or bonds shall be issued by a surety company qualified to do business in Arkansas, which shall be executed by the supplier or interstate user as the principal obligor and shall be made payable to the State of Arkansas as the obligee.
  2. The bond shall be conditioned upon the prompt filing of true reports and the payment by the supplier or interstate user to the secretary of any and all distillate special fuel taxes which are levied or imposed by the State of Arkansas, together with any and all penalties and interest thereon, and generally upon faithful compliance with the provisions of this subchapter.
6. 1. In the event that liability upon the bond filed pursuant to this section by the supplier or interstate user with the secretary shall be discharged or reduced, whether by judgment rendered, payment made, or otherwise, or if in the opinion of the secretary any surety on the bond shall have become unsatisfactory or unacceptable, then the secretary may require the filing of a new bond with a satisfactory surety in the same form and amount; failing which, the secretary shall immediately cancel the license of the supplier or interstate user.
  2. If a new bond shall be furnished, the secretary shall cancel the bonds for which the new bond shall be substituted.
7. In the event that upon a hearing of which the supplier or interstate user shall be given five (5) days' notice in writing, the secretary shall decide that the amount of the existing bond is insufficient to ensure payment to the State of Arkansas of the amount of the tax and any penalties and interest for which said supplier or interstate user is or may at any time become liable, then the supplier or interstate user upon written demand of the secretary shall immediately file an additional bond in the same manner and form and with a surety company thereon approved by the secretary in any amount determined by the secretary to be necessary to secure at all times the payment to the State of Arkansas of all taxes, penalties, and interest due under the provisions of this section, failing which, the secretary shall immediately cancel the license of the supplier or interstate user.
8. 1. Any surety on any bond furnished as provided in this section shall be released and discharged from any and all liability to the State of Arkansas accruing on the bond after the expiration of sixty (60) days from the date upon which a surety shall have lodged with the secretary written request to be released and discharged. However, the request shall not operate to relieve, release, or discharge the surety from any liability already accrued or which shall accrue before the expiration of the sixty-day period.
  2. Upon receipt of notice of the request, the secretary shall promptly notify the supplier or interstate user who furnished the bond, and unless the supplier or interstate user on or before the expiration of the sixty-day period files with the secretary a new bond with a surety company satisfactory to the secretary in the amount and form as provided in this section, the secretary shall immediately cancel the license of that supplier or interstate user.
  3. If a new bond shall be furnished as provided in this section, the secretary shall cancel the bond for which the new bond shall be substituted.
9. In lieu of furnishing a bond or bonds executed by a surety company as provided in this section, any supplier or interstate user may furnish a bond or other instrument in a form prescribed by the secretary of equal, full amount to the amount of the bond or bonds required by this section, which will provide security or payment of all amounts as described in this section and in compliance with all provisions of this subchapter.
10. 1. A supplier may operate under his or her supplier's license as a dealer or as a user without securing a separate license, but he or she shall be subject to all other conditions, requirements, and liabilities imposed by this subchapter upon a dealer or a user.
  2. A licensed supplier, but not a dealer, may use distillate special fuel in motor vehicles owned or operated by him or her without securing a separate license as a user, subject to all conditions, requirements, and liabilities imposed herein upon a user.
11. 1. Any violation of this subchapter shall be cause for revocation of any license issued pursuant to this subchapter.
  2. 1. Should his or her license be revoked, any supplier or user may bring an action against the secretary in the circuit court of the county of his or her domicile within fifteen (15) days of the date of revocation to determine whether or not the supplier or user has in fact violated any of the provisions of this chapter.
    2. If the circuit court determines that the provisions of the law have been violated by the supplier or user, it shall affirm the secretary's action in revoking the license.
1. 1. On or before the twenty-fifth day of each calendar month on forms prescribed by the Secretary of the Department of Finance and Administration, every supplier shall file with the secretary a report accounting for the distillate special fuel handled during the preceding month.
  2. The supplier shall file supporting documents necessary to assure accurate reporting.
  3. The report shall include the following:
    1. An itemized statement of the number of gallons of distillate special fuel received during the next-preceding calendar month by the supplier;
    2. An itemized statement of the number of gallons of distillate special fuel received or sold during the next-preceding calendar month and entitled to deduction or exemption under the provisions of this subchapter;
    3. The total number of gallons of dyed distillate special fuel sold to users during the next-preceding calendar month, but the report shall not contain an itemized listing identifying each purchaser; and
    4. Such other documents as the secretary requires.
2. 1. When filing the report and paying the tax to the secretary as required in this section, the supplier shall be entitled to deduct from the total number of gallons upon which the tax levied under this chapter is due, the number of gallons:
    1. Purchased during the preceding calendar month from another licensed supplier and upon which the tax levied under this chapter was paid at the time of that purchase; and
    2. Lost due to fire, flood, storm, theft, or other cause beyond the supplier's control, other than through evaporation.
  2. The deduction for the loss may be included in the report filed for the month in which the loss occurred or in any subsequent report filed within a period of one (1) year.
3. 1. On forms prescribed by the secretary, every pipeline company, water transportation company, and common carrier transporting distillate special fuel to points within Arkansas shall report under oath to the secretary all deliveries of distillate special fuel so made to points within Arkansas.
  2. 1. The report shall cover a monthly period and shall be submitted within twenty-five (25) days after the close of the month covered by the report.
    2. The report shall show:
      1. The name and address of each person to whom deliveries of distillate special fuel have actually been made;
      2. The name and address of each originally named consignee if distillate special fuel has been delivered to anyone other than the originally named consignee;
      3. The point of origin, point of delivery, and date of delivery, as well as the name of the boat, barge, or vessel;
      4. The number of gallons contained in the vessel, if shipped by water;
      5. The license number of each tank truck;
      6. The number of gallons contained in the tank if transported by motor truck;
      7. The point of origin, the name and address of the person or terminal to whom the delivery was made, the date of the delivery, and the quantity of distillate special fuel delivered if shipped by pipeline company; and
      8. The manner and quantities if delivered by other means when the delivery is made.
    3. The report shall also show such additional information relative to a shipment of distillate special fuel as the secretary may require.
4. 1. Every terminal purchasing or otherwise acquiring distillate special fuel by pipeline and selling, using, or otherwise disposing of the distillate special fuel for delivery in Arkansas and not required by a provision of this subchapter to be licensed as a supplier in distillate special fuel shall file a statement setting forth the:
    1. Name under which the terminal is transacting business within the State of Arkansas and the location with the street number address of the terminal's principal office or place of business within the state; and
    2. Name and address of the owner of the terminal, names and addresses of the partners if the terminal is a partnership, or names and addresses of the principal officers if the terminal is a corporation or association.
  2. On or before the twenty-fifth day of each calendar month on forms prescribed by the secretary, the terminal shall report to the secretary all purchases or other acquisitions and sales or other disposition of distillate special fuel during the next-preceding calendar month, which report shall include the following:
    1. Beginning inventories in gallons of distillate special fuel in storage;
    2. Ending inventories in gallons of distillate special fuel in storage;
    3. Withdrawals of distillate special fuel in gallons from the pipeline outlet resulting in additions of distillate special fuel to storage, including the name of the supplier licensed as an importer who requested the placement of the distillate special fuel into storage; and
    4. Removals of distillate special fuel from storage, specifically including:
      1. Bill of lading numbers which represent physical movements of the distillate special fuel;
      2. The date of each removal;
      3. The quantity in gallons of distillate special fuel so removed;
      4. The person who had the distillate special fuel available for that particular removal; and
      5. The person possessing a license from the secretary who requested the removal of the distillate special fuel from that storage.
  3. When any terminal purchasing or otherwise acquiring distillate special fuel by pipeline and selling or otherwise disposing of the distillate special fuel for delivery in Arkansas and not required by a provision of this subchapter to register as a supplier in distillate special fuel, fails to submit the terminal's monthly report to the secretary by the twenty-fifth day of each calendar month or when the terminal fails to submit in the monthly report the data required by this subchapter, the terminal shall be guilty of a violation and shall be fined an amount not greater than one hundred dollars ($100) for the first offense and shall be fined an amount not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) for each subsequent offense.
1. Every person required by law to secure a license under any motor fuel or distillate special fuel tax law shall keep records in the time and manner and subject to inspection and audit as required by the Arkansas Tax Procedure Act, § 26-18-101 et seq., for each place of business or place of storage in Arkansas, including a complete record of all distillate special fuel purchased or received and sold, delivered, or used by him or her showing for each purchase, receipt, sale, delivery, or use:
  1. The date;
  2. The name and address of the seller or of the persons from whom received, and if sold or delivered in bulk quantities, the name and address of the purchaser or recipient;
  3. An accurate record of the number of gallons of each product used for taxable purposes with quantities measured by a meter; and
  4. Inventories of distillate special fuel on hand at the end of each month at bulk storage facilities.
2. 1. For each bulk sale and delivery of distillate special fuel, whether or not subject to tax under this subchapter, the record required shall include an invoice with serial numbers printed thereon showing the name and address of both the supplier and the purchaser, and the complete information set out in subsection (a) of this section for each sale, one (1) counterpart of which shall be delivered to the purchaser and another counterpart kept by the supplier or dealer for the period of time and purpose provided in subsection (a) of this section.
  2. 1. For each delivery of distillate special fuel into the fuel supply tank of a motor vehicle, the required record shall include a serially numbered invoice issued in not less than duplicate counterparts on which shall be printed or stamped with a rubber stamp the name and address of the supplier, dealer, or user making the delivery and on which shall be shown, in spaces to be provided on that invoice, the date of delivery, the number of gallons and kind of distillate special fuel so delivered, the total mileage recorded on the speedometer or hub meter of the motor vehicle into which delivered, and the motor vehicle registration number of the motor vehicle.
    2. The invoice shall reflect that the tax has been paid or accounted for on each of the products delivered.
    3. 1. One (1) counterpart of the invoice shall be kept by the supplier, dealer, or user making the delivery as a part of his or her record and for the period of time and purposes provided in subsection (a) of this section.
      2. Another counterpart shall be delivered to the operator of the motor vehicle and carried in the cab compartment of the motor vehicle for inspection by the Secretary of the Department of Finance and Administration or his or her representatives until the fuel it covers has been consumed.
3. 1. Every person who operates a motor vehicle that is equipped to use motor fuels taxable under the Motor Fuel Tax Law, § 26-55-201 et seq., and distillate special fuel interchangeably in the propulsion of the motor vehicle shall carry in the cab compartment of the motor vehicle for inspection by the secretary or his or her representative, not only the counterpart of the serially-numbered invoice required under subsection (b) of this section for the delivery of distillate special fuel into the fuel supply tanks of the motor vehicle but also an invoice or receipt from the seller for each delivery into the fuel supply tanks of the motor vehicle of motor fuels taxable under the Motor Fuel Tax Law, § 26-55-201 et seq., which latter invoice or receipt shall show the same information as to date of delivery, quantity, speedometer or hub meter mileage, and motor vehicle registration number as is required for the invoice covering distillate special fuel.
  2. These invoices shall be carried with the motor vehicle until the kinds of fuels covered thereby have been consumed.
4. 1. On all deliveries of distillate special fuel to a user by common or contract carriers, the shipper shall stamp on the manifest or bill of lading in letters not less than one-quarter inch (¼") high “TAX PAID” whenever the tax levied under this subchapter, other than the tax levied by § 26-56-224(b)-(f), has been paid, and “NOT FOR MOTOR VEHICLE USE” whenever the tax levied under this subchapter has not been paid or if the fuel is dyed distillate special fuel.
  2. It shall be a violation of this chapter for any driver for a carrier to deliver distillate special fuel covered by a manifest or bill of lading stamped “NOT FOR MOTOR VEHICLE USE” into a tank marked “TAX-PAID SPECIAL FUELS”.
5. The willful issuance of any invoice, bill of sale, or receipt which is false, untrue, or incorrect in any material particular, or the alteration or changing except for errors, or forging any invoice, bill of sale, or receipt, or any duplicate of any receipt pertaining to distillate special fuel shall constitute a violation of this chapter.
1. Whenever an interstate user of distillate special fuel who is a bonded user of distillate special fuel in all states in which he or she operates has exportations in excess of importations of tax-paid distillate special fuel in the fuel supply tanks of motor vehicles which distillate special fuel was delivered by a supplier into bulk storage facilities of the user within the State of Arkansas, the supplier may make a refund or allow a credit for the amount of the tax upon the excess upon approval by the Secretary of the Department of Finance and Administration of a statement from the user to the effect that the tax-paid distillate special fuel was exported.
2. 1. For the purpose of determining whether an interstate distillate special fuel user owes special motor fuel tax or is entitled to a credit or refund, the licensed interstate distillate special fuel user shall file a quarterly report on or before the last day of the month following the end of each calendar quarter.
  2. If it shall be determined by the quarterly report that the interstate user has used distillate special fuel in this state in excess of the number of gallons of the distillate special fuel upon which the Arkansas tax had been paid, the interstate user shall remit to the secretary, at the time of filing the report, an excise tax of eighteen and one-half cents (18½¢) per gallon of the excess gallonage used.
  3. If it shall be determined that the interstate user has purchased more gallons of distillate special fuel in this state than he or she has used in this state, then the interstate user shall be entitled to a credit or refund of eighteen and one-half cents (18½¢) per gallon of the excess gallonage purchased in the state.
3. The quarterly report required by this subchapter shall be filed on or before the last day of the month following the end of each calendar quarter and shall be made on forms prescribed by the secretary and shall include such information as the secretary may require.
4. 1. For the purpose of determining whether a distillate special fuel user owes tax or is entitled to a credit or refund as provided in subsection (b) of this section, the distillate special fuel user shall file with the secretary a report showing the quantities of special motor fuels used in this state during the preceding calendar quarter. This report shall be due on or before the last day of the month following the end of each calendar quarter.
  2. If it shall be determined by the quarterly report filed with the secretary that the distillate special fuel user has used more gallons of special motor fuel in this state than the special motor fuel tax due thereon has been paid, the distillate special fuel user shall remit to the secretary an excise tax of eighteen and one-half cents (18½¢) per gallon of special motor fuel.
  3. Distillate special fuel users may not take credit on reports at a tax rate in excess of that actually paid.
5. 1. For the purpose of determining whether a distillate special fuel user owes tax or is entitled to a credit or refund, the distillate special fuel user shall determine the average miles per gallon of fuel used. The average miles per gallon shall be determined by dividing total miles traveled in all jurisdictions by the total gallons of fuel used in all jurisdictions. The distillate special fuel user shall then determine the total amount of fuel used within the State of Arkansas by dividing the total number of miles traveled within the State of Arkansas by the average miles per gallon.
  2. The number of gallons of distillate special fuels upon which the tax has been paid by an interstate user shall be determined from the form obtained by the interstate user from a dealer or licensed bulk supplier on forms containing information prescribed by § 26-56-209.
  3. The taxpayer's tax liability shall be calculated by multiplying the number of gallons of fuel used within the State of Arkansas by eighteen and one-half cents (18½¢) per gallon. A taxpayer shall be entitled to credits against his or her tax liability for tax-paid fuel purchased within the State of Arkansas.
6. 1. Any licensed interstate user who fails to maintain adequate mileage or fuel records, for the purpose of determining the amount the interstate user owes the State of Arkansas for tax on distillate special fuel used in this state as provided in this section, the number of gallons of distillate special fuel used in this state shall be determined by an assessment based on the following mileage factors per gallon of distillate special fuel as compared to the appropriate class of vehicle set out in subdivision (f)(2) of this section.
  2. For the purposes of this section:
    1. All automobiles, except buses, with a capacity of less than eight (8) passengers shall be deemed to be Class A vehicles;
    2. All truck-type vehicles, except buses, with a factory rating and gross loaded weight of less than twenty-two thousand five hundred pounds (22,500 lbs.) shall be deemed to be Class B vehicles;
    3. All other vehicles, except buses, with a factory rating in excess of twenty-two thousand five hundred pounds (22,500 lbs.), or whose total gross loaded weight exceeds twenty-two thousand five hundred pounds (22,500 lbs.), shall be deemed to be Class C vehicles; and
    4. All buses rated and licensed as such shall be deemed to be Class D vehicles.
  3. The mileage factor per gallon of distillate special fuel for:
    1. Class A vehicles shall be twelve (12) miles;
    2. Class B vehicles shall be eight (8) miles;
    3. Class C vehicles shall be five (5) miles; and
    4. Class D vehicles shall be six (6) miles.
  4. These mileage factors shall be utilized in conjunction with the Arkansas mileage as determined through an audit and based upon the best records available regardless of source.
7. For the purposes of determining the amount any unlicensed or unbonded user owes the State of Arkansas for tax on distillate special fuel used in this state, only the above mileage factors per gallon of distillate special fuel for the applicable vehicles shall be utilized.
8. 1. If a quarterly report of a distillate special fuel user results in a net credit, the distillate special fuel user may elect to have the credit carried forward and applied against the special motor fuel tax due for the succeeding eight (8) quarters or until the credit is completely used, whichever occurs first. In the alternative, a taxpayer who is entitled to a net credit on his or her quarterly fuel use tax report may elect to have the amount of credit refunded to him or her.
  2. A distillate special fuel user who has a total tax liability for special motor fuel tax during the previous calendar year of less than one hundred dollars ($100) upon application to the secretary may obtain permission to report his or her motor fuel tax liability on an annual basis. The annual report shall be due on or before the last day of the month following the end of each fiscal year.
9. 1. The secretary shall prescribe the appropriate forms necessary for the administration of this subchapter.
  2. The secretary may make appropriate rules necessary to ensure the accurate reporting of the special motor fuel tax.
1. 1. The Secretary of the Department of Finance and Administration shall quarterly estimate the amount necessary to pay refunds to interstate users of special motor fuels who are entitled to refunds with respect to special motor fuel taxes paid in this state as authorized in § 26-56-214, and upon certification by the secretary, the Treasurer of State shall transfer from the gross amount of special motor fuel taxes collected each month the amount so certified and shall credit the amount to the Interstate Motor Fuel Tax Refund Fund, which is established on the books of the State Treasury, from which the Department of Finance and Administration shall make refunds as provided by law.
  2. The transfers from the gross motor fuel taxes and special motor fuel taxes collected each month shall be after deducting allowances for bad checks or claims but before making any other distribution as provided by law.
2. All warrants drawn against the fund which are not presented for payment within one (1) year of issuance shall be void.
3. Neither the secretary nor any member or employee of the department shall be held personally liable for making any refund by reason of a fraudulent claim being filed as a basis for the refund.
4. The secretary is authorized to promulgate rules and to prescribe the necessary forms required for the administration of claims for tax refunds from interstate users of special motor fuels in this state as authorized by law, which rules shall be in conformance with the following requirements:
  1. The secretary shall first determine, with respect to each refund claim filed, that the bond of the interstate user is adequate to compensate the State of Arkansas for any losses with respect to the recovery of any refunds illegally claimed by the interstate user, and the secretary may require the increase of the bond if the secretary determines it to be inadequate before approving any claim for refund;
  2. Each interstate user of motor fuels and special motor fuels claiming refunds shall maintain adequate records to substantiate each claim for refund, and the secretary may reject any claim for refund if the secretary determines the applicant has not maintained adequate records or has not conformed to the rules of the department in filing the claim therefor;
  3. Each claim for refund shall be upon the request of the interstate user, which shall be verified by the interstate user as to its accuracy and validity; and
  4. 1. Each quarterly report filed by a licensed interstate user of special motor fuels with the department shall reflect thereon the amount of special motor fuels purchased for use in Arkansas during the quarter, the number of gallons of special motor fuels upon which taxes are due the State of Arkansas for the quarter, and the excess gallonage upon which the interstate user is entitled to refunds.
    2. At the end of each calendar quarter, the licensed interstate user may make application for refund with respect to the number of gallons of special motor fuels upon which the special motor fuels taxes have been paid during the calendar quarter for which the interstate user is entitled to refund.
1. In order to enforce the provisions of this subchapter, the Secretary of the Department of Finance and Administration or his or her authorized representative is empowered to stop any motor vehicle which appears to be operating with distillate special fuel for the purpose of examining the invoices and for other investigative purposes reasonably necessary to determine whether the taxes imposed by this subchapter have been paid, or whether the motor vehicle is being operated in compliance with the provisions of this subchapter.
2. If after examination or investigation it is determined by the secretary or his or her authorized representative that the tax imposed by this subchapter has not been paid with respect to the fuels being used in the motor vehicle, the secretary or his or her representative shall immediately assess the tax due, together with the penalty hereinafter provided, to the owner of the motor vehicle, and give the owner written notice of the assessment by handing it to the driver of the motor vehicle.
3. The secretary or his or her representative is empowered to impound any motor vehicle found to be operating in violation of this chapter by a person other than one who has furnished the bond required of users by § 26-56-204(c) until such time as any tax assessed as provided herein has been paid.
1. 1. All users except suppliers of distillate special fuel who maintain their own storage tanks in the state are required to have a separate storage tank for taxable distillate special fuel other than dyed distillate special fuel, which tanks are to be physically separate and apart from any other tanks or fueling units, and to indicate it by placing thereon in a conspicuous place the words “TAX-PAID FUELS” in letters not less than five inches (5") high.
  2. Suppliers are required to collect the tax on all distillate special fuel delivered into those tanks.
2. 1. All users who have facilities for storing distillate special fuel intended for other than highway use and which facilities are suitable to fuel motor vehicles using distillate special fuel, except those facilities used for residential purposes, shall mark the storage facilities with the words “NOT FOR MOTOR VEHICLE USE” in letters not less than five inches (5") high, and suppliers may deliver into the storage facilities without collecting the tax levied in this subchapter other than the tax levied by § 26-56-224(b)-(f).
  2. 1. If users do not provide the tanks, then all distillate special fuel delivered by a supplier into storage tanks suitable for fueling motor vehicles become taxable, provided, however, that any city or county using a computerized fuel dispensing system that will automatically record each transaction as to pump operator and specific motor vehicle to which the distillate special fuel is dispensed may have taxable and nontaxable distillate special fuel delivered into the same tank.
    2. The distributor shall collect the tax on the taxable portion of each purchase based upon the sworn statement of the purchaser as to the amount of taxable distillate special fuel purchased.
    3. Each city or county shall file a report with the Secretary of the Department of Finance and Administration accounting for the taxable and nontaxable distillate special fuel used and miles driven by each motor vehicle which requires taxable distillate special fuel in such a manner, at such time, and on such forms as shall be prescribed by the secretary.
    4. The secretary may promulgate rules to establish a system to periodically reconcile the taxable distillate special fuel purchased and actual taxable distillate special fuel used by the city or county.
  3. However, when a user has one (1) or more storage tanks used for the storage of distillate special fuel within the meaning of this chapter, and the user does not own, possess, lease, or otherwise operate a motor vehicle licensed or required to be licensed for use upon the public highway and capable of using said distillate special fuel, the requirement for marking the storage facilities “NOT FOR MOTOR FUEL USE” shall be waived.
3. Nothing in this section shall be construed to amend or change the meaning of any other section of this chapter.
1. It shall be unlawful to make tax-free bulk sales of distillate special fuel to any user, dealer, or off-road consumer who has not filed with his or her supplier an annual registration for purchases of tax-free distillate special fuel.
2. However, a sale shall be lawful if:
  1. At the time of sale and delivery, the supplier obtains from the purchaser a fully executed annual registration for purchases of tax-free distillate special fuel; and
  2. The supplier maintains the registration form for a period of six (6) years.
3. When a user, dealer, or off-road consumer registration has been revoked and written notice of the revocation has been received by the supplier from the Secretary of the Department of Finance and Administration, it shall be unlawful for the supplier to make bulk sales or deliveries to the user, dealer, or off-road consumer of distillate special fuel on which the tax has not been paid.
1. It is unlawful to transport distillate special fuel within the State of Arkansas in any cargo tank from which distillate special fuel is sold or delivered which has a connection by pipe, tube, valve, or otherwise with the carburetor or with the fuel supply tank feeding the carburetor of the motor vehicle transporting the products.
2. 1. In addition to any other penalties which may be incurred there is levied a specific penalty of twenty-five dollars ($25.00) for each violation of the provisions of this section.
  2. This penalty shall be assessed by the Secretary of the Department of Finance and Administration or his or her representative and shall be collected in the same manner as is provided for the collection of tax in § 26-56-216.
1. It is unlawful and a violation of this chapter to operate with distillate special fuel any motor vehicle licensed for highway operation on which a speedometer, odometer, or hub meter is not kept at all times in good operating condition to correctly measure and register the miles traveled by the motor vehicle.
2. It shall be unlawful for any user of distillate special fuel to operate a truck in the State of Arkansas without the true owner's name and address or adequate identification on the outside of both right and left cab doors in letters not less than two inches (2") high, as near the center on the outside of the doors as possible. The name and address of the owner must be legible at a distance of twenty-five feet (25').
3. It shall be unlawful for any person to operate with distillate special fuel any vehicle of Arkansas domestic registry unless he or she has in his or her possession an invoice for the distillate special fuel and the invoice meets the requirements of § 26-56-209.
4. 1. In addition to any other penalties which may be incurred there is levied a specific penalty of twenty-five dollars ($25.00) for each violation of the provisions of this section.
  2. This penalty shall be assessed by the Secretary of the Department of Finance and Administration or his or her representative and shall be collected in the same manner as is provided for the collection of tax in § 26-56-216.
1. Taxes from the additional one-cent tax levied on distillate special fuel in § 26-56-201(a)(1)(A), shall be remitted to the Treasurer of State separate from other distillate special fuel taxes.
2. The gross amount of the taxes described in subsection (a) of this section shall be distributed under the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq, without making any deduction for credit to the Constitutional Officers Fund and the State Central Services Fund.
1. All of the additional taxes, fees, penalties, and interest collected under §§ 26-56-201, 26-56-214, and 27-14-601 shall be classified as special revenues and shall be deposited into the State Treasury.
2. After deducting the amount to be credited to the Constitutional Officers Fund and the State Central Services Fund as provided under the Revenue Stabilization Law, § 19-5-101 et seq., the Treasurer of State shall transfer on the last business day of each month:
  1. Fifteen percent (15%) of the amount thereof to the County Aid Fund;
  2. Fifteen percent (15%) of the amount thereof to the Municipal Aid Fund; and
  3. Seventy percent (70%) of the amount thereof to the State Highway and Transportation Department Fund.
3. The funds shall be further disbursed in the same manner and used for the same purposes as set out in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
1. All distillate special fuel sold, used, or utilized in this state for off-road purposes, and not for the purpose of fueling motor vehicles, shall be dyed by the person or entity authorized to dye the fuels in accordance and in conformance with Pub. L. No. 103-66 and the Internal Revenue Service Regulation made and promulgated pursuant to Pub. L. No. 103-66 which were in effect on April 6, 1995.
2. 1. There is levied an excise tax at the rate of six cents (6¢) per gallon on all dyed distillate special fuel sold, used, or utilized in this state.
  2. 1. If the dyed distillate special fuel contains biodiesel fuel, the excise tax in this subsection is levied only on the portion of the fuel that is not biodiesel fuel.
    2. As used in this subdivision (b)(2), “biodiesel fuel” means a diesel fuel substitute produced from nonpetroleum renewable resources.
3. The excise tax levied in subsection (b) of this section shall be deposited as follows:
  1. Seventy-six and six-tenths percent (76.6%) shall be deposited as general revenues;
  2. Eight and five-tenths percent (8.5%) shall be deposited into the Property Tax Relief Trust Fund; and
  3. Fourteen and nine-tenths percent (14.9%) shall be deposited into the Educational Adequacy Fund.
4. 1. The excise taxes levied by subsection (b) of this section shall be collected and remitted by suppliers of dyed distillate special fuel that are required to be licensed pursuant to § 26-56-204.
  2. The excise tax levied by subsection (b) of this section shall be paid by any person that uses dyed distillate special fuel on which the excise tax levied by subsection (b) of this section has not been paid.
5. The excise taxes levied by subsection (b) of this section shall not apply to dyed distillate special fuel sold for consumption by:
  1. Vessels, barges, and other commercial watercraft;
  2. Railroads;
  3. Municipal buses as described in § 26-52-417; or
  4. To fuel sold to the United States Government.
6. The excise taxes levied by subsection (b) of this section shall be reported and paid on or before the twentieth day of each month by electronic funds transfer as authorized pursuant to § 26-19-101 et seq. on forms to be prescribed by the Secretary of the Department of Finance and Administration.
7. All distillate special fuel that has not been dyed in accordance with subsection (a) of this section and that is sold, used, or utilized in this state for any purpose or purposes shall be taxable at the total per-gallon tax rates as set out in this chapter.
8. Off-road consumers purchasing dyed distillate special fuel shall not be required to obtain the annual off-road consumer permits required by § 26-56-204(a), and bulk sales of the dyed distillate special fuel may be made to the off-road consumers notwithstanding the provisions of § 26-56-218.
1. 1. The Secretary of the Department of Finance and Administration upon finding a motor vehicle using or utilizing dyed distillate special fuel for the purpose of operating that motor vehicle not excepted in § 26-56-225, shall:
    1. Assess all taxes due the state at the total per-gallon tax rates set out in this chapter upon all fuel that could be contained in the fuel supply tank or tanks of that motor vehicle, if filled to capacity; and
    2. Assess a penalty of ten dollars ($10.00) per gallon on all the fuel that could be contained in the fuel supply tank or tanks of the motor vehicle, if filled to capacity.
  2. Further, if any dyed distillate special fuel is found in any fuel storage tank or fuel storage facility outside of the terminal utilized by the operator of that motor vehicle, or any other person, for the purpose of fueling that motor vehicle, the secretary shall:
    1. For taxation purposes, make an assessment based on the entire amount of the fuel that could be contained in the fuel storage tank or fuel storage facility, if filled to capacity, at the total per-gallon tax rates set out in this chapter; and
    2. Assess a penalty of ten dollars ($10.00) per gallon on all the fuels that could be contained in the fuel storage tank or fuel storage facility, if filled to capacity, if the fuels are utilized by the operator of that motor vehicle, or are utilized by any other person, for the purpose of fueling that motor vehicle.
2. 1. 1. The presence of any amount of dyed distillate special fuel in the fuel supply tank of any motor vehicle not excepted in § 26-56-225, or in a fuel storage tank or fuel storage facility outside of the terminal utilized by the operator of the motor vehicle, or any other person, for the purpose of fueling that motor vehicle shall create a rebuttable presumption that the entire amount of fuel that could be contained in the fuel supply tank of the motor vehicle, or that could be contained in the fuel storage tank or fuel storage facility, has been, or is being, used or utilized for taxable purposes.
    2. Thus the entire amount of the fuel that could be contained in the tank and facility, if filled to capacity, shall be susceptible to full distillate special fuel taxation.
  2. The assessments shall be made against the operator or any other person the secretary deems responsible for the usage or utilization of the dyed distillate special fuel in that motor vehicle.
3. All penalties authorized by this section shall be in addition to all other penalties provided in this chapter and in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. Dyed distillate special fuel shall not be mixed with undyed distillate special fuel in the fuel supply tank of any motor vehicle, other than in the fuel supply tank of a motor vehicle excepted in § 26-56-225, or in any fuel storage tank or fuel storage facility, other than fuel storage tanks or fuel storage facilities utilized exclusively for the purpose of fueling motor vehicles excepted in § 26-56-225.
2. 1. The Secretary of the Department of Finance and Administration upon finding any fuel supply tank of a motor vehicle, fuel storage tank, or fuel storage facility outside of the terminal containing mixed dyed and undyed distillate special fuel, which fuel is being used or utilized in a motor vehicle or is being stored for ultimate usage or utilization in a motor vehicle not excepted in § 26-56-225 shall:
    1. Assess for taxation purposes the entire number of gallons of the fuel that could be contained in those fuel supply tanks, fuel storage tanks, or fuel storage facilities, if the tanks or facilities were filled to capacity, as taxable gallons at the total per-gallon tax rates set out in this chapter; and
    2. Assess a penalty of ten dollars ($10.00) per gallon on all the fuel.
  2. 1. The presence of any amount of dyed distillate special fuel in the fuel supply tank of any motor vehicle not excepted in § 26-56-225 or in a fuel storage tank or fuel storage facility outside of the terminal utilized by the operator of the motor vehicle, or any other person, for the purpose of fueling that motor vehicle, shall create a rebuttable presumption that the entire amount of fuel that could be contained in the fuel supply tank of the motor vehicle, or of a fuel storage tank or fuel storage facility, if mixed, has been, or is being, used or utilized for taxable purposes.
    2. Thus the entire amount of the fuel that could be contained in the tanks and facilities, if filled to capacity, shall be susceptible to full distillate special fuel taxation.
  3. The assessments shall be made against the operator of any motor vehicle, or owner or operator of the fuel storage tank or fuel storage facility outside of the terminal, or any other person the secretary deems responsible for the usage or utilization of the distillate special fuel in any motor vehicle involved in the assessment.
3. All penalties authorized by this section shall be in addition to all other penalties provided in this chapter and in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. 1. The Secretary of the Department of Finance and Administration shall have the authority to:
    1. Stop motor vehicles;
    2. Take samples of the fuel used or utilized for the operation of those motor vehicles;
    3. Measure the amounts of fuel that could be contained in the supply tanks of the motor vehicles; and
    4. Test the fuel, regardless of the location of the motor vehicles.
  2. The secretary shall have the authority to:
    1. Take samples of distillate special fuel stored in fuel storage tanks or fuel storage facilities outside of the terminal, which fuel may be used or utilized in motor vehicles;
    2. Measure the amount of fuel that could be contained in the tanks or facilities, if filled to capacity; and
    3. Test the fuel, regardless of the location of the tanks or facilities.
2. 1. 1. Any person who shall refuse to allow the secretary to sample, test, and measure the fuel that could be contained in any fuel supply tank of a motor vehicle, or in any fuel storage tank, or in any fuel storage facility outside of the terminal shall be assessed taxes at the total per-gallon tax rates set out in this chapter upon all fuels as determined by the secretary that could be contained in the fuel supply tank, fuel storage tank, or fuel storage facility, if filled to capacity.
    2. Additionally, a penalty of ten dollars ($10.00) per gallon on all the fuel shall be assessed.
  2. 1. It shall be prima facie evidence that the entire amount of the fuel in the fuel supply tank, fuel storage tank, or fuel storage facility outside of the terminal is taxable and that, by the refusal to allow the sampling, measuring, or testing, distillate special fuel taxes have not been paid on the fuel.
    2. The secretary shall add a penalty of twenty percent (20%) of the total amount of the assessed taxes excluding the ten-dollar-per-gallon penalty to the total amount assessed for willful refusal to allow the sampling, measuring, or testing, which penalty shall be in addition to all other penalties provided in this section, this chapter, and in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
  3. The assessments shall be made against the operator of any motor vehicle, fuel storage tank, or fuel storage facility outside of the terminal involved in the assessment or against any other person the secretary deems responsible for the use or utilization of the fuel in any motor vehicle involved in the assessment.
1. 1. In the event that assessments are made by the Secretary of the Department of Finance and Administration against the same operator or the same person for violating the provisions of § 26-56-226, § 26-56-227, or § 26-56-228 within three (3) years of any assessment made by the secretary for previous violations of any of those provisions, the secretary shall assess a penalty of twenty dollars ($20.00) per gallon on all the fuel assessed, and for third and subsequent violations within a three-year period by the same operator or the same person, the secretary shall assess a penalty of thirty dollars ($30.00) per gallon on all the fuel assessed.
  2. All assessments made pursuant to this section shall be in lieu of the ten-dollar-per-gallon penalty otherwise provided in §§ 26-56-226 — 26-56-228, but shall be in addition to all other penalties provided therein.
2. All assessments and procedures related to assessments authorized by §§ 26-56-223 — 26-56-231 shall be conducted in accordance with and pursuant to the Arkansas Tax Procedure Act, § 26-18-101 et seq.
1. The Secretary of the Department of Finance and Administration, in consultation with the Director of State Highways and Transportation, shall have the authority to make and promulgate rules to fully implement and enforce the provisions of §§ 26-56-223 — 26-56-230.
2. Provisions shall be included in the rules to allow any user enumerated in § 26-56-225, upon proper notice and certification to the secretary that dyed distillate special fuel is unavailable to that user at that time, to utilize untaxed, undyed distillate special fuel in motor vehicles belonging to the users.
1. The Secretary of the Department of Finance and Administration shall make all necessary preparations in order that all reports submitted by:
  1. Distributors of motor fuel, as required by the Motor Fuel Tax Law, § 26-55-201 et seq.;
  2. Suppliers of distillate special fuel and liquefied gas special fuels, as required by this chapter;
  3. Alternative fuel suppliers, as required by the Alternative Fuels Tax Law, § 26-62-101 et seq.; and
  4. All other persons required to submit any type of reports to the secretary pursuant to those tax laws,
2. The secretary shall also make and promulgate rules to ensure that the distributors, suppliers, and alternative fuel suppliers remit all taxes due the state pursuant to those tax laws by electronic funds transfer.
1. There is levied and imposed an excise tax of seven and one-half cents (7½¢) per gallon upon the use, as defined in § 26-56-102(21), of all liquefied gas special fuels within this state. Such use of liquefied gas special fuels shall constitute and is declared to be the taxable incident of this levy.
2. However, in lieu of the gallonage tax levied in this section with respect to liquefied gas special fuels used under this subchapter, except as otherwise provided herein the Secretary of the Department of Finance and Administration shall require the payment of the fees prescribed in § 26-56-304 in the case of all vehicles required to obtain liquefied gas special fuels user's permits under this subchapter, except licensed liquefied gas special fuels suppliers.
1. No person shall engage in the business of a liquefied gas special fuels supplier or dealer in this state until that person has filed an application for and obtained a liquefied gas special fuels supplier's or dealer's license.
2. 1. Application for licenses shall be filed on a form prescribed by the Secretary of the Department of Finance and Administration and verified by affidavit, and shall show the name, address, and kind of business of the applicant, a designation of the applicant's principal place of business, and such other pertinent information as the secretary may require.
  2. The application must also contain as a condition to the issuance of the license an agreement under oath by the applicant to comply with the requirements of this subchapter and the rules of the secretary.
3. 1. Before an application may be approved by the secretary, the applicant shall file a bond with surety satisfactory to the secretary, payable to the State of Arkansas, and conditioned upon the applicant's compliance with the provisions of this subchapter and the rules of the secretary.
  2. The bond is to be in the sum of not less than five hundred dollars ($500) and not more than twenty thousand dollars ($20,000), the amount to be in each case fixed by the secretary. However, the amount of the bond may be increased or decreased within the aforementioned limits by the secretary at any time.
  3. No bond shall be cancelled by the sureties thereon until the expiration of sixty (60) days after receipt of notice of the cancellation by the secretary, and the cancellation shall have no retroactive effect.
4. Upon approval of the application and bond, the secretary shall issue to the applicant a nontransferable liquefied gas special fuels supplier's license or dealer's license, as the case may be, bearing a distinctive number.
5. The license shall remain in full force until surrendered, suspended, revoked, or cancelled in the manner provided in this subchapter.
6. 1. Each liquefied gas special fuels supplier or dealer shall make application for and secure a duplicate of his or her license for each station or facility operated by the supplier or dealer at which liquefied gas special fuels are sold or used.
  2. The application shall be made on a form prescribed by the secretary showing the name, address, and the supplier or dealer license number of the applicant, the location of the station or facility for which the duplicate is applied, and such other pertinent information as the secretary may require.
  3. Upon approval of the application, the secretary shall issue to the applicant a nontransferable duplicate of the liquefied gas special fuels supplier's or dealer's license.
7. There shall be displayed in a conspicuous place at each station or facility where liquefied gas special fuels are sold or used the original or duplicate liquefied gas special fuels supplier's or dealer's license under which the station or facility is operated.
1. Each liquefied gas special fuels user, including licensed liquefied gas special fuels suppliers and dealers who use liquefied gas special fuels in vehicles owned by the supplier or dealer, shall make application for and secure a liquefied gas special fuels user's permit for each vehicle owned and operated which uses liquefied gas special fuels.
2. The application must be made on a form prescribed by the Secretary of the Department of Finance and Administration, showing the name, address, and user license number or supplier or dealer license number of the applicant, the make, model, and motor number of the vehicle involved, the type of fuel used therein, and such other pertinent information as the secretary may require.
3. The fuel user's permit shall be obtained annually before the secretary shall register and issue a motor vehicle license for the vehicle.
4. 1. At the time of applying for the permit and prior to the registration and issuance of a motor vehicle license for the vehicle, each applicant except licensed liquefied gas special fuels suppliers shall remit to the secretary, in addition to the regular fee prescribed by law for the registration and licensing of the vehicle, an additional fee in an amount which is determined by the General Assembly, based upon information available from statistical studies of the motor vehicular use of liquefied gas special fuels by various classes of users, as follows:
  2. If the secretary determines that the flat fee provided herein in lieu of the gallonage tax on liquefied gas special fuels is, in the case of common or contract carriers or other vehicles for hire, inadequate to compensate for the gallonage tax, the secretary may require the common or contract carriers or owners of other vehicles for hire to pay a fee based upon the actual mileage of the common or contract carrier or vehicle for hire for the previous year, the current year, or any other reasonable basis.
  3. The secretary shall establish rules for computing the fees and for the enforcement of the collection thereof.
  4. If any new liquefied gas special fuels vehicle is placed in operation or any other vehicle shall be converted to a liquefied gas special fuels vehicle during the registration year, the owner shall be permitted to pay a proportionate part of the liquefied gas special fuels user's permit fee for the vehicle for the remainder of the current registration year based upon one-twelfth (1/12) of the annual fee for the vehicle for each calendar month or fraction thereof remaining in the current registration year.
1. The Secretary of the Department of Finance and Administration shall promulgate special serially numbered window decals to be issued for motor vehicles for which liquefied gas special fuels user's permits are issued, except motor vehicles of licensed liquefied gas special fuels suppliers, which distinctive window decals shall evidence not only the registration of the motor vehicle but shall evidence the fact that the special permit fee charged under § 26-56-304 has been paid.
2. Each motor vehicle bearing the special and distinctive window decals shall entitle the owner or user of the motor vehicle to purchase liquefied gas special fuels from licensed liquefied gas special fuels suppliers only without the necessity of paying the gallonage tax levied thereon under § 26-56-301, it being the intent of that section that the payment of the special fee levied by § 26-56-304 shall be in lieu of and in full satisfaction of the liquefied gas special fuels gallonage taxes that would have otherwise been due on liquefied gas special fuels used in the motor vehicle during the period for which the license and permit is issued.
3. When a motor vehicle bearing a special and distinctive liquefied gas special fuels window decal is transferred, the liquefied gas special fuels window decal shall remain with the motor vehicle, and, when the registration of the motor vehicle is transferred to the new owner, the new owner shall be entitled to purchase liquefied gas special fuels for the motor vehicle without payment of the gallonage tax thereon the same as the former owner.
1. Each licensed liquefied gas special fuels supplier or interstate user shall compute, report, and pay the tax on all liquefied gas special fuels used in each vehicle owned or operated by him or her in this state on which the tax levied by this subchapter has not been paid by ascertaining the total highway miles driven in this state and dividing this total by the applicable mileage factor, as set forth below, to compute the quantity of special fuel used upon which the tax levied in § 26-56-301 is applicable.
2. 1. For the purpose of this section, all automobiles with a capacity of fewer than eight (8) passengers shall be deemed to be Class A vehicles.
  2. All truck-type vehicles with a factory rating and gross loaded weight of less than twenty-two thousand five hundred pounds (22,500 lbs.) shall be deemed to be Class B vehicles.
  3. All vehicles with a factory rating in excess of twenty-two thousand five hundred pounds (22,500 lbs.) or whose total gross loaded weight exceeds twenty-two thousand five hundred pounds (22,500 lbs.) shall be deemed to be Class C vehicles.
3. The mileage factor per gallon of liquefied gas special fuels for:
  1. Class A vehicles shall be twelve (12) miles;
  2. Class B vehicles shall be eight (8) miles; and
  3. Class C vehicles shall be four (4) miles.
4. When calculating the number of gallons of liquefied gas special fuels on which the gallonage tax levied by § 26-56-301 is due, the suppliers and users shall be allowed a credit equal to the amount of the tax paid on each gallon of liquefied gas special fuels purchased or received in this state when each credit is supported by a copy of the purchase invoice showing the amount of tax paid, signed by the supplier or dealer from which the liquefied gas special fuels was purchased or delivered.
5. The due date of the interstate user reports shall be the twenty-fifth day following each calendar quarter.
1. On or before the twenty-fifth day of each calendar month next following the calendar month for which the report is made, each liquefied gas special fuels supplier shall report to the Secretary of the Department of Finance and Administration:
  1. The total gallons of liquefied gas special fuels sold or delivered to each liquefied gas special fuels dealer, the name and address and dealer license number of each dealer, and the tax collected thereon;
  2. The number of gallons of liquefied gas special fuels sold or delivered to liquefied gas special fuels users other than dealers, the name and address of each user, the quantity sold or delivered to each user, and the tax collected thereon;
  3. If the liquefied gas special fuels are delivered into the supply tanks of any vehicle for which the flat fee provided for in § 26-56-304 has been paid, the vehicle license number of the vehicle;
  4. The number of gallons of liquefied gas special fuels used by the supplier for his or her own purposes, and the quantity thereof subject to the tax levied;
  5. The quantity of liquefied gas special fuels otherwise disposed of by the supplier and the portion thereof subject to the tax levied in § 26-56-304; and
  6. Such other information as the secretary may require by rule.
2. The report shall be made even though no tax is due.
3. Each liquefied gas special fuels supplier at the time of filing the monthly report required by this section shall remit to the secretary any and all taxes due on liquefied gas special fuels covered by the report.
1. Whenever any person to whom a liquefied gas special fuels supplier's license, dealer's license, or liquefied gas special fuels user's permit has been issued, discontinues to supply, sell, or use liquefied gas special fuels within the state, the person shall notify the Secretary of the Department of Finance and Administration in writing of that fact within thirty (30) days thereafter and surrender his or her license or permit to the secretary.
2. No person surrendering any such license or permit shall be entitled to any refund of any of the fees previously paid.
1. If a licensed liquefied gas special fuels supplier or dealer fails to file any report required by this subchapter, or falsely or fraudulently files a report, or fails to pay the full amount of the tax levied by this subchapter, or if at any time the surety on the licensee's bond becomes unsatisfactory or inaccessible to the Secretary of the Department of Finance and Administration or the bond is discharged or cancelled, and a new bond is not furnished by the licensee within five (5) days after the demand of the secretary, the secretary may give notice to the licensee of an intention to revoke his or her license.
2. The licensee shall be entitled to a period of ten (10) days after the mailing of the notice within which to apply for a hearing on the question of having his or her license revoked, and the secretary shall designate a time and place for the hearing, giving the licensee five (5) days' notice thereof.
3. After the hearing at which the licensee shall be entitled to present evidence and be represented by counsel, the secretary shall determine whether the licensee's license shall be revoked.
4. 1. Upon the issuance of an order revoking the license, the licensee shall be entitled to appeal to the circuit court in any county in which the licensee may do business, where the question shall be tried de novo, but the secretary's order shall be affirmed if supported by substantial evidence.
  2. An appeal may be had from the judgment of the circuit court as in other cases as provided by law.
5. 1. If the licensee fails to apply for a hearing within the prescribed time, the secretary may immediately revoke the license of the licensee and notify the licensee by registered mail, addressed to the last known address of the licensee appearing in the files of the secretary.
  2. The secretary shall also notify the surety company on the licensee's bond in like manner.
1. Any person operating a motor vehicle on the highways of this state who for the first time imports liquefied gas special fuels into the state in the supply tank of a motor vehicle but who has not obtained a liquefied gas special fuels user's permit from this state or who is not a bonded liquefied gas special fuels supplier in this state shall nevertheless be deemed a liquefied gas special fuels user.
2. For the purposes of determining the number of gallons of liquefied gas special fuels consumed in operating on the highways of this state, the liquefied gas special fuels user shall be required to pay to the Secretary of the Department of Finance and Administration the tax levied by this subchapter on each gallon of liquefied gas special fuels contained in the supply tank of the motor vehicle at the time of entry into the state and upon all liquefied gas special fuels used in this state upon which the tax levied in this subchapter has not been paid.
1. Any person purchasing liquefied gas special fuels for delivery into the supply tanks of the motor vehicle of the person, if the person does not have a liquefied gas special fuels user's permit as evidenced by the appropriate license issued therefor as provided in this subchapter or if the person is not a bonded licensed liquefied gas special fuels supplier, shall pay to the supplier or dealer at the time of purchase of liquefied gas special fuels the gallonage tax levied in § 26-56-301 on each gallon of liquefied gas special fuels so delivered into the supply tanks of the motor vehicle.
2. 1. At the time of making the delivery, the supplier or dealer shall prepare in duplicate a receipt reflecting the:
    1. Name and address of the purchaser;
    2. Make, model, and license number of the motor vehicle in which the liquified gas special fuels are delivered;
    3. Total amount of gallons delivered; and
    4. Tax collected thereon.
  2. The supplier or dealer shall deliver the original copy to the purchaser and shall retain the duplicate copy for a period of two (2) years for inspection by the Secretary of the Department of Finance and Administration or his or her designated agents.
1. 1. Any liquefied gas special fuels dealer, garage, mechanic, owner, or operator of a motor vehicle who converts or causes a vehicle to be converted to enable the vehicle to be operated on liquefied gas special fuels shall report the conversion to the Secretary of the Department of Finance and Administration on forms prescribed by the secretary within ten (10) days after the conversion.
  2. If any owner or operator fails to report a conversion to the secretary within the time prescribed above, the person shall be assessed a penalty of fifty dollars ($50.00) which shall be in addition to any criminal penalty provided in this chapter.
2. No person shall convert or equip any motor vehicle for the use of liquefied gas special fuels unless the person is licensed to do so by the Liquefied Petroleum Gas Board and has also made application for and obtained a license as a liquefied gas special fuels converter from the secretary and posted a bond in an amount determined by the secretary conditioned that the person will report to the secretary all vehicles so converted by the person as required by this section.
3. It shall be unlawful for any person to operate any vehicle which has been converted or equipped to use liquefied gas special fuels unless the vehicle has been reported to the secretary and a liquefied gas special fuels user's permit has been obtained therefor as required.
1. The Arkansas Department of Transportation shall continue to pay the special motor fuel tax established by this chapter on all diesel-powered motor vehicles as defined in § 26-56-102 owned by the Arkansas Department of Transportation.
2. For purposes of computing this tax, the Arkansas Department of Transportation shall use its fuel consumption reports and shall file with the Secretary of the Department of Finance and Administration an appropriate monthly report stating the gallons used in the Arkansas Department of Transportation's motor vehicles and the tax due and payable.
3. The Arkansas Department of Transportation shall remit the tax due each month to the secretary.
1. In addition to the tax levied upon distillate special fuel in § 26-56-201 and upon liquefied gas special fuels in § 26-56-301, there is levied an excise tax of four cents (4¢) per gallon upon all liquefied gas special fuels and two cents (2¢) per gallon upon all distillate special fuel subject to the tax levied in those sections.
2. The tax shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of other distillate special fuel taxes.
1. 1. All taxes, interest, penalties, and costs received by the Secretary of the Department of Finance and Administration from the additional taxes and fees levied by this subchapter shall be classified as special revenues and shall be deposited into the State Treasury.
  2. The net amount thereof shall be transferred by the Treasurer of State on the last business day of each month, as follows:
    1. Fifteen percent (15%) of the amount to the County Aid Fund;
    2. Fifteen percent (15%) of the amount to the Municipal Aid Fund; and
    3. Seventy percent (70%) of the amount to the State Highway and Transportation Department Fund.
2. 1. All such funds credited to the State Highway and Transportation Department Fund shall be used for construction, reconstruction, and maintenance of the rural state highways of the state and their extensions into municipalities and industrial access roads.
  2. The State Highway Commission shall provide to each member of the General Assembly on January 1, 1986, and annually thereafter, a report indicating how the money provided by this subchapter was spent, which roads were worked on, and what other progress was made regarding the plan outlined to the General Assembly by the commission during the debate on this subchapter.
1. On and after March 6, 1991, in addition to the taxes levied upon motor fuel in §§ 26-55-205 and 26-55-1002 and upon distillate special fuel in §§ 26-56-201 and 26-56-502 and upon liquefied gas special fuels in §§ 26-56-301 and 26-56-502, and in addition to any other taxes levied on the fuel or fuels during the Seventy-Eighth Regular Session of the General Assembly, there is hereby levied an excise tax of five cents (5¢) per gallon upon all motor fuel and liquefied gas special fuels and an excise tax of two cents (2¢) per gallon upon all distillate special fuel subject to the taxes levied in §§ 26-55-205, 26-55-1002, 26-56-201, 26-56-301, and 26-56-502.
2. Such additional taxes shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of other motor fuel taxes, distillate special fuel taxes, and liquefied gas special fuels taxes.
1. All of the additional taxes, fees, penalties, and interest collected under the provisions of this subchapter and §§ 26-55-710, 26-56-214, and 26-56-304 shall be classified as special revenues and shall be deposited into the State Treasury. After deducting therefrom the amount to be credited to the Constitutional Officers Fund and the State Central Services Fund as provided in the Revenue Stabilization Law, § 19-5-101 et seq., the Treasurer of State shall transfer on the last business day of each month:
  1. Fifteen percent (15%) of the amount thereof to the County Aid Fund;
  2. Fifteen percent (15%) of the amount thereof to the Municipal Aid Fund; and
  3. Seventy percent (70%) of the amount thereof to a special account in the State Highway and Transportation Department Fund to be designated the “1991 Highway Construction and Maintenance Account”.
2. The funds in the 1991 Highway Construction and Maintenance Account shall be held, managed, and used in the same manner and for the same purposes as set out in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq., excluding however, § 27-70-206.
3. Provided that, in keeping with the spirit of Pub. L. No. 97-424, § 105, and the State Highway Commission's goals for encouraging the participation of disadvantaged business enterprises in entering into and performing contracts with the commission, including the purchasing of supplies and equipment by the commission and for the construction, reconstruction, and maintenance of highways and bridges in the state highway system, the commission is authorized to expend up to ten percent (10%) of the total funds and revenues available and disbursed to the commission pursuant to this act for the purposes of achieving those goals.
1. No fire department shall secure a refund of tax under this subchapter unless the fire department is the holder of an unrevoked permit which was issued by the Secretary of the Department of Finance and Administration before the purchase of the motor fuel or the distillate special fuel.
2. The permit shall be numbered and shall entitle the fire department to make an annual application for refund under this subchapter.
3. An application for the permit shall be filed with the secretary on forms prescribed by the secretary and shall contain such information as the secretary may require.
4. No person shall knowingly make a false or fraudulent statement in an application for a refund permit or in an application for a refund of any taxes under this subchapter.
5. The refund permit of any person who violates any provision of this subchapter shall be revoked by the secretary and shall not be reissued until two (2) years have elapsed after the date of the revocation.
1. The refund permit holder shall file with the Secretary of the Department of Finance and Administration an application for refund on forms furnished by the secretary which shall include, but not be limited to, the following information:
  1. The quantity of motor fuel and distillate special fuel purchased for use in its fire trucks;
  2. A statement that the motor fuel and distillate special fuel have been used exclusively in its fire trucks;
  3. The amount of the tax claimed to be refunded;
  4. The name, post office, and resident address of the fire department;
  5. The name and address of the sellers from whom the motor fuel and distillate special fuel were purchased; and
  6. Other information as the secretary shall require.
2. 1. An application for a refund shall be accompanied by a paid receipt for the purchase price of motor fuel and distillate special fuel on which the refund is sought.
  2. The application shall be notarized and made to the secretary.
3. All claims for a refund under the provisions of this subchapter shall be subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq.
4. 1. The secretary shall promulgate a rule establishing the annual date for claiming a refund pursuant to this subchapter.
  2. A refund shall only be granted for a purchase of motor fuel and distillate special fuel made within one (1) calendar year of the annual date for claiming the refund.
1. All valid claims for refund of the motor fuel tax under the provisions of this subchapter shall be paid from the Gasoline Tax Refund Fund and shall be subject to the same conditions and limitations as provided under § 26-55-407, except that all the motor fuels covered by the provisions of this subchapter shall be subject to the full refund of the motor fuel taxes paid.
2. 1. 1. The Secretary of the Department of Finance and Administration shall annually estimate the amount necessary to pay refunds to the users of distillate special fuel who are entitled to refunds with respect to distillate special fuel taxes paid in this state as authorized in this subchapter.
    2. Upon certification by the secretary, the Treasurer of State shall transfer from the gross amount of distillate special fuel taxes collected each month the amount so certified and shall credit the amount to the fund.
  2. The transfers from the distillate special fuel taxes collected each month shall be made after deducting allowances for bad checks or claims but before making any other distribution as provided by law.
3. 1. All valid claims for refund of the distillate special fuel tax under the provisions of this subchapter shall be paid from the fund.
  2. The refund for purchases of distillate special fuel tax shall not include the moneys which have been pledged to the repayment of highway bonds under § 26-56-201.
4. All warrants drawn against the fund that are not presented for payment within one (1) year after issuance shall be void.
5. Neither the secretary nor any member or employee of the Department of Finance and Administration shall be held personally liable for making any refund by reason of a fraudulent claim filed as a basis for the refund.
1. The Secretary of the Department of Finance and Administration shall keep a permanent record by fire department of the amount of refund claimed and paid to each claimant.
2. The records shall be open to public inspection.
1. 1. In addition to all other taxes levied upon distillate special fuel, there is levied an additional tax on distillate special fuel of five cents (5¢) for each gallon of distillate special fuel sold or used in this state or purchased for sale or use in this state.
  2. The additional tax on distillate special fuel applies only to distillate special fuel intended for highway use or to fuel a motor vehicle intended for highway use.
2. The additional distillate special fuel tax under this section is subject to the exemptions under this chapter.
3. 1. The levy of the additional tax on distillate special fuel by subdivision (a)(1) of this section is conditioned upon the approval by a majority of the qualified electors of the state voting on the measure providing for the levy of the additional tax on distillate special fuel and the issuance of bonds in a statewide election held under the provisions of the Arkansas Highway Financing Act of 2011, § 27-64-501 et seq.
  2. If the levy of the additional tax on distillate special fuel and the issuance of the bonds is approved, the:
    1. Effective date of the additional tax on distillate special fuel levied by subdivision (a)(1) of this section shall be the first day of the second month following the month in which the Secretary of State certifies the vote of the voters of the state approving the levy of the additional tax on distillate special fuel and the issuance of bonds; and
    2. Additional tax on distillate special fuel levied by subdivision (a)(1) of this section shall terminate and shall no longer be collected upon certification by the Chair of the State Highway Commission that the bonds issued under the Arkansas Highway Finance Act of 2011, § 27-64-501 et seq., have been paid in full and all obligations of the commission with respect to the bonds have been performed in full.
  3. If the levy of the additional tax on distillate special fuel and the issuance of the bonds are not approved, the levy of the additional tax on distillate special fuel by subdivision (a)(1) of this section shall terminate and the additional tax shall not be collected.
1. It is recognized, found, and determined by the General Assembly that:
  1. The Arkansas Surgeon General has determined that the smoking of cigarettes is detrimental to the health of the smoker;
  2. The General Assembly had already recognized this hazard many years ago when it enacted § 5-27-227 regulating sales to minors, §§ 20-27-704 — 20-27-709 regulating pricing, establishing a policy for public smoking, and this subchapter, to provide for close supervision and control of the sale of tobacco products, vapor products, alternative nicotine products, and e-liquid products;
  3. The state has a very valid governmental interest in preserving and promoting the public health and welfare of its citizens; and
  4. It is the responsibility of the General Assembly to enact legislation to protect and further this essential governmental interest.
2. It is therefore the intent of this subchapter to:
  1. Provide for the close supervision and control of the permitting of persons to sell tobacco products, vapor products, alternative nicotine products, and e-liquid products in this state in order to assure that when these products are distributed in the state, they are fresh, not contaminated, and are properly taxed, stamped, stored, and distributed only to persons authorized to receive these products; and
  2. Impose permits, fees, taxes, and restrictions on the privilege of dealing in or otherwise doing business in tobacco products, vapor products, alternative nicotine products, and e-liquid products in order to promote the public health and welfare of the citizens of this state and to protect the revenue collection procedures incorporated within this subchapter.
1. The following are not subject to the taxes imposed under § 26-57-208:
  1. Tobacco products sold to military departments of the United States or the state for resale on military bases within the state;
  2. Tobacco products sold and delivered to authorized purchasers outside the state for resale; and
  3. Cigarettes sold and delivered to other wholesalers permitted under this subchapter.
2. A person permitted under this chapter that sells cigarettes to military departments of the United States or the state for resale on military bases under this section shall affix a tax-exempt stamp on the package, carton, or other container of cigarettes before transfer, shipment, or delivery.
1. 1. 1. The taxes levied by this subchapter shall be reported and paid by wholesalers permitted under § 26-57-214.
    2. However, retailers shall be liable for reporting and paying these taxes when a retailer purchases tobacco products directly from a manufacturer or from a wholesaler or distributor not permitted under § 26-57-214.
  2. 1. A taxpayer who fails to report and remit the tobacco tax due on tobacco products purchased from manufacturers, distributors, or wholesalers who are not permitted under § 26-57-214 shall be subject to the following penalties:
      1. Five percent (5%) of the total tobacco tax due for the first offense;
      2. Twenty percent (20%) of the total tobacco tax due for the second offense; and
      3. Twenty-five percent (25%) of the total tobacco tax due for the third and any subsequent offenses.
    2. In addition, the taxpayer's retail permit shall be revoked for a period of ninety (90) days for the third and any subsequent offenses.
  3. This subsection does not affect § 26-57-228.
  4. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against a person in possession of an untaxed tobacco product or unstamped cigarettes.
2. 1. On or before the fifteenth day of each month, every wholesaler shall file a report for the previous month's tax collections with the secretary.
  2. The report shall provide the information prescribed by the secretary.
3. 1. 1. 1. When the report under subsection (b) of this section is filed, the wholesaler shall remit to the secretary with the report ninety-eight percent (98%) of the tax due for the previous month.
      2. The discount of two percent (2%) under subdivision (c)(1)(A)(i) of this section does not apply to taxes due under § 26-57-804 or § 26-57-805.
    2. If the stamps deputy fails to remit the tax on or before the twentieth day of each applicable month, the wholesaler forfeits his or her claim to the discount described in subdivision (c)(1)(A) of this section, and the wholesaler shall remit to the secretary one hundred percent (100%) of the amount of tax due, plus any penalty or interest due.
  2. If the payment of any tax due becomes delinquent, the taxpayer shall remit the full amount of the tax due plus penalty.
4. 1. The secretary may add a penalty of ten percent (10%) of the tax due to the tax due for the failure to file a report or for the failure to remit the taxes at the time required, or for both.
  2. If the secretary determines there has been an attempt to evade the tax, a penalty of not more than fifty percent (50%) of the tax due shall be added to the tax due.
5. 1. 1. In computing the amount of tax due under this subchapter and any act supplemental to this subchapter, a wholesaler may deduct the cost of cigarette tax stamps and tobacco taxes lost through bad debts.
    2. Any deduction taken or refund paid attributable to bad debts shall not include interest.
    3. A bad debt incurred for a sale made before August 13, 1993, shall not be deducted.
    4. A bad debt must be deducted within three (3) years of the date of the sale for which the debt was incurred.
    5. If a deduction is taken for a bad debt and the taxpayer subsequently collects the debt in whole or in part, the tax on the amount so collected shall be paid and reported on the next return due after the collection.
  2. 1. As used in this section, “bad debt” means any cigarette or tobacco tax that the wholesaler legally claims as a bad debt deduction for federal income tax purposes.
    2. “Bad debt” includes without limitation a worthless check, a worthless credit card payment, and an uncollectible credit account.
    3. “Bad debt” does not include financing charges or interest, an uncollectible amount on property that remains in the possession of the taxpayer or vendor until the full purchase price is paid, expenses incurred in attempting to collect any debt, a debt sold or assigned to a third party for collection, and repossessed property.
1. Every permitted wholesaler and warehouse that handles, receives, stores, sells, and disposes of tobacco products, vapor products, alternative nicotine products, or e-liquid products in any manner in this state shall file a report with the Secretary of the Department of Finance and Administration on or before the fifteenth day of each month.
2. The report required under subsection (a) of this section shall include:
  1. A statement of the tobacco products, vapor products, alternative nicotine products, and e-liquid products on hand at the beginning of the preceding month;
  2. The receipts and disbursements of tobacco products, vapor products, alternative nicotine products, and e-liquid products handled during the preceding month; and
  3. Any other information about the purchases and sales as may be prescribed by the secretary.
3. All taxes due for the preceding month shall be remitted to the secretary at the time the report required under subsection (a) of this section is filed.
4. 1. Every wholesaler and warehouse shall permit personnel of the Department of Finance and Administration and auditors or agents of Arkansas Tobacco Control to enter into and to inspect their stock of tobacco products, vapor products, alternative nicotine products, and e-liquid products and all books, invoices, and any documents and records relating to receipts and disbursements of tobacco products, vapor products, alternative nicotine products, and e-liquid products.
  2. Auditors and agents shall not release to the Arkansas Tobacco Control Board or to the public any information identifying customers of the manufacturer, wholesaler, or warehouse except when necessary to notify the board of alleged violations of this subchapter.
5. 1. 1. All purchases of tobacco products, vapor products, alternative nicotine products, e-liquid products, and cigarette papers for distribution within the State of Arkansas by a nonresident wholesaler shall be evidenced by a separate invoice from the seller correctly showing the date of purchase and the quantity of each of the articles purchased by the wholesaler for distribution within Arkansas.
    2. Such stock purchased for distribution within Arkansas shall be kept in an entirely separate part of the building, separate and apart from stock purchased for sale or distribution in another state.
  2. At the time of shipping or delivering tobacco products, vapor products, alternative nicotine products, e-liquid products, or cigarette papers into the State of Arkansas, a nonresident wholesaler shall make a true duplicate invoice of the transaction that shows full and complete details of the sale or delivery of those articles and shall retain the duplicate invoice subject to use and inspection by the Department of Finance and Administration and Arkansas Tobacco Control for a period of three (3) years.
  3. Nonresident wholesalers shall also keep a record of all tobacco products, vapor products, alternative nicotine products, e-liquid products, and cigarette papers purchased by them for distribution within the State of Arkansas, and all books, records, and memoranda pertaining to the purchase and sale of the tobacco products, vapor products, alternative nicotine products, e-liquid products, and cigarette papers shall be subject to inspection by the Department of Finance and Administration and Arkansas Tobacco Control.
1. The tax shall be set out and identified on each invoice or statement as the “Arkansas Tobacco Products Excise Tax” as a separate billing or item.
2. Copies of all invoices for the purchase or sale of any tobacco products, vapor products, alternative nicotine products, or e-liquid products shall be retained by each manufacturer, wholesaler, vendor, and retailer for a period of at least three (3) years subject to examination by the Secretary of the Department of Finance and Administration and the Director of Arkansas Tobacco Control or their authorized agents upon demand at any time during regular business hours.
3. Retailers shall:
  1. Maintain copies of at least the last ninety (90) days of tobacco product, vapor product, alternative nicotine product, or e-liquid product invoices, which the retailer shall provide immediately upon demand;
  2. 1. Make the invoices that are older than ninety (90) days available upon demand at any time during normal business hours in the retail store.
    2. Except as provided in subdivision (c)(2)(C) of this section, an agent of Arkansas Tobacco Control may determine a reasonable time frame for which invoices are to be provided under subdivision (c)(2)(A) of this section.
    3. An invoice that is provided seventy-two (72) hours or more after the demand shall not be considered for purposes of determining a violation of this subsection;
  3. Retain invoices for all tobacco products, vapor products, alternative nicotine products, and e-liquid products in the retail store even if the invoice for the tobacco products, vapor products, alternative nicotine products, or e-liquid products is older than three (3) years;
  4. Maintain a copy of the signed server awareness forms for each employee of the retailer who engages in the sale of tobacco products, vapor products, alternative nicotine products, or e-liquid products, which the retailer shall provide immediately upon demand;
  5. 1. Maintain a copy of any complete transfer forms showing:
      1. The tobacco products, vapor products, alternative nicotine products, or e-liquid products that were transferred;
      2. The permitted location from which the tobacco products, vapor products, alternative nicotine products, or e-liquid products were transferred; and
      3. When the transfer occurred.
    2. A transfer form shall be completed contemporaneously with the transfer and shall be provided immediately by the retailer upon demand; and
  6. If any inventory was submitted with a permit application, maintain a copy of the submitted inventory form, which the retailer shall provide immediately upon demand.
4. Wholesalers and manufacturers shall maintain three (3) years of tobacco product, vapor product, alternative nicotine product, and e-liquid product invoices that are available upon demand during normal business hours in the permitted location.
5. An invoice from a wholesaler to a retailer shall contain the name or other identifying information of the wholesaler and the retailer.
1. A person shall not deal with, deliver or cause to be delivered to a retailer or consumer, or otherwise do business in tobacco products, vapor products, alternative nicotine products, or e-liquid products in this state without first registering with the Director of Arkansas Tobacco Control and obtaining a permit for that purpose.
2. All permits shall be issued by the director.
3. A manufacturer, wholesaler, vendor, or retailer who intends to sell tobacco products, vapor products, alternative nicotine products, or e-liquid products at or from one (1) or more places of business owned, rented, or leased by it shall obtain a separate permit for each place of business.
4. 1. A person permitted as a wholesaler shall not operate as a retailer unless a retailer's permit is first secured.
  2. A person permitted as a retailer shall not operate as a wholesaler unless a wholesaler's permit is first secured.
1. Each person listed in this section, before commencing business, or if already in business, before continuing, shall pay an annual privilege fee and secure a permit from the Director of Arkansas Tobacco Control.
2. 1. In addition to securing a permit under subsection (a) of this section, a manufacturer whose products are sold in this state shall register with the Secretary of the Department of Finance and Administration.
  2. A wholesaler of tobacco products, vapor products, alternative nicotine products, or e-liquid products shall secure the proper wholesale permit.
  3. 1. Every wholesaler's or manufacturer's salesperson of any tobacco products, vapor product, alternative nicotine product, or e-liquid product who contacts a retailer in this state for the purpose of soliciting, taking, or processing orders for the sale of tobacco products, vapor products, alternative nicotine products, or e-liquid products or who through contact delivers or causes delivery of any tobacco products, vapor product, alternative nicotine product, or e-liquid product to a retailer in this state, shall first secure a salesperson's permit.
    2. Application shall be made by the wholesaler or manufacturer who is the salesperson's employer.
    3. A salesperson's permit is not transferable to another employer and must be surrendered to the director by the employer upon termination of the salesperson's employment.
  4. Every retailer of tobacco products, vapor products, alternative nicotine products, or e-liquid products that operates a place of business shall secure the proper retail permit.
  5. A current permit holder may secure temporary permits to operate at picnics, fairs, carnivals, circuses, or any other temporary public gathering for periods not to exceed ten (10) days for a fee of five dollars ($5.00).
  6. 1. 1. Every vendor shall obtain a vending machine permit from the director. However, municipal corporations may license and tax the privilege of doing business as a vendor in cities where the vendors maintain an established place of business, provided that the machine license tax imposed may not exceed fifty percent (50%) of the amounts levied on the vendors' permits under this subchapter.
      2. If a municipality by ordinance licenses or taxes the privilege of doing business as a vendor, proof that the license is in good standing is a mandatory condition for the issuance of a state permit required under this section.
    2. 1. In addition, every vendor shall obtain a permit stamp for each machine of any type placed in operation in this state for the purpose of vending any tobacco products, vapor products, alternative nicotine products, or e-liquid products.
        
        This stamp shall be affixed to the machine in a conspicuous location together with a decal or card reciting the name, address, and permit number of the vendor operating the machine.
      2. A stamp shall not be issued for a machine upon which the state gross receipts or state compensating tax has not been paid, and the director shall require proof of payment before the initial issue of a stamp for any vending machine containing tobacco products, vapor products, alternative nicotine products, or e-liquid products.
3. 1. Permits are issued as follows:
    1. A permit for a sole proprietorship is issued in the owner's name and in the fictitious business name, if any;
    2. 1. A permit for a partnership or limited liability company is issued in the name of:
        
        The managing partner or managing member; and
        
        The partnership or limited liability company.
      2. If the managing partner or managing member of a limited liability company is a partnership, limited liability company, or corporation, then the permit shall be issued in the name of:
        
        The president or chief executive officer; and
        
        The partnership or limited liability company; and
    3. A permit for a publicly traded or nonpublicly traded corporation is issued in the name of the president or chief executive officer of the corporation and in the name of the corporation.
  2. It is a violation for a permitted entity not to provide written notification to the director within thirty (30) days of a change in the following:
    1. The managing partner, limited liability company managing member, or president or chief executive officer of a corporation, partnership, or limited liability company; or
    2. The stockholders effecting twenty-five percent (25%) or more of the total voting shares of a nonpublicly traded corporation.
4. 1. When an entity transfers a business permitted under this subchapter, the entity to which the business is transferred shall apply for and may be issued a new permit under this subchapter.
  2. When a partnership or limited liability company permitted under this subchapter changes, removes, or replaces the managing partner, managing member, president, or chief executive officer, the existing permit issued under this subchapter is void, and the partnership or limited liability company shall apply for and may be issued a new permit under this subchapter.
  3. When a nonpublicly traded corporation permitted under this subchapter changes, removes, or replaces the president or chief executive officer named on the permit or changes, removes, or replaces a stockholder who owns fifty percent (50%) or more of the total voting shares of the nonpublicly traded corporation's stock, the permit issued under this subchapter is void, and the nonpublicly traded corporation shall apply for and may be issued a new permit under this subchapter.
  4. When a publicly traded corporation permitted under this subchapter changes, removes, or replaces the president or chief executive officer named on the permit or changes, removes, or replaces a stockholder who owns fifty percent (50%) or more of the total voting shares of the publicly traded corporation's stock, the permit issued under this subchapter is void, and the publicly traded corporation shall apply for and may be issued a new permit under this subchapter.
5. An entity may apply for and be issued a permit under this subchapter in advance of the effective date of the permit to facilitate continuity of business operations.
1. The annual privilege fee for each permit authorized by § 26-57-215 is established as follows:
  1. Wholesale Permit (Tobacco Products, Vapor Products, Alternative Nicotine Products, or E-liquid Products) $1,000
  2. Vendor Permit $100
  3. Vending Machine Permit (per machine) $10.00
  4. Retail Permit (Tobacco Products, Vapor Products, Alternative Nicotine Products, or E-liquid Products) $100
  5. Retail Vapor Product and E-liquid Product Only Permit $50.00
  6. Wholesaler's Salesperson Permit $25.00
  7. Manufacturer's Salesperson Permit $25.00
  8. Manufacturer Cigarette Only Permit $500
  9. 1. Manufacturer Tobacco Products and Alternative Nicotine Products Only Permit $500
    2. Notwithstanding subdivision (a)(9)(A) of this section, manufacturers or importers who deal solely in cigars may submit a copy of their current federal tobacco import license or federal tobacco manufacturers' license to Arkansas Tobacco Control when applying for a Manufacturer Tobacco Products and Alternative Nicotine Products Only Permit to receive the permit at no cost.
  10. Manufacturer Vapor Product and E-liquid Product Only Permit $500
  11. Vapor Product and E-liquid Product Exclusive Permit (Manufacturer, Wholesaler, and Retailer) $1,000
2. 1. All permits issued under this subchapter expire on June 30 following the effective date of issuance.
  2. 1. Upon the failure to timely renew a permit issued under this subchapter, a late fee of two (2) times the amount of the permit fee in question shall be owed in addition to the annual privilege fee for the permit.
    2. An expired permit that is not renewed before September 1 following the expiration of the permit shall not be renewed, and the holder of the expired permit shall submit an application for a new permit.
  3. A permit shall not be issued to the applicant until the late fee and the permit fee have been paid.
3. A permit issued under this subchapter shall not be renewed for a permit holder who is delinquent more than ninety (90) days on a privilege fee, tax relating to the sale or dispensing of tobacco products, vapor products, alternative nicotine products, or e-liquid products, or any other state and local tax due the Secretary of the Department of Finance and Administration.
4. A person who is delinquent more than ninety (90) days on a state or local tax may not renew or obtain a permit issued under this subchapter except upon certification that the permit holder has entered into a repayment agreement with the Department of Finance and Administration and is current on the payments.
5. A permit holder who has unpaid fees, civil penalties, or an unserved permit suspension may not transfer, sell, or give tobacco product, vapor product, alternative nicotine product, or e-liquid product inventory of the business associated with the permit to a third party until all fees and civil penalties are paid in full and all suspensions are completed successfully, nor shall any third party be issued a new permit for the business location.
1. All permits issued under this subchapter may be suspended or revoked by the Director of Arkansas Tobacco Control for any violation of this subchapter or the rules pertaining to this subchapter, subject to a hearing before the Arkansas Tobacco Control Board at the next regularly scheduled board meeting.
2. The director may revoke all permits to deal in tobacco products, vapor products, alternative nicotine products, or e-liquid products associated with any person who is convicted of or pleads guilty or nolo contendere to criminally violating this subchapter, subject to a hearing before the board at the next regularly scheduled board meeting.
1. Every vendor before beginning operation or commencing business in this state shall give bond to the State of Arkansas.
2. The bond shall be conditioned upon the faithful performance of the duties and obligations imposed by this subchapter and the rules promulgated by the Secretary of the Department of Finance and Administration.
3. The bond required shall be established by the following table:
  1. Up to 30 machines $2,000
  2. 31 to 60 machines 3,000
  3. 61 to 90 machines 4,000
  4. 91 to 120 machines 5,000
  5. Over 120 machines 6,000
4. This bond shall be executed by a solvent surety company authorized to do business in this state or other responsible surety approved by the secretary.
1. A person within the jurisdiction of this state who is not permitted to sell, deliver, or cause to be delivered tobacco products, vapor products, alternative nicotine products, or e-liquid products to retailers or consumers and who sells, takes orders from, delivers, or causes to be delivered immediately or in the future any tobacco products, vapor products, alternative nicotine products, or e-liquid products to retailers or consumers, is guilty of a Class A misdemeanor.
2. A person engaged in buying, selling, or otherwise doing business in tobacco products, vapor products, alternative nicotine products, or e-liquid products in this state without first obtaining the proper permit upon conviction is guilty of a Class A misdemeanor.
1. 1. A person who engages in the business of owning, operating, or leasing any vending machines containing tobacco products, vapor products, alternative nicotine products, or e-liquid products without first obtaining the permit described in this subchapter is declared to be maintaining a public nuisance.
  2. A vending machine operated without a permit may be seized and sold by the Director of Arkansas Tobacco Control at public auction upon the order of the Pulaski County Circuit Court.
  3. Vending machines that are seized under this subsection may be redeemed before sale by the owner upon the payment of all taxes or fees due on the vending machine and all costs and expenses incurred in enforcing this section if the offender pays all taxes, fees, and costs within ten (10) days after seizure of the vending machines by the director.
2. A vendor may operate a permitted vending machine on the vendor's premises or on the premises of another if the proper permits are obtained under this subchapter and if the requirements of § 5-27-227 are met.
1. It is unlawful for a retailer of tobacco products, vapor products, alternative nicotine products, or e-liquid products to purchase tobacco products, vapor products, alternative nicotine products, or e-liquid products from a person other than a permitted manufacturer, permitted wholesaler, or other permitted retailer.
2. Any retailer violating this subchapter upon conviction is guilty of a Class A misdemeanor for each purchase defined in subsection (a) of this section.
1. 1. A person who is permitted as a wholesaler and as a retailer shall maintain separate wholesale and retail inventories and records.
  2. Separate inventories are not required under subdivision (a)(1) of this section if:
    1. Stamps denoting payment of the excise tax on the wholesale and retail inventory of cigarettes are properly affixed to the cigarettes; or
    2. Records clearly show that the excise tax has been paid on all other inventory of tobacco products.
2. 1. Every wholesaler who maintains a business as a retailer shall keep a record of his or her wholesale operations showing the number of stamps purchased, if any, and all purchases from whatever source, and all sales whether to himself or herself as retailer or to another.
  2. This record is subject to inspection by the Department of Finance and Administration and the Arkansas Tobacco Control Board.
3. Records shall be kept on forms prescribed by the Secretary of the Department of Finance and Administration.
4. If a wholesaler refuses to keep the records required by or to comply with this section, the Director of Arkansas Tobacco Control may revoke all permits that have been issued to the wholesaler.
1. Upon written request by the Secretary of the Department of Finance and Administration or the Director of Arkansas Tobacco Control, common carriers transporting tobacco products, vapor products, alternative nicotine products, or e-liquid products shall give a statement of all consignments of tobacco products, vapor products, alternative nicotine products, or e-liquid products showing date, point of origin, point of delivery, and to whom delivered for a period going back three (3) years.
2. All common carriers shall allow their records relating to shipment or receipt of tobacco products, vapor products, alternative nicotine products, or e-liquid products to be examined by the secretary, the director, or their agents.
3. A person who fails or refuses to give the statement, records, or invoices required by this section or who refuses to allow the secretary or the director to examine the person's records upon conviction is guilty of a Class C misdemeanor.
1. A wholesaler shall conduct the wholesaler's business subject to the following restrictions:
  1. The wholesaler shall secure a permit from Arkansas Tobacco Control;
  2. Except as otherwise provided in this subchapter, a wholesaler may sell tobacco products, vapor products, alternative nicotine products, or e-liquid products only to persons properly permitted under this subchapter;
  3. 1. Before selling, delivering, or otherwise disposing of cigarettes to retailers in this state, the wholesaler shall affix stamps of the proper denominations to show that the tax has been paid.
    2. The stamp shall be affixed in the manner prescribed by the Secretary of the Department of Finance and Administration; and
  4. 1. The wholesaler with each sale of cigarettes shall supply the retailer with an invoice showing the quantity, kind, and price of cigarettes sold, and shall supply the stamps required to show that the tax has been paid.
    2. The wholesaler shall retain a copy of this information in the wholesaler's files for three (3) years subject to the inspection by the Department of Finance and Administration and Arkansas Tobacco Control.
2. Any wholesaler who fails or refuses to affix or cancel the stamps or who fails or refuses to keep the records or who fails or refuses to furnish the statements and information or make the reports as required by this subchapter or as prescribed by the Secretary of the Department of Finance and Administration and the Director of Arkansas Tobacco Control, or who violates any of the requirements of §§ 26-57-212, 26-57-229, and 26-57-242 is guilty of a violation for the first offense and a Class C misdemeanor for each additional offense.
1. Retailers and vendors shall conduct their businesses subject to the following restrictions:
  1. Retailers and vendors shall not possess, place in their stock, have on their premises, sell, or otherwise dispose of any cigarettes to which stamps denoting the tax due on the cigarettes have not been affixed;
  2. Retailers and vendors shall require that properly cancelled stamps are affixed to all cigarettes purchased or otherwise received or accepted by them before they purchase or otherwise become the owner or possessor of the cigarettes;
  3. Retailers and vendors shall require from the wholesaler at the time of each purchase or receipt of cigarettes an invoice showing the quantity, kind, and price of the cigarettes and the stamps required to show that the tax has been paid and the date of sale or delivery;
  4. 1. The retailer shall keep records showing the description and date of the receipt of each lot of tobacco products, vapor products, alternative nicotine products, or e-liquid products, from whom purchased, when received on the premises, and any other requirements prescribed by the Secretary of the Department of Finance and Administration or the Director of Arkansas Tobacco Control.
    2. The records required under subdivision (a)(4)(A) of this section are subject to inspection by the Department of Finance and Administration and Arkansas Tobacco Control;
  5. The secretary or the director may require retailer reports covering receipts and sales of tobacco products, vapor products, alternative nicotine products, and e-liquid products monthly or for any other period; and
  6. The retailer shall permit the department and Arkansas Tobacco Control or any peace officer acting under their direction to inspect the retailer's inventory of merchandise, documents, records, and premises, including any room or building used in connection with the retailer's business.
2. Upon a retailer's failure to comply with any part of this section, the director may suspend or revoke the retailer's permit, subject to a hearing before the Arkansas Tobacco Control Board at the next regularly scheduled board meeting.
3. A retailer or vendor who fails or refuses to retain in his or her files invoices of tobacco products, vapor products, alternative nicotine products, or e-liquid products, and stamps, or who fails or refuses to furnish the statements and information or make the reports concerning receipts and sales of tobacco products, vapor products, alternative nicotine products, or e-liquid products, as required by this subchapter or prescribed by the secretary or the director, or who violates any of the requirements of this section, upon conviction is guilty of a Class A misdemeanor.
1. The purpose of the stamps is to provide a method for collecting the tax imposed on cigarettes sold in this state.
2. The Secretary of the Department of Finance and Administration shall prescribe the kind of stamps to be used in the administration of this subchapter.
3. 1. The secretary shall prepare and maintain an adequate supply of cigarette stamps.
  2. The secretary shall require a printer's certificate with each set of stamps delivered.
  3. The cost of printing the stamps shall be paid from the appropriation made for the administration of the Department of Finance and Administration.
  4. 1. All stamps prescribed by the secretary for affixation to cigarette packages shall be designed and furnished in such a fashion as to permit identification of the person that affixed the stamp to the particular package of cigarettes by means of a number or other mark on the stamp.
    2. The department shall maintain for not less than three (3) years information identifying the person that affixed the tax stamp to each package of cigarettes, which information shall not be confidential or exempt from disclosure to the public.
4. 1. Cigarettes sold in, into, or from the state shall be in packages of twenty (20) or twenty-five (25) cigarettes.
  2. The purchase or sale of individual cigarettes is prohibited.
1. The Secretary of the Department of Finance and Administration shall furnish tax stamps to licensed wholesalers through stamp deputies.
2. 1. The secretary may appoint and commission stamp deputies to handle the stamps and collect the tax on cigarettes before sales of cigarettes are made to the retailers.
  2. The secretary shall not appoint and commission a person as a stamp deputy unless the person:
    1. Is the owner or officer of a wholesaler licensed under this subchapter;
    2. Certifies each calendar quarter on a form prescribed by the secretary that the person has and will comply with the requirements of this subchapter;
    3. Consents to the jurisdiction of the state to enforce the requirements of this subchapter and waives any claim of sovereign immunity to the contrary;
    4. Provides complete and accurate reports as required by this subchapter;
    5. Waives the confidentiality laws necessary to permit the secretary to:
      1. Create and make available the list described in subdivision (b)(6) of this section; and
      2. Share information reported under this subchapter and other laws with the taxing authorities or law enforcement authorities of other states or with any other entity permitted by the secretary to aggregate the data;
    6. Has furnished a bond in an amount and in the form prescribed by the secretary; and
    7. If located outside of the state, has appointed an agent in this state to act as agent for the service of process for the purpose of enforcing this subchapter.
  3. An appointment and commission as a stamp deputy by the secretary is effective for one (1) year.
  4. A stamp deputy acting within the scope of the stamp deputy's authority is an agent of the secretary and is accountable as such for any wrongful acts.
  5. A stamp deputy's open account shall not exceed seventy-five percent (75%) of the total amount of the bond provided by the stamp deputy.
  6. 1. The secretary shall list on the website of the Department of Finance and Administration the names of all persons appointed and commissioned as stamp deputies under this section.
    2. Manufacturers, importers, and sales entity affiliates are entitled to rely on the list described in subdivision (b)(6)(A) of this section in selling cigarettes.
3. 1. A stamp deputy's appointment and commission are subject to revocation if the stamp deputy:
    1. Fails to submit a report required under this subchapter or the Tobacco Products Reporting Act, § 26-57-1401 et seq.;
    2. Files an incomplete or inaccurate report or an inaccurate certification;
    3. Fails to pay taxes due under this subchapter;
    4. Sells cigarettes in or into the state in a package that bears a stamp permitted under this subchapter that is not the correct stamp and provides for a lower level of tax than the correct stamp;
    5. Sells unstamped cigarettes in, into, or from the state or possesses unstamped cigarettes in the state except as permitted under this subchapter;
    6. Purchases, sells in or into the state, or affixes a tax stamp to a package containing cigarettes of a manufacturer or brand family that is not listed on the directory of cigarettes approved for stamping and sale published by the Attorney General under § 26-57-1303, or possesses cigarettes described in this subdivision (c)(1)(F) more than twenty-one (21) days after receiving notice that the manufacturer or brand family is not on the state directory, except as otherwise permitted under this subchapter;
    7. Purchases or sells cigarettes in violation of this subchapter; or
    8. Has his or her appointment and commission or similar license or permit revoked or terminated in any other state based on acts or omissions that would, if done in Arkansas, be grounds for the revocation of the stamp deputy's appointment and commission under this section unless the stamp deputy demonstrates that the revocation or termination in the other state was effected without due process.
  2. 1. If a stamp deputy commits a violation under subdivisions (c)(1)(A)-(D) of this section that was not knowing, the stamp deputy is entitled to cure the violation within thirty (30) days of the violation.
    2. The appointment and commission of a stamp deputy who fully cures the violation under subdivision (c)(2)(A) of this section shall not be revoked as a result of the violation.
    3. A violation that has been cured under this subdivision (c)(2) is not a violation for purposes of subdivision (c)(3) of this section and subsection (d) of this section.
  3. 1. If a stamp deputy commits a knowing violation under subdivision (c)(1) of this section, the stamp deputy is subject to the following civil penalties:
      1. For a first violation, up to one thousand dollars ($1,000); and
      2. For a second or subsequent violation, up to five thousand dollars ($5,000) per violation.
    2. For violations under subdivisions (c)(1)(E)-(H) of this section, each sale constitutes a separate violation.
  4. 1. The secretary shall:
      1. Promptly remove from the list of stamp deputies maintained under subdivision (b)(6) of this section a stamp deputy whose appointment and commission has been revoked; and
      2. Publish a notice of the termination on the department's website.
    2. Beginning ten (10) days following the publication of a notice under subdivision (c)(4)(A) of this section, a person shall not sell cigarettes to or purchase cigarettes from a stamp deputy whose appointment and commission have been revoked.
  5. If a stamp deputy whose appointment and commission have been revoked is also the manufacturer of cigarettes, the stamp deputy and its brand families shall be removed from the directory of cigarettes approved for stamping and sale maintained by the Attorney General under § 26-57-1303.
4. A stamp deputy whose appointment and commission have been revoked under subsection (c) of this section is eligible for reinstatement:
  1. Ninety (90) days following revocation for a first violation under subdivisions (c)(1)(A)-(D) of this section that was not knowing;
  2. One hundred eighty (180) days following revocation for a second failure under subdivisions (c)(1)(A)-(D) of this section that was not knowing;
  3. One (1) year following revocation for a third or subsequent violation under subdivisions (c)(1)(A)-(D) of this section that was not knowing;
  4. One (1) year following revocation for a first knowing violation under subdivision (c)(1) of this section; and
  5. Three (3) years following revocation for a second or subsequent knowing violation under subdivision (c)(1) of this section.
5. 1. 1. By the fifteenth day of each month, a stamp deputy shall file a report in the form prescribed by the secretary, and the stamp deputy shall certify to the state that the report is complete and accurate.
    2. The report required under subdivision (e)(1)(A) of this section shall contain the following information identified by name and number of cigarettes and the manufacturer and brand family of the cigarettes:
      1. The total number of cigarettes acquired by the stamp deputy during the month for sale in or into the state and for sale from Arkansas into another state;
      2. The total number of cigarettes sold in or into the state by the stamp deputy during the month;
      3. The total number of cigarettes held in inventory in the state or for sale into the state by the stamp deputy as of the end of the previous month;
      4. The total number of stamps the stamp deputy affixed during the month, including the following:
        
        How many of each type of stamp the stamp deputy affixed by number;
        
        The total dollar amount of tax paid; and
        
        The total number of cigarettes contained in the packages to which the stamp deputy affixed each type of tax stamp; and
      5. Any additional information required by the secretary to assist in the enforcement of this chapter, §§ 26-57-260, 27-57-261, and 26-57-1301 – 26-57-1308.
  2. In addition to the reports submitted under this section, the stamp deputy shall submit any information required by the secretary, including without limitation the manufacturer, brand family, and number of the cigarettes on which the reports are submitted.
  3. The secretary may share the information reported under this section with the taxing authorities or law enforcement authorities of Arkansas or another state or with any other entity permitted by the secretary to aggregate the data.
6. 1. The secretary shall pay a commission to each stamp deputy for the sale of cigarette tax stamps, the affixing of a cigarette tax stamp to each package of cigarettes, and the collection of cigarette taxes.
  2. The commission paid under subdivision (f)(1) of this section shall not be less than three percent (3%) of the total aggregate cigarette tax collected by the stamp deputy.
7. 1. All deposits held by a bank for a stamp deputy that represent the sales of stamps are trust funds and shall be held as special deposits.
  2. If the bank becomes insolvent, the deposits under subdivision (g)(1) of this section shall be classed and considered as preferred claims of the state.
1. The Secretary of the Department of Finance and Administration or the secretary's stamp deputy may sell or deliver cigarette stamps only to licensed wholesalers.
2. No person shall have in his or her possession any cigarette stamps except such as have been issued in the regular way in the manner provided for in this subchapter.
3. 1. Any cigarette or tobacco products wholesaler or any other person required by law to affix cigarette tax stamps to cigarettes sold or offered for sale in this state shall have the option to receive the stamps directly from the secretary or to request that the stamps be shipped to the person in a manner to be selected by the secretary.
  2. When the stamps are shipped to the wholesaler or other person, the shipping and insurance cost shall be borne by the wholesaler. The wholesaler or other person to whom the stamps are shipped shall be liable for payment of the stamps only upon actual receipt thereof.
  3. The receipt of tax stamps by a cigarette or tobacco products wholesaler or other person to whom the stamps are shipped shall be evidenced by a written receipt signed by the person to whom the stamps are shipped or a person designated by him or her.
  4. A wholesaler or other person who chooses a method of shipment other than the method selected by the secretary shall pay the secretary for the stamps prior to shipment.
1. Every wholesaler doing business at or from an established place of business located within this state and authorized to purchase untaxed tobacco products on an open account directly from manufacturers who have general distribution of tobacco products in Arkansas, and who sell to permitted retailers, are prohibited from transporting cigarettes to which stamps have been affixed outside the boundaries of the State of Arkansas for warehousing or reentry into this state, or both, for either sale or resale.
2. Upon violation of this section by a wholesaler, the Director of Arkansas Tobacco Control shall revoke the wholesaler's permit.
1. The possession limit of tobacco products by any person, upon his or her person or in his or her personal luggage for his or her personal use, not taxed or stamped in accordance with the provisions of this subchapter, is as follows:
  1. 1. One (1) carton of ten (10) packs plus one (1) pack of twenty (20) cigarettes.
    2. A person purchasing cigarettes from a United States military base or installation may have in his or her possession three (3) cartons of ten (10) packs;
  2. Two hundred (200) sticks of cigars, small cigars, or cigarillos; or
  3. Three pounds (3 lbs.) of smoking tobacco.
2. This section applies only to the personal use of tobacco products by an unpermitted person.
1. Except as provided under § 26-57-243, it is unlawful for a person to receive or have in the person's possession for sale, consumption, or any other purpose, any untaxed tobacco products or unstamped cigarettes unless the tax prescribed by this subchapter has been paid directly to the Secretary of the Department of Finance and Administration by the person in possession of the untaxed tobacco products or unstamped cigarettes.
2. The absence of the stamps from any container of cigarettes is notice to all persons that the tax has not been paid and is prima facie evidence of the nonpayment of the tax.
3. If tax has been paid to the secretary on any untaxed tobacco products or unstamped cigarettes, a consumer may establish proof of the payment by providing a receipt or any other documentation that clearly indicates that the tax was paid.
4. This section does not relieve any retail permit holder from the obligations placed on the retail permit holder by § 26-57-228.
5. A retail permit holder shall not have in the retail permit holder possession any unstamped cigarettes or any tobacco products on which the tax prescribed by this subchapter has not been paid.
6. 1. Except to the extent the tobacco products are exempt under § 26-57-243, an Arkansas consumer who purchases any untaxed tobacco products or unstamped cigarettes shall be liable for reporting and remitting all excise tax due on the tobacco products as levied under this subchapter.
  2. The tax due shall be reported on forms provided by the secretary on or before the fifteenth day of the month following the month in which the untaxed purchase was made.
  3. The report shall provide the information prescribed by the secretary.
  4. When a report is filed, the consumer shall remit the full amount of tax due on the untaxed purchase to the secretary.
7. The secretary is authorized to directly assess the excise tax due on any untaxed tobacco products or unstamped cigarettes against a consumer who purchases the items and fails to report and remit the excise tax due in a timely manner.
8. Subsections (f) and (g) of this section are subject to the Arkansas Tax Procedure Act, § 26-18-101 et seq.
9. 1. A wholesaler may possess unstamped cigarettes for sale in or into the state if the wholesaler:
    1. Is permitted to purchase, sell, and affix a stamp to the package containing the cigarettes under § 26-57-1303(c); and
    2. Provides on at least a monthly basis and on the form prescribed by the secretary a report indicating the following for each brand family:
      1. The number of cigarettes purchased during the reporting period;
      2. The number of cigarettes on which the wholesaler affixed the tax stamp prescribed by this subchapter;
      3. The number of cigarettes on which the wholesaler affixed the tax stamp or other similar indicia of taxation prescribed by another state's laws; and
      4. The number of cigarettes that remain in the wholesaler's inventory.
  2. A wholesaler may possess unstamped cigarettes for sale from Arkansas into another state if the wholesaler:
    1. Is permitted to purchase, sell, and affix a stamp to the package containing the cigarettes under the other state's tobacco legislation or directory law, if any;
    2. Would not violate the law of the other state by selling or affixing the tax stamp; and
    3. Provides on at least a monthly basis and on the form prescribed by the secretary a report indicating the following for each brand family:
      1. The number of cigarettes purchased during the reporting period;
      2. The number of cigarettes on which the wholesaler affixed the tax stamp prescribed by this subchapter;
      3. The number of cigarettes on which the wholesaler affixed the tax stamp or other similar indicia of taxation prescribed by another state's laws; and
      4. The number of cigarettes that remain in the wholesaler's inventory.
  3. 1. 1. Except as provided in § 26-57-242, a wholesaler may transfer, transport, or cause to be transported unstamped cigarettes that the wholesaler owns and is permitted to possess from one (1) of the wholesaler's facilities in Arkansas to another of the wholesaler's facilities.
      2. If the wholesaler's facility to which the cigarettes are transferred is located in Arkansas, the applicable time period for affixing a stamp remains in effect and continues to run from the date of the wholesaler's original receipt of the cigarettes.
      3. If the wholesaler's facility to which the cigarettes are transferred is located outside of Arkansas, the wholesaler shall report the quantity and brand of the cigarettes to the secretary, the Attorney General, and the taxing authority of the other state within fifteen (15) days following the end of the month in which the transfer was made.
    2. A stamp deputy may not transfer cigarettes from Arkansas into another state if the transfer would violate the law of the other state.
10. 1. A common carrier or contract carrier may possess and transport unstamped cigarettes in connection with a sale or other transfer permitted under this subchapter if the common carrier or contract carrier has in its possession:
    1. Documents establishing that title to the unstamped cigarettes remains with the manufacturer, importer, or wholesaler; or
    2. Bills of lading or other shipping documents establishing that the common carrier or contract carrier is delivering the cigarettes on behalf of a person authorized to sell or transfer the unstamped cigarettes under this subchapter.
  2. The documents required under subdivision (j)(1) of this section shall list the name and address of the person to whom the cigarettes are being delivered.
11. A manufacturer or importer and the contractor, agent, common carrier, or contract carrier of a manufacturer or importer may possess, transport, or cause to be transported unstamped cigarettes in, into, or from the state for use in connection with consumer testing permitted under the laws of the state in which the testing is to be done if the:
  1. Cigarettes are not currently commercially marketed in the United States;
  2. Manufacturer pays applicable state excise taxes on the cigarettes;
  3. Nonparticipating manufacturer, if any, deposits the necessary escrow on the cigarettes under § 26-57-261;
  4. Participating manufacturer, if any, includes the cigarettes in the participating manufacturer's volume for purposes of the Master Settlement Agreement, as defined in § 26-57-260;
  5. Cigarettes are provided at no cost to the consumer testing participants; and
  6. Cigarettes used by a manufacturer or importer for consumer testing do not exceed a reasonable quantity.
1. Except as otherwise authorized by this subchapter, a person who knowingly purchases, sells, offers for sale, receives, possesses, or transports upon his or her person, on his or her premises, or in his or her vehicle any cigarettes that do not have affixed the stamps required by this subchapter or any tobacco products upon which the taxes imposed by this subchapter have not been paid upon conviction is guilty of a criminal offense that is a:
  1. Class C felony if the tax value of the total amount of tobacco products is equal to or exceeds one hundred dollars ($100); or
  2. Class A misdemeanor if the tax value of the total amount of tobacco products is less than one hundred dollars ($100).
2. 1. A violation under subsection (a) of this section is a deceptive or unconscionable trade practice under §§ 4-88-101 — 4-88-115 and may be enforced by the Attorney General.
  2. Each purchase, sale, or offer to sell unstamped cigarettes or untaxed tobacco products in violation of subsection (a) of this section constitutes a separate violation.
1. Cigarettes to which stamps have not been affixed as provided by law are subject to seizure and shall be held as evidence for prosecution.
2. The Director of Arkansas Tobacco Control may seize and hold for disposition of the courts or the Arkansas Tobacco Control Board all tobacco products, vapor products, alternative nicotine products, or e-liquid products found in the possession of a person dealing in, or a consumer of, tobacco products, vapor products, alternative nicotine products, or e-liquid products if:
  1. Prima facie evidence exists that the full amount of excise tax due on the tobacco products has not been paid to the Secretary of the Department of Finance and Administration;
  2. Tobacco products, vapor products, alternative nicotine products, or e-liquid products are in the possession of a wholesaler who does not possess a current Arkansas wholesale permit;
  3. A retail establishment does not possess a current Arkansas retail permit; or
  4. The tobacco products, vapor products, alternative nicotine products, or e-liquid products have been offered for sale to the public at another location without a current Arkansas retail permit.
3. Property, including money, used to facilitate a violation of this subchapter or the Unfair Cigarette Sales Act, § 4-75-701 et seq., may be seized and forfeited to the state.
4. 1. A prosecuting attorney may institute a civil action against a person who is convicted of a criminal violation under this subchapter or the Unfair Cigarette Sales Act, § 4-75-701 et seq., to obtain a judgment for:
    1. Damages in an amount equal to the value of the property, funds, or a monetary instrument involved in the violation;
    2. The proceeds acquired by a person involved in the enterprise or by reason of conduct in furtherance of the violation; and
    3. Costs incurred by Arkansas Tobacco Control in the investigation, prosecution, and adjudication of criminal, civil, and administrative proceedings.
  2. The standard of proof in an action brought under subdivision (d)(1) of this section is preponderance of the evidence.
5. The following are subject to forfeiture under this section upon order by a circuit court:
  1. Tobacco products, vapor products, alternative nicotine products, or e-liquid products distributed, dispensed, or acquired in violation of this subchapter;
  2. Raw materials, products, or equipment used or intended for use in manufacturing, compounding, processing, delivering, importing, or exporting a tobacco product, vapor product, alternative nicotine product, or e-liquid product in violation of this subchapter;
  3. Property that is used or intended for use as a container for property described in subdivision (e)(1) or subdivision (e)(2) of this section;
  4. 1. Except as provided in subdivision (e)(4)(B) of this section, a conveyance, including an aircraft, vehicle, or vessel, that is used or intended to be used to transport or in any manner to facilitate the transportation for the purpose of sale or receipt of property described in subdivision (e)(1) or subdivision (e)(2) of this section.
    2. 1. A conveyance used by a person as a common carrier in the transaction of business as a common carrier is not subject to forfeiture under this section unless it appears that the owner or other person in charge of the conveyance is a consenting party or privy to a violation of this subchapter.
      2. A conveyance is not subject to forfeiture under this section by reason of an act or omission established by the owner of the conveyance to have been committed or omitted without his or her knowledge or consent.
    3. Upon a showing described in subdivision (e)(4)(B)(i) of this section by the owner or interest holder of a conveyance, the conveyance may nevertheless be forfeited if the prosecuting attorney establishes that the owner or interest holder either knew or should reasonably have known that the conveyance would be used to transport or in any manner to facilitate the transportation for the purpose of sale or receipt of property described in subdivision (e)(1) or subdivision (e)(2) of this section.
    4. A conveyance encumbered by a bona fide security interest is subject to the interest of the secured party if the secured party neither had knowledge of nor consented to an act or omission in violation of this subchapter;
  5. A book, record, or research product or material, including a formula, microfilm, tape, or data that is used or intended for use in violation of this subchapter;
  6. 1. Except as provided in subdivision (e)(6)(B) of this section, a thing of value, including:
      1. Firearms purchased from the proceeds of the sale of untaxed tobacco products, vapor products, alternative nicotine products, or e-liquid products in violation of this subchapter or used in furtherance of a criminal offense as described in § 26-57-245;
      2. Proceeds or profits traceable to an exchange described in subdivision (e)(6)(A)(i) of this section; and
      3. Money, negotiable instruments, or security used or intended to be used to facilitate a violation of this subchapter.
    2. Property shall not be forfeited under subdivision (e)(6)(A) of this section to the extent of the interest of an owner by reason of an act or omission established by him or her by a preponderance of the evidence to have been committed or omitted without his or her knowledge or consent;
  7. 1. Money, coins, or currency found in close proximity to a forfeitable tobacco product, vapor product, alternative nicotine product, or e-liquid product or a forfeitable record of an importation of a tobacco product, vapor product, alternative nicotine product, or e-liquid product is presumed to be forfeitable under this section.
    2. The burden of proof is upon a claimant of the money, coins, or currency to rebut the presumption in subdivision (e)(7)(A) of this section by a preponderance of the evidence; and
  8. 1. Except as provided in subdivision (e)(8)(B) of this section, real property if it substantially assisted in, facilitated in any manner, or was used or intended for use in the commission of any act prohibited by this subchapter.
    2. 1. Real property is not subject to forfeiture under this section by reason of an act or omission established by the owner of the real property by a preponderance of the evidence to have been committed or omitted without his or her knowledge or consent.
      2. A forfeiture of real property encumbered by a mortgage or other lien is subject to the interest of the secured party if the secured party neither had knowledge of nor consented to an act or omission in violation of this subchapter.
      3. If the circuit court finds by a preponderance of the evidence that grounds for a forfeiture exist under this section, the court shall enter an order requiring the forfeiture of the real property.
    3. Upon an order of forfeiture of real property, the order shall be filed on the day issued and shall have prospective effect.
    4. A forfeiture of real property does not affect the title of a bona fide purchaser who purchased the real property before the issuance of the order, and the order has no force or effect on the title of the bona fide purchaser.
    5. A lis pendens filed in connection with an action pending under this section that may result in the forfeiture of real property is effective only from the time filed and has no retroactive effect.
6. A tobacco product, vapor product, alternative nicotine product, or e-liquid product that is possessed, transferred, sold, or offered for sale in violation of this subchapter may be seized and immediately forfeited to the state.
7. 1. Property subject to forfeiture under this subchapter may be seized by a law enforcement agent upon process issued by a circuit court having jurisdiction over the property on petition filed by the prosecuting attorney of the judicial circuit.
  2. Seizure without process may be made if:
    1. The seizure is incident to an arrest or a search under a search warrant or an inspection under the regulatory authority of Arkansas Tobacco Control;
    2. The property subject to seizure has been the subject of a prior judgment in favor of the state in a criminal injunction or forfeiture proceeding based upon this subchapter;
    3. The seizing law enforcement agency has probable cause to believe that the property is directly or indirectly dangerous to health or safety; or
    4. The seizing law enforcement agency has probable cause to believe that the property was used or is intended to be used in violation of this subchapter.
8. 1. A state or local law enforcement agency shall not transfer property seized by the state or local agency under this section to a federal entity for forfeiture under federal law unless the circuit court having jurisdiction over the property enters an order, upon petition by the prosecuting attorney, authorizing the property to be transferred to the federal entity.
  2. The transfer shall not be approved unless it reasonably appears that the activity giving rise to the investigation or seizure involves more than one (1) state or the nature of the investigation or seizure would be better pursued under federal law.
9. 1. Property seized for forfeiture under this section is not subject to replevin but is deemed to be in the custody of the seizing law enforcement agency subject only to an order or decree of the circuit court having jurisdiction over the property seized.
  2. Subject to a need to retain the property as evidence, when property is seized under this subchapter, the seizing law enforcement agency may:
    1. Remove the property to a place designated by the circuit court;
    2. Place the property under constructive seizure, posting notice of pending forfeiture on it by:
      1. Giving notice of pending forfeiture to its owners and interest holders; or
      2. Filing notice of pending forfeiture in an appropriate public record relating to the property;
    3. Remove the property to a storage area for safekeeping or, if the property is a negotiable instrument or money or is not needed for evidentiary purposes, deposit it into an interest-bearing account; or
    4. Provide for another agency or custodian, including an owner, secured party, mortgagee, or lienholder, to take custody of the property and service, maintain, and operate it as reasonably necessary to maintain its value in an appropriate location within the jurisdiction of the court.
  3. 1. In case of transfer of property, a transfer receipt shall be prepared by the transferring agency.
    2. The transfer receipt shall:
      1. List a detailed and complete description of the property being transferred;
      2. State to whom the property is being transferred and the source or authorization for the transfer; and
      3. Be signed by both the transferor and the transferee.
    3. Both transferor and transferee shall maintain a copy of the transfer receipt.
  4. A person who acts as custodian of property under this section is not liable to any person on account of an act done in a reasonable manner in compliance with an order under this subchapter.
10. 1. Property seized by a state or local law enforcement officer under this section who is detached to, deputized or commissioned by, or working in conjunction with a federal agency remains subject to this section.
  2. 1. If property is seized for forfeiture by a law enforcement agency under this section, the seizing law enforcement officer shall prepare and sign a confiscation report.
    2. 1. The party from whom the property is seized shall also sign the confiscation report if present and shall immediately receive a copy of the confiscation report.
      2. If the party refuses to sign the confiscation report, the confiscation report shall be signed by one (1) additional law enforcement officer, stating that the party refused to sign the confiscation report.
    3. The original confiscation report shall be:
      1. Filed with the seizing law enforcement agency within forty-eight (48) hours after the seizure; and
      2. Maintained in a separate file.
    4. One (1) copy of the confiscation report shall be retained by the seizing law enforcement officer.
  3. The confiscation report shall contain the following information:
    1. A detailed description of the property seized including serial or model numbers and odometer or hour reading of vehicles or equipment;
    2. The date of seizure;
    3. The name and address of the party from whom the property was seized;
    4. The reason for the seizure;
    5. The location where the property will be held;
    6. The seizing law enforcement officer's name; and
    7. A signed statement by the seizing law enforcement officer stating that the confiscation report is true and complete.
  4. Within three (3) business days after receiving the confiscation report, the seizing law enforcement agency shall forward a copy of the confiscation report to the prosecuting attorney for the district where the property was seized and to the director.
  5. 1. Arkansas Legislative Audit shall notify the director and a circuit court in the county of a law enforcement agency, prosecuting attorney, or other public entity that the law enforcement agency, prosecuting attorney, or public entity is ineligible to receive forfeited funds, forfeited property, or grants from the council, if Arkansas Legislative Audit determines by its own investigation or upon written notice from the director that:
      1. The law enforcement agency failed to complete and file the confiscation reports as required by this section;
      2. The law enforcement agency, prosecuting attorney, or public entity has not properly accounted for the seized property; or
      3. The prosecuting attorney has failed to comply with the notification requirement set forth in subdivision (m)(2) of this section.
    2. After the notice, the circuit court shall not issue an order distributing seized property to that law enforcement agency, prosecuting attorney, or public entity, nor shall a grant be awarded by the council to that law enforcement agency, prosecuting attorney, or public entity until:
      1. The appropriate officials of the law enforcement agency, prosecuting attorney, or public entity have appeared before the Legislative Joint Auditing Committee; and
      2. The Legislative Joint Auditing Committee has adopted a motion authorizing subsequent transfers of forfeited property to the law enforcement agency, prosecuting attorney, or public entity.
    3. 1. If a law enforcement agency, prosecuting attorney, or other public entity is ineligible to receive forfeited property, the circuit court shall order money that would have been distributed to that law enforcement agency, prosecuting attorney, or public entity to be transmitted to the Treasurer of State for deposit into the Special State Assets Forfeiture Fund.
      2. If the property is not cash, the circuit court shall order the property converted to cash under this section and the proceeds transmitted to the Treasurer of State for deposit into the Special State Assets Forfeiture Fund.
    4. Moneys deposited into the Special State Assets Forfeiture Fund are not subject to recovery or retrieval by an ineligible law enforcement agency, prosecuting attorney, or other public entity.
  6. The director shall establish by rule a standardized confiscation report form to be used by all law enforcement agencies, with specific instructions and guidelines concerning the nature and dollar value of all property, including firearms, to be included in the confiscation report and forwarded to the office of the local prosecuting attorney and the Director of Arkansas Tobacco Control under this subsection.
11. 1. 1. The prosecuting attorney shall initiate forfeiture proceedings by filing a complaint with the circuit clerk of the county where the property was seized and by serving the complaint on all known owners and interest holders of the seized property in accordance with the Arkansas Rules of Civil Procedure.
    2. The complaint may be based on in rem or in personam jurisdiction but shall not be filed to avoid the distribution requirements set forth in subdivision (l)(1) of this section.
    3. The prosecuting attorney shall mail a copy of the complaint to the director within five (5) calendar days after filing the complaint.
  2. 1. The complaint shall include a copy of the confiscation report and shall be filed within sixty (60) days after receiving a copy of the confiscation report from the seizing law enforcement agency.
    2. In a case involving real property, the complaint shall be filed within sixty (60) days of the defendant's conviction on the charge giving rise to the forfeiture.
  3. 1. The prosecuting attorney may file the complaint after the expiration of the time only if the complaint is accompanied by a statement of good cause for the late filing.
    2. However, the complaint shall not be filed more than one hundred twenty (120) days after either the date of the seizure or, in a case involving real property, the date of the defendant's conviction.
    3. 1. If the circuit court determines that good cause has not been established, the circuit court shall order that the seized property be returned to the owner or interest holder.
      2. In addition, items seized but not subject to forfeiture under this section or subject to disposition under law or the Arkansas Rules of Criminal Procedure may be ordered returned to the owner or interest holder.
      3. If the owner or interest holder cannot be determined, the court may order disposition of the property.
  4. Within the time set forth in the Arkansas Rules of Civil Procedure, the owner or interest holder of the seized property shall file with the circuit clerk a verified answer to the complaint that shall include:
    1. A statement describing the seized property and the owner's interest or interest holder's interest in the seized property with supporting documents to establish the owner's interest or interest holder's interest;
    2. A certification by the owner or interest holder stating that he or she has read the document and that it has not been filed for an improper purpose;
    3. A statement setting forth any defense to forfeiture; and
    4. The address at which the owner or interest holder will accept mail.
  5. 1. If the owner or interest holder fails to file an answer, the prosecuting attorney may move for default judgment under the Arkansas Rules of Civil Procedure.
    2. 1. If a timely answer has been filed, the prosecuting attorney has the burden of proving by a preponderance of the evidence that the seized property should be forfeited.
      2. After the prosecuting attorney has presented proof, an owner or interest holder of the property seized is allowed to present evidence showing why the seized property should not be forfeited.
      3. If the circuit court determines that grounds for forfeiting the seized property exist and that a defense to forfeiture has not been established by the owner or interest holder, the circuit court shall enter an order under this section. However, if the circuit court determines either that the prosecuting attorney has failed to establish that grounds for forfeiting the seized property exist or that the owner or interest holder has established a defense to forfeiture, the court shall order that the seized property be immediately returned to the owner or interest holder.
12. 1. If the circuit court having jurisdiction over the seized property finds upon a hearing by a preponderance of the evidence that grounds for a forfeiture exist under this subchapter, the circuit court shall enter an order:
    1. To permit the law enforcement agency or prosecuting attorney to retain the seized property for law enforcement or prosecutorial purposes, subject to the following provisions:
      1. Seized property may not be retained for official use for more than three (3) years, unless the circuit court finds that the seized property has been used for law enforcement or prosecutorial purposes and authorizes continued use for those purposes on an annual basis.
        
        At the end of the retention period, the seized property shall be sold and eighty percent (80%) of the proceeds shall be deposited into the tobacco control fund of the retaining law enforcement agency or prosecuting attorney, and twenty percent (20%) of the proceeds shall be deposited into the State Treasury as special revenues to be credited to the Special State Assets Forfeiture Fund.
        
        The retaining law enforcement agency or prosecuting attorney may sell the retained seized property during the time allowed for retention. However, the proceeds of the sale shall be distributed as set forth in subdivision (l)(1)(A)(i)(b ) of this section;
      2. If the circuit court determines that retained seized property has been used for personal use or by non-law enforcement personnel for non-law enforcement purposes, the circuit court shall order the seized property to be sold under § 5-5-101(e) and (f), and the proceeds shall be deposited into the State Treasury as special revenues to be credited to the Special State Assets Forfeiture Fund;
      3. A law enforcement agency may use forfeited property or money if the circuit court's order specifies that the forfeited property or money is forfeited to the prosecuting attorney, sheriff, chief of police, Division of Arkansas State Police, director, or Arkansas Highway Police Division of the Arkansas Department of Transportation.
        
        After the order, the prosecuting attorney, sheriff, chief of police, Division of Arkansas State Police, director, or Arkansas Highway Police Division of the Arkansas Department of Transportation shall maintain an inventory of the forfeited property or money, be accountable for the forfeited property or money, and be subject to subdivision (j)(5) of this section with respect to the forfeited property or money;
      4. An aircraft is forfeited to the office of the director and may be used only for tobacco, vapor product, alternative nicotine product, or e-liquid product smuggling interdiction efforts within the discretion of the director.
        
        However, if the director determines that the aircraft should be sold, the proceeds of the sale shall be distributed as set forth in subdivision (l)(1)(A)(i)(b) of this section;
      5. A firearm not retained for official use shall be disposed of in accordance with state and federal law; and
      6. A tobacco product, vapor product, alternative nicotine product, or e-liquid product shall be destroyed pursuant to a court order;
    2. 1. To sell seized property that is not required by law to be destroyed and that is not harmful to the public.
      2. Seized property described in subdivision (l)(1)(B)(i) of this section shall be sold at a public sale by the retaining law enforcement agency or prosecuting attorney under § 5-5-101(e) and (f); or
    3. To transfer a motor vehicle to a school district for use in a driver education course.
  2. Disposition of forfeited property under this subsection is subject to the need to retain the forfeited property as evidence in any related proceeding.
  3. Within three (3) business days after the entry of the order, the circuit clerk shall forward to the director copies of the confiscation report, the circuit court's order, and other documentation detailing the disposition of the seized property.
13. 1. 1. Subject to subdivision (j)(5) of this section, the proceeds of sales conducted under this section and moneys forfeited or obtained by judgment or settlement under this subchapter shall be deposited and distributed in the manner provided in this subsection.
    2. Moneys received from a federal forfeiture for a violation of this subchapter shall be deposited and distributed under this section.
  2. 1. The proceeds of a sale and moneys forfeited or obtained by judgment or settlement under this subchapter shall be deposited into the asset forfeiture fund of the prosecuting attorney and is subject to the following provisions:
      1. If, during a calendar year, the aggregate amount of moneys deposited into the asset forfeiture fund exceeds twenty thousand dollars ($20,000) per county, the prosecuting attorney, within fourteen (14) days after that time, shall notify the circuit judges in the judicial district and the director;
      2. Subsequent to the notification set forth in this section, twenty percent (20%) of the proceeds of an additional sale and additional moneys forfeited or obtained by judgment or settlement under this subchapter in the same calendar year shall be deposited into the State Treasury as special revenues to be credited to the Special State Assets Forfeiture Fund, and the remainder shall be deposited into the asset forfeiture fund of the prosecuting attorney;
      3. Failure by the prosecuting attorney to comply with the notification requirement set forth in this section renders the prosecuting attorney and an entity eligible to receive forfeited moneys or property from the prosecuting attorney ineligible to receive forfeited moneys or property, except as provided in this section; and
      4. Twenty percent (20%) of moneys in excess of twenty thousand dollars ($20,000) that have been retained but not reported as required by this section are subject to recovery for deposit into the Special State Assets Forfeiture Fund.
    2. The prosecuting attorney shall administer expenditures from the asset forfeiture fund, which is subject to audit by Arkansas Legislative Audit. Moneys distributed from the asset forfeiture fund shall be used only for law enforcement and prosecutorial purposes. Moneys in the asset forfeiture fund shall be distributed in the following order:
      1. For the satisfaction of a bona fide security interest or lien;
      2. For payment of a proper expense of the proceeding for forfeiture and sale, including expenses of seizure, maintenance of custody, advertising, and court costs;
      3. Any balance under three hundred fifty thousand dollars ($350,000) shall be distributed proportionally so as to reflect generally the contribution of the appropriate local or state law enforcement or prosecutorial agency's participation in any activity that led to the seizure or forfeiture of the property or deposit of moneys under this subchapter; and
      4. Any balance over three hundred fifty thousand dollars ($350,000) shall be forwarded to the director to be transferred to the State Treasury for deposit into the Special State Assets Forfeiture Fund for distribution under this section.
    3. 1. For a forfeiture in an amount greater than three hundred fifty thousand dollars ($350,000) from which expenses are paid for a proceeding for forfeiture and sale under this section, an itemized accounting of the expenses shall be delivered to the director within ten (10) calendar days after the distribution of the funds.
      2. The itemized accounting shall include the expenses paid, to whom paid, and for what purposes the expenses were paid.
  3. 1. Moneys received by a prosecuting attorney or law enforcement agency from a federal forfeiture for a violation of this subchapter shall be deposited and maintained in a separate account.
    2. However, a balance over three hundred fifty thousand dollars ($350,000) shall be distributed as required under this section.
  4. Other moneys shall not be maintained in the account except for interest income generated by the account.
  5. Moneys in the account shall only be used for law enforcement and prosecutorial purposes consistent with governing federal law.
  6. The account is subject to audit by Arkansas Legislative Audit.
  7. A balance over three hundred fifty thousand dollars ($350,000) shall be transferred to the State Treasury for deposit into the Special State Assets Forfeiture Fund in which it shall be maintained separately and distributed consistently with governing federal law and upon the advice of the director.
14. In personam jurisdiction may be based on a person's presence in the state or on his or her conduct in the state, as set out in § 16-4-101(C), and is subject to the following additional provisions:
  1. A temporary restraining order under this section may be entered ex parte on application of the state upon a showing that:
    1. There is probable cause to believe that the property with respect to which the order is sought is subject to forfeiture under this section; and
    2. Notice of the action would jeopardize the availability of the property for forfeiture;
  2. 1. Notice of the entry of a temporary restraining order and an opportunity for hearing shall be afforded to a person known to have an interest in the property.
    2. The hearing shall be held at the earliest possible date consistent with Rule 65 of the Arkansas Rules of Civil Procedure and is limited to the issues of whether:
      1. There is a probability that the state will prevail on the issue of forfeiture and that failure to enter the temporary restraining order will result in the property's being destroyed, conveyed, alienated, encumbered, disposed of, received, removed from the jurisdiction of the circuit court, concealed, or otherwise made unavailable for forfeiture; and
      2. The need to preserve the availability of property through the entry of the requested temporary restraining order outweighs the hardship on an owner or interest holder against whom the temporary restraining order is to be entered;
  3. The state has the burden of proof by a preponderance of the evidence to show that the defendant's property is subject to forfeiture;
  4. 1. On a determination of liability of a person for conduct giving rise to forfeiture under this section, the circuit court shall enter a judgment of forfeiture of the property subject to forfeiture as alleged in the complaint and may authorize the prosecuting attorney or a law enforcement officer to seize property subject to forfeiture under this section not previously seized or not then under seizure.
    2. The order of forfeiture shall be consistent with subsection (l) of this section.
    3. In connection with the judgment, on application of the state, the circuit court may enter an appropriate order to protect the interest of the state in property ordered forfeited; and
  5. Subsequent to the finding of liability and order of forfeiture, the following procedures apply:
    1. The attorney for the state shall give notice of pending forfeiture in the manner provided in Rule 4 of the Arkansas Rules of Civil Procedure to an owner or interest holder who has not previously been given notice;
    2. An owner of or interest holder in property that has been ordered forfeited and whose claim is not precluded may file a claim within thirty (30) days after initial notice of pending forfeiture or after notice under Rule 4 of the Arkansas Rules of Civil Procedure, whichever is earlier; and
    3. The circuit court may amend the in personam order of forfeiture if the circuit court determines that a claimant has established that he or she has an interest in the property and that the interest is exempt under this section.
15. The circuit court shall order the forfeiture of other property of a claimant or defendant up to the value of the claimant's or defendant's property found by the circuit court to be subject to forfeiture under this section if any of the forfeitable property had remained under the control or custody of the claimant or defendant and:
  1. Cannot be located;
  2. Was transferred or conveyed to, sold to, or deposited with a third party;
  3. Is beyond the jurisdiction of the circuit court;
  4. Was substantially diminished in value while not in the actual physical custody of the seizing law enforcement agency;
  5. Was commingled with other property that cannot be divided without difficulty; or
  6. Is subject to interest exempted from forfeiture under this subchapter.
16. 1. There is created on the books of law enforcement agencies and prosecuting attorneys a tobacco control fund.
  2. The fund shall consist of moneys obtained under this section and other revenue as may be provided by law or ordinance.
  3. Moneys in the tobacco control fund shall be appropriated on a continuing basis and are not subject to the Revenue Stabilization Law, § 19-5-101 et seq.
  4. 1. The fund shall be used for law enforcement and prosecutorial purposes.
    2. Each prosecuting attorney shall submit to the Director of Arkansas Tobacco Control on or before June 30 of each year a report detailing moneys received and expenditures made from the tobacco control fund during the preceding twelve-month period.
  5. The law enforcement agencies and prosecuting attorneys shall submit to the director on or before June 30 of each year a report detailing any moneys received and expenditures made from the tobacco control fund during the preceding twelve-month period.
  6. Moneys from the tobacco control fund may not supplant other local, state, or federal funds.
  7. The tobacco control fund is subject to audit by Arkansas Legislative Audit.
1. A person who places in his or her stock or who has in his or her possession or on his or her premises, or who sells or offers for sale, any tobacco products on which the tax prescribed by law has not been paid in addition to the other fines and forfeitures may be subject to a penalty of:
  1. Twenty-five dollars ($25.00) for each package of cigarettes, little cigars, and cigarillos up to twenty (20) packages and fifty dollars ($50.00) for each package in excess of twenty (20) packages, held, sold, or offered for sale; and
  2. Fifty dollars ($50.00) for each box of cigars and twenty-five dollars ($25.00) for each unit of tobacco products other than cigarettes held, sold, or offered for sale.
2. The penalty shall be held to be in the nature of a civil penalty and may be collected by civil or administrative action and may be levied by the Arkansas Tobacco Control Board or any circuit court of this state.
3. A penalty assessed under this section shall be deposited into the tobacco control fund of Arkansas Tobacco Control established under § 26-57-247(p).
1. Upon a criminal conviction of a person charged with a violation of a tobacco product, vapor product, alternative nicotine product, or e-liquid product law or rule where the investigation resulted in the seizure of tobacco products, vapor products, alternative nicotine products, or e-liquid products, the court shall issue an order to destroy the tobacco products, vapor products, alternative nicotine products, or e-liquid products confiscated by Arkansas Tobacco Control or by any state, county, or municipal officer in this state.
2. Upon an administrative finding of guilty of any person charged with a violation of a state tobacco product, vapor product, alternative nicotine product, or e-liquid product law or rule in a proceeding before the Arkansas Tobacco Control Board where the investigation resulted in the seizure of tobacco products, vapor products, alternative nicotine products, or e-liquid products, the board shall issue an order to destroy the tobacco products, vapor products, alternative nicotine products, or e-liquid products confiscated by Arkansas Tobacco Control or by any state, county, or municipal officer in this state.
3. Every court of record in this state shall notify the Director of Arkansas Tobacco Control of the disposition made of each case in the court as to whether the defendant was convicted or acquitted.
4. Upon application of the director, the board or the court issuing a destruction order may instead release the tobacco products, vapor products, alternative nicotine products, or e-liquid products to the use and benefit of Arkansas Tobacco Control for suitable law enforcement or training purposes.
5. 1. If a court or the board issues a destruction order, the person charged with the violation is responsible for any destruction fees incurred by Arkansas Tobacco Control.
  2. Destruction fees may vary but shall be determined by the current industry standard for the destruction of tobacco products, vapor products, alternative nicotine products, and e-liquid products.
1. When the Secretary of the Department of Finance and Administration finds from investigation that the state has lost tax revenue because of the evasion of any provision of this subchapter, the secretary may bring suit in the proper court to recover the tax and penalties.
2. The action shall lie against the person evading the tax and against any person who aided, abetted, or assisted in the evasion.
1. All civil actions arising under this subchapter shall be brought by and in the name of the Secretary of the Department of Finance and Administration or the Director of Arkansas Tobacco Control, whichever is appropriate under the provisions of this subchapter.
2. All criminal actions shall be brought and prosecuted by the proper prosecuting attorney.
1. In all prosecutions in the district courts and city courts or other courts of this state, the State of Arkansas shall have the same right of appeal to the circuit courts of this state and upon the same terms as the defendant now has under the law in misdemeanor cases.
2. When appealed, the cases shall be tried de novo by the circuit court.
1. In order to assure that the citizens of this state receive only tobacco products, vapor products, alternative nicotine products, or e-liquid products that are fresh and not contaminated, and to ensure the safety of Arkansas youth, the Director of Arkansas Tobacco Control is authorized under this subchapter to:
  1. Inspect or cause to be inspected any tobacco product, vapor product, alternative nicotine product, or e-liquid container in places of storage or distribution authorized under this subchapter; and
  2. Require any tobacco products, vapor products, alternative nicotine products, or e-liquid containers found to be contaminated, damaged, or not fresh be removed from stock and be either returned to the proper wholesaler or manufacturer for disposal according to law or delivered to the Director of Arkansas Tobacco Control for destruction or disposal.
2. 1. It is a violation for any person to use a tobacco product, vapor product, alternative nicotine product, or e-liquid product in or on the grounds of any school, childcare facility, or healthcare facility.
  2. As used in subdivision (b)(1) of this section:
    1. “Childcare facility” means the same as provided in § 20-78-202(2);
    2. “Healthcare facility” means the same as provided in § 20-27-1803(6); and
    3. “School” means:
      1. Any buildings, parking lots, playing fields, playgrounds, school buses, or other school vehicles; or
      2. Any off-campus school-sponsored or school-sanctioned events with respect to any public, charter, or private school where children attend classes in kindergarten programs or grades one through twelve (1-12).
3. On and after July 22, 2015, all alternative nicotine products and e-liquid containers containing nicotine sold at retail in this state shall satisfy the child-resistant packaging effectiveness standards described in § 26-57-203 when tested in accordance with the method described by 16 C.F.R. § 1700.20, as it existed on January 1, 2015.
4. As used in this section, “e-liquid container” means a bottle or other container of e-liquid that is sold or provided for mixing at retail and is marketed or intended for use in a vapor product, but does not include e-liquid contained in a cartridge that is sold, marketed, or intended for use in a vapor product if the cartridge is prefilled and sealed by the manufacturer and is not intended to be opened by the consumer.
1. There is created the Arkansas Tobacco Control Board to consist of the following eight (8) members appointed by the Governor:
  1. Two (2) members of the board shall be wholesalers of tobacco products, vapor products, alternative nicotine products, or e-liquid products;
  2. Two (2) members of the board shall be retailers of tobacco products, vapor products, alternative nicotine products, or e-liquid products; and
  3. Four (4) members of the board shall be members of the public at large who are not public employees or officials, at least one (1) of whom shall be an African-American, and two (2) of whom shall be appointed by the Governor after consulting the Arkansas Medical Society, Inc. and subject to confirmation by the Senate.
2. The Governor shall designate which member of the board shall act as chair and that person shall serve as chair for two (2) years unless his or her membership on the board ceases prior to the end of the two-year period.
3. 1. All members of the board shall be residents of the State of Arkansas and confirmed by the Senate.
  2. The term of office shall be five (5) years.
4. 1. A minimum of five (5) members is required for a quorum.
  2. 1. All action by the board shall be by a majority vote of the board members present at the regular or special meeting, and the board may take no official action in connection with a matter except at a regular or special meeting.
    2. In the event of a tie vote of the members of the board, the Director of Arkansas Tobacco Control may cast the deciding vote.
5. A person who is not a citizen of the United States and who has not resided in the State of Arkansas for at least two (2) consecutive years immediately preceding the date of appointment shall not be appointed to the board.
6. Each member of the board and the director shall take and subscribe to an oath that he or she will support and enforce this subchapter, the tobacco control laws of this state, the Arkansas Constitution, and the United States Constitution.
7. The board shall:
  1. Act as the adjudicatory body for Arkansas Tobacco Control;
  2. Have responsibility for approving the issuance, suspension, and revocation of the permits enumerated in § 26-57-219;
  3. 1. Conduct public hearings when appropriate regarding a permit authorized under this subchapter or in violation of this subchapter, the Unfair Cigarette Sales Act, § 4-75-701 et seq., § 5-27-227, or any other federal, state, or local statute, ordinance, rule, or regulation concerning the sale of tobacco products, vapor products, alternative nicotine products, or e-liquid products to minors or the rules promulgated by Arkansas Tobacco Control.
    2. After notice and hearing held in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq., if the board finds a violation of this subchapter, the Unfair Cigarette Sales Act, § 4-75-701 et seq., or the rules promulgated by Arkansas Tobacco Control, the board may suspend or revoke any or all permits issued by the director to any person.
    3. The board may levy a civil penalty in an amount not to exceed five thousand dollars ($5,000) for each violation against a person found to be in violation of this subchapter, the Unfair Cigarette Sales Act, § 4-75-701 et seq., or the rules promulgated by Arkansas Tobacco Control.
    4. Each day of a violation is a separate violation.
    5. A civil penalty under subdivision (g)(3)(C) of this section is in addition to any penalties levied by the board under § 26-57-248.
    6. In conducting a hearing under this subdivision (g)(3), the board may examine or cause to be examined under oath any witness and the books and records of a permitted person or other person;
  4. When requested by the written petition of at least three (3) interested parties, conduct public hearings to receive testimony regarding the facts relevant to the issuance of a permit under this subchapter; and
  5. 1. Not have authority in criminal prosecutions or the assessment or collection of any taxes.
    2. However, the board shall refuse to approve the issuance or renewal of a permit issued by the director for the failure to pay taxes or fees imposed on tobacco products or any permit fees imposed under this subchapter or any other state or local taxes.
8. 1. The board may assess penalties for a violation of § 5-27-227 according to the following schedule:
    1. For a first violation within a forty-eight-month period, a civil penalty not to exceed two hundred fifty dollars ($250);
    2. For a second violation within a forty-eight-month period, a civil penalty not to exceed five hundred dollars ($500) and suspension of the permit enumerated in § 26-57-219 for a period not to exceed two (2) days;
    3. For a third violation within a forty-eight-month period, a civil penalty not to exceed one thousand dollars ($1,000) and suspension of the permit enumerated in § 26-57-219 for a period not to exceed seven (7) days;
    4. For a fourth or subsequent violation within a forty-eight-month period, a civil penalty not to exceed two thousand dollars ($2,000) and suspension of the permit enumerated in § 26-57-219 for a period not to exceed fourteen (14) days; and
    5. For a fifth or subsequent violation within a forty-eight-month period, in addition to the other penalties provided under this subsection, the permit enumerated in § 26-57-219 may be revoked.
  2. 1. A penalty under this subsection shall not be imposed on a retailer or an agent or employee of a retailer who can establish an affirmative defense that before the date of the violation the retailer or agent or employee of the retailer furnishing the tobacco products, vapor products, alternative nicotine products, e-liquid products, or cigarette papers reasonably relied on proof of age that identified the person receiving the tobacco products, vapor products, alternative nicotine products, e-liquid products, or cigarette papers as not being a minor.
    2. As used in this subsection, “proof of age” means valid documentation issued by a governmental agency containing the person's photograph, date of birth, and an expiration date.
  3. 1. For a corporation or business with more than one (1) retail location, to determine the number of accumulated violations for purposes of the penalty schedule stated in this subsection, violations of § 5-27-227 by one (1) retail location shall not be accumulated against other retail locations of that same corporation or business.
    2. For a retail location, for purposes of the penalty schedule stated in this subsection, violations accumulated and assessed against a prior owner of the retail location shall not be accumulated against a new owner of the same retail location unless approved by the board.
1. Arkansas Tobacco Control shall:
  1. Promulgate rules for the proper enforcement and implementation of this subchapter and the Unfair Cigarette Sales Act, § 4-75-701 et seq.;
  2. 1. Receive applications for and issue, refuse, suspend, and revoke permits listed in § 26-57-219.
    2. Arkansas Tobacco Control shall refuse to issue or renew any permits issued by the Director of Arkansas Tobacco Control for the failure to pay taxes or fees imposed on tobacco products, permit fees imposed under this subchapter, or any other state or local taxes;
  3. Prescribe forms of applications for permits under this subchapter;
  4. 1. Cooperate with the Revenue Division of the Department of Finance and Administration in the enforcement of the tax laws affecting the sale of tobacco products in this state and in the enforcement of all other state and local tax laws.
    2. To facilitate efforts to cooperate with the division concerning the enforcement of all other state and local tax laws, Arkansas Tobacco Control shall immediately require that the following additional information be provided by all applicants for permit issuance or renewal:
      1. Federal tax identification numbers issued by the Internal Revenue Service;
      2. Social Security numbers; and
      3. State sales tax account numbers assigned by the Department of Finance and Administration, if applicable.
    3. 1. Each year Arkansas Tobacco Control shall provide a list of all applicants for the issuance or renewal of all tobacco products, vapor product, alternative nicotine product, or e-liquid product permits to the Secretary of the Department of Finance and Administration.
      2. This list shall contain the identifying information required by subdivision (a)(4)(B) of this section as well as the name of the permittee and the permittee's current business address;
  5. 1. Collect civil penalties assessed by the Arkansas Tobacco Control Board under § 26-57-255.
    2. Unless the civil penalty is paid within fifteen (15) days following the date for an appeal from the order, the director shall have the power to institute a civil action in the Pulaski County Circuit Court to recover the civil penalties assessed; and
  6. 1. Provide notice to the retail location of an alleged violation of § 5-27-227 within ten (10) days of the alleged violation.
    2. The notice required under subdivision (a)(6)(A) of this section shall contain the date and time of the alleged violation.
2. Any tobacco products, vapor products, alternative nicotine products, e-liquid products, or cigarette papers found in the possession of a minor may be confiscated and destroyed.
3. Except as otherwise provided by law, the penalties collected under this section shall be deposited into the State Treasury.
1. 1. The Governor shall employ a person to serve as the Director of Arkansas Tobacco Control.
  2. The director shall serve at the pleasure of the Governor.
2. The director or his or her designee shall present all evidence tending to prove violations of law, rules, or regulations at hearings held by the Arkansas Tobacco Control Board.
3. The director, in consultation with the Secretary of the Department of Finance and Administration, may employ other personnel as he or she deems necessary and as authorized by the General Assembly.
4. Any personnel employed by the director shall serve at his or her pleasure.
5. 1. The director may adopt, keep, and use a common seal.
  2. This seal may be used for authentication of the records, process, and proceedings of the director or the board, respectively.
  3. Judicial notice shall be taken of each use of this seal in all of the courts of the state.
6. Any process, notice, or other paper that the director is authorized by law to issue shall be deemed sufficient if signed by the director or authenticated by the seal of the director.
7. All acts, orders, proceedings, rules, regulations, entries, minutes, and other records of the director and all reports and documents filed with the director may be proved in any court of this state by a copy certified by the director with his or her signature or the seal attached.
8. 1. The director shall maintain records of all permits issued, suspended, denied, or revoked by the board.
  2. The records shall contain the information as to the identity of the permit holder, including the names of all officers and members of the business entities holding permits and the location of the permitted premises.
9. The director shall recognize the Division of Aging, Adult, and Behavioral Health Services of the Department of Human Services as the agency responsible for ensuring full compliance with the Public Health Service Act, § 1926(b), 42 U.S.C. § 300x-26(b), and shall call upon administrative departments of the state, county, and city governments, sheriffs, city police departments, or other law enforcement officers for such information and assistance as the director may deem necessary in the performance of the duties imposed upon him or her by this subchapter.
10. The director may inspect or cause to be inspected any premises where tobacco products, vapor products, alternative nicotine products, or e-liquid products are manufactured, imported, distributed, stored, or sold on the premises where the records of the manufacture, importation, distribution, storage, or sale are stored.
11. The director may:
  1. Examine or cause to be examined any person under oath and examine or cause to be examined books and records of any permit holder;
  2. Hear testimony and take proof material to his or her information and the discharge of his or her duties under this section;
  3. Administer oaths or cause oaths to be administered; and
  4. 1. Issue subpoenas to require the attendance of witnesses and the production of books and records.
    2. Any circuit court by written order may require the attendance of witnesses or the production of relevant books or other records subpoenaed by the director, and the court may compel obedience to its order by proceedings for contempt.
12. All hearings and appeals from any hearing shall be conducted in accordance with the Arkansas Administrative Procedure Act, § 25-15-201 et seq.
13. The director shall exercise other powers, functions, and duties as are or may be imposed or conferred upon him or her by law or the board.
14. The director shall have other powers, functions, and duties pertaining to the issuance, suspension, and revocation of the permits enumerated in § 26-57-219, except those that are specifically delegated to the Department of Finance and Administration by this subchapter.
15. 1. 1. The power and duty to collect taxes imposed on tobacco products is specifically exempted from the powers and duties granted or assigned to the board or the director.
    2. However, a permit holder's failure to pay taxes or fees imposed on tobacco products or any permit fees imposed by this subchapter in a timely manner is grounds for the nonissuance, suspension, revocation, or nonrenewal of any permits issued by the director.
    3. Failure to timely and fully pay any other state and local taxes as reported by the secretary shall also constitute grounds for the nonissuance, suspension, revocation, or nonrenewal of any permits issued by the director.
  2. 1. Each year the secretary shall report to the director all permit holders who are more than ninety (90) days delinquent on any state or local taxes.
    2. The director shall not issue or renew any permit issued under this section for any permit holder more than ninety (90) days delinquent on any privilege fee or tax addressed in this section unless the permit holder demonstrates that he or she is current under a valid repayment agreement for the delinquent tax.
16. The enforcement of state laws relating to the prohibition of the barter or sale of tobacco products, vapor products, alternative nicotine products, e-liquid products, or cigarette papers to a minor by multiple state agencies shall be coordinated to avoid duplicative inspections of the same retailer by multiple state agencies.
1. 1. This subchapter and the rules and other actions of the Arkansas Tobacco Control Board or Arkansas Tobacco Control shall not be construed or interpreted so as to preempt or in any other manner qualify or limit the enactment and enforcement of any federal or state regulation of the manufacture, sale, storage, or distribution of tobacco products that is more restrictive than this subchapter or the rules promulgated by Arkansas Tobacco Control.
  2. 1. This subchapter and the rules and other actions of the board or Arkansas Tobacco Control shall preempt the enactment and enforcement of any county, municipal, or other local regulation of the manufacture, sale, storage, or distribution of tobacco products that is more restrictive than this subchapter or the rules promulgated by Arkansas Tobacco Control.
    2. A county, municipal, or other local regulation of the manufacture, sale, storage, or distribution of tobacco products that is more restrictive than this subchapter or the rules promulgated by Arkansas Tobacco Control and that has been enacted as of September 1, 2019, is not preempted under this subdivision (a)(2).
2. This subchapter and the rules and other actions of Arkansas Tobacco Control or the board shall not be construed or interpreted so as to preempt or otherwise limit any legal or equitable claims or causes of action brought under the common law or any federal or state statutes.
3. This subchapter and the rules of Arkansas Tobacco Control shall not be construed or interpreted so as to require a state, county, municipal, or other local authority to exhaust any administrative remedies through the board, including without limitation the right to seize and forward to the board the state permit of a vendor or retailer found to have illegally sold tobacco products, vapor products, alternative nicotine products, or e-liquid products to a minor, provided that the vendor or retailer shall be given a hearing before the board at the board's next regularly scheduled meeting.
1. Any tobacco product manufacturer selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary or intermediaries, after July 30, 1999, shall do one (1) of the following:
  1. Become a participating manufacturer, as that term is defined in section II(jj) of the Master Settlement Agreement, and generally perform its financial obligations under the Master Settlement Agreement; or
  2. 1. Place into a qualified escrow fund by April 15 of the year following the year in question the following amounts, as the amounts are adjusted for inflation:
      1. 1999: $.0094241 per unit sold after July 30, 1999;
      2. 2000: $.0104712 per unit sold;
      3. For each of 2001 and 2002: $.0136125 per unit sold;
      4. For each of 2003 through 2006: $.0167539 per unit sold; and
      5. For each of 2007 and each year thereafter: $.0188482 per unit sold.
    2. A tobacco product manufacturer that places funds into escrow pursuant to subdivision (a)(2)(A) of this section shall receive the interest or other appreciation on the funds as earned. The funds themselves shall be released from escrow only under the following circumstances:
      1. To pay a judgment or settlement on any released claim brought against the tobacco product manufacturer by the state or any releasing party located or residing in the state. Funds shall be released from escrow under this subdivision (a)(2)(B)(i):
        
        In the order in which they were placed into escrow; and
        
        Only to the extent and at the time necessary to make payments required under the judgment or settlement;
      2. To the extent that a tobacco product manufacturer establishes that the amount it was required to place into escrow on account of units sold in the state in a particular year was greater than the Master Settlement Agreement payments, as determined under section IX(i) of the Master Settlement Agreement including after final determination of all adjustments, that the manufacturer would have been required to make on account of the units sold had it been a participating manufacturer, the excess shall be released from escrow and revert back to the tobacco product manufacturer; or
      3. To the extent not released from escrow under subdivisions (a)(2)(B)(i) or (a)(2)(B)(ii) of this section, funds shall be released from escrow and revert back to the tobacco product manufacturer twenty-five (25) years after the date on which they were placed into escrow.
    3. Each tobacco product manufacturer who elects to place funds into escrow pursuant to subdivision (a)(2) of this section shall annually certify to the Attorney General that the tobacco product manufacturer is in compliance with subdivision (a)(2) of this section. The Attorney General may bring a civil action on behalf of the state against any tobacco product manufacturer that fails to place into escrow the funds required under this section. Any tobacco product manufacturer that fails in any year to place into escrow the funds required under this section shall:
      1. Be required within fifteen (15) days to place the funds into escrow as shall bring the tobacco product manufacturer into compliance with this section. The court, upon a finding of a violation of subdivision (a)(2) of this section, may impose a civil penalty to be paid into the General Revenue Fund Account of the State Apportionment Fund in an amount not to exceed five percent (5%) of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed one hundred percent (100%) of the original amount improperly withheld from escrow;
      2. In the case of a knowing violation, be required within fifteen (15) days to place the funds into escrow as shall bring the tobacco product manufacturer into compliance with this section. The court, upon a finding of a knowing violation of subdivision (a)(2) of this section, may impose a civil penalty to be paid into the General Revenue Fund Account of the Apportionment Fund in an amount not to exceed fifteen percent (15%) of the amount improperly withheld from escrow per day of the violation and in a total amount not to exceed three hundred percent (300%) of the original amount improperly withheld from escrow; and
      3. In the case of a second knowing violation, be prohibited from selling cigarettes to consumers within the state, whether directly or through a distributor, retailer, or similar intermediary for a period not to exceed two (2) years.
2. Each failure to make an annual deposit required under this section shall constitute a separate violation.
1. Findings and Purpose.
  1. Cigarette smoking presents serious public health concerns to the state and to the citizens of the state. The Surgeon General has determined that smoking causes lung cancer, heart disease, and other serious diseases and that there are hundreds of thousands of tobacco-related deaths in the United States each year. These diseases most often do not appear until many years after the person in question begins smoking.
  2. It is the policy of the state that consumers be adequately informed about the adverse health effects of cigarette smoking by including warning notices on each package of cigarettes.
  3. It is the intent of the General Assembly to align state law with federal laws, regulations, and policies relating to the manufacture, importation, and marketing of cigarettes, and in particular, the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. § 1331 et seq., and 26 U.S.C. § 5754.
  4. The General Assembly finds that consumers and retailers purchasing cigarettes are entitled to be fully informed about any adverse health effects of cigarette smoking by the inclusion of warning notices on each package of cigarettes and to be assured through appropriate enforcement measures that cigarettes they purchase were manufactured for consumption within the United States.
2. Definitions. As used in this section:
  1. 1. “Cigarette” means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains:
      1. Any roll of tobacco wrapped in paper or in any substance not containing tobacco;
      2. Tobacco, in any form, that is functional in the product which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling is likely to be offered to or purchased by consumers as a cigarette; or
      3. Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling is likely to be offered to or purchased by consumers as a cigarette described in subdivision (b)(1)(A)(i) of this section.
    2. “Cigarette” includes “roll your own”, which is any tobacco which, because of its appearance, type, packaging, or labeling is suitable for use and likely to be offered to or purchased by consumers as tobacco for making cigarettes.
    3. For purposes of this definition of “cigarette”, nine one-hundredths of an ounce (0.09 oz.) of “roll your own” tobacco shall constitute one (1) individual “cigarette”; and
  2. “Package” means a pack, carton, or container of any kind in which cigarettes are offered for sale, sold, or otherwise distributed or intended for distribution to consumers.
3. Tax Stamps.
  1. No tax stamp may be affixed to or made upon any package of cigarettes if:
    1. The package differs in any respect with the requirements of the Federal Cigarette Labeling and Advertising Act, 15 U.S.C. § 1331 et seq., for the placement of labels, warnings, or any other information upon a package of cigarettes that is manufactured, packaged, or imported for sale, distribution, or use within the United States;
    2. The package is labeled “For Export Only”, “U.S. Tax Exempt”, “For Use Outside U.S.”, or similar wording indicating that the manufacturer did not intend that the product be sold in the United States;
    3. The cigarettes in the package do not comply with any other applicable requirements imposed pursuant to federal law and federal implementing regulations;
    4. The package in any way violates federal trademark or copyright laws;
    5. The package or a package containing individually stamped packages has been altered by adding or deleting the wording, labels, or warnings described in this subdivision (c)(1); or
    6. With respect to the cigarettes, any person is not in compliance with 15 U.S.C. § 1335a relating to submission of ingredient information to federal authorities, 19 U.S.C. §§ 1681 — 1681b relating to imports of certain cigarettes, 26 U.S.C. § 5754, relating to previously exported tobacco products, or any other federal law or implementing federal regulations.
  2. Any person who sells or holds for sale cigarette packages to which is affixed a tax stamp in violation of this section shall be subject to the penalties prescribed in subdivision (c)(5) of this section.
  3. The Arkansas Tobacco Control Board may revoke a wholesale or retail license of any person who sells or holds for sale cigarette packages to which is affixed a tax stamp in violation of this section.
  4. The Department of Finance and Administration or the Director of Arkansas Tobacco Control may seize and destroy or sell to the manufacturer only for export packages that do not comply with this section.
  5. A violation of this section is a deceptive act or practice and shall constitute a Class A misdemeanor.
  6. On or before the fifteenth business day of each month, each person licensed to affix the state tax stamp to cigarettes shall file with the Secretary of the Department of Finance and Administration for all cigarettes imported into the United States to which the person has affixed the tax stamp in the preceding month copies of the customs certificates with respect to the cigarettes required to be submitted by 19 U.S.C. § 1681a(c).
  7. Any person who sells, distributes, or manufactures cigarettes and sustains direct economic or commercial injury as a result of a violation of this section may bring an action in good faith for appropriate injunctive relief.
1. 1. It is unlawful for a person to sell cigarettes or cigarette inputs to, or purchase cigarettes from, a person in another state if the sale or purchase would violate the law of the other state.
  2. A cigarette input sold, possessed, transported, caused to be transported, or purchased in violation of this section is contraband and is subject to seizure and forfeiture to the state.
2. 1. A person licensed, permitted, appointed, or commissioned under this subchapter and a person that directly or indirectly controls a person licensed, permitted, appointed, or commissioned under this subchapter shall not possess or otherwise utilize a cigarette rolling machine.
  2. A person that knowingly violates subdivision (b)(1) of this section shall be subject to the following civil penalties:
    1. The revocation or termination of any license, permit, appointment, or commission under this subchapter; and
    2. 1. A civil penalty of up to fifty thousand dollars ($50,000) in any action brought by the Secretary of the Department of Finance and Administration, the Director of Arkansas Tobacco Control, or the Attorney General.
      2. Civil penalties collected under this subdivision (b)(2)(B) shall be general revenues of the state.
  3. A person that violates subdivision (b)(1) of this section shall also be guilty of a criminal offense that is:
    1. A Class C felony if the tax value of any cigarettes produced by means of the cigarette rolling machine is one hundred dollars ($100) or more; or
    2. A Class A misdemeanor if the tax value of any cigarettes produced by means of the cigarette rolling machine is less than one hundred dollars ($100).
  4. 1. This subsection does not apply to cigarette rolling machines intended and designed for use by individual consumers who do not intend to offer the resulting product for resale.
    2. A cigarette rolling machine that has the capability to roll two hundred (200) cigarettes in less than fifteen (15) minutes is presumed to be for commercial use.
1. Upon request of the Attorney General, any information provided to the Secretary of the Department of Finance and Administration or the Director of Arkansas Tobacco Control shall be provided to the Attorney General.
2. The Attorney General may enforce § 26-57-245(b) and §§ 26-57-248 and 26-57-250 by filing a civil action in the Pulaski County Circuit Court.
1. Each wholesaler shall file with the Director of Arkansas Tobacco Control a monthly report of the wholesaler's deliveries to retailers and other wholesalers in this state and the wholesaler's deliveries from within this state to retailers and other wholesalers outside of this state.
2. The report required under subsection (a) of this section shall contain the following information for the preceding calendar month's deliveries:
  1. The name of each retailer or wholesaler;
  2. The address of each retailer or wholesaler to which the wholesaler delivered tobacco products, vapor products, alternative nicotine products, or e-liquid products;
  3. The address of each retailer or wholesaler that obtained tobacco products, vapor products, alternative nicotine products, or e-liquid products from the wholesaler at the wholesaler's location;
  4. The Arkansas permit number of each retailer or wholesaler or the equivalent permit number if the retailer or wholesaler resides outside of the state; and
  5. The monthly net deliveries made to each retailer or wholesaler, including without limitation:
    1. The quantity, units, and brand styles of the cigarettes in stamped and unstamped packages that were delivered to each retailer or wholesaler;
    2. The quantity, units, and brand styles of the tobacco products delivered to the retailer or wholesaler; and
    3. The quantity, units, and brand styles of the vapor products, alternative nicotine products, and e-liquid products delivered to the retailer or wholesaler.
3. A wholesaler shall file the report required under subsection (a) of this section on or before the tenth day of each month.
4. 1. Except as provided under this section, a wholesaler shall electronically file the report required under subsection (a) of this section with the director.
  2. The director may establish procedures for allowing an alternative method of filing for a wholesaler that demonstrates to the director that it is not reasonably feasible to comply with the primary electronic reporting method adopted.
  3. If the director determines that another method of filing the report is more efficient than electronic filing, the director may promulgate rules requiring the use of another method by wholesalers.
5. 1. 1. Except for information that has been submitted as evidence in a concluded investigation resulting in an administrative violation or criminal charge, information contained in a report required to be filed under this section is confidential and not subject to release.
    2. Before information contained in a report required to be filed under this section is disclosed or transmitted in a manner in which the information may become available to the public or a competitor of the reporting wholesaler, including in an administrative violation or criminal charge, the director shall provide sufficient advance notice to the reporting wholesaler to allow the reporting wholesaler to seek an order protecting any confidentially sensitive information.
  2. 1. Information contained in a report required to be filed under this section may be transmitted or otherwise provided to:
      1. The appropriate taxing authority in a state to which deliveries shown on the report were made;
      2. A requesting law enforcement agency; and
      3. The Attorney General.
    2. The person or entity receiving information under subdivision (e)(2)(A) of this section shall agree to maintain the confidentiality of the information before the information may be transmitted to the person or entity.
    3. Information provided to a taxing authority or law enforcement agency under subdivision (e)(2)(A) of this section shall remain confidential and not subject to release.
6. The director may promulgate rules to implement this section.
7. The report required to be filed under this section shall fulfill the reporting required to the state under the Prevent All Cigarette Trafficking Act of 2009, Pub. L. No. 111-154.
8. 1. The director shall provide the information reported under this section to the Attorney General.
  2. The director's action under subdivision (h)(1) of this section satisfies the wholesaler's reporting obligations under § 26-57-1406.
1. Arkansas Tobacco Control is designated as a law enforcement agency.
2. The Director of Arkansas Tobacco Control shall assign personnel as agents of Arkansas Tobacco Control to conduct investigations of violations of tobacco laws in this state.
3. Personnel assigned as agents of Arkansas Tobacco Control shall:
  1. Be considered fulltime law enforcement officers by the Arkansas Commission on Law Enforcement Standards and Training under § 12-9-101 et seq.; and
  2. Have statewide law enforcement authority.
1. Nothing contained in this section and §§ 26-57-401, 26-57-402, and 26-57-404 — 26-57-407 shall be deemed to legalize, authorize, license, or permit any machine commonly known as a slot machine, roscoe, or jackpot, or any machine equipped with any automatic money payoff mechanism.
2. Any person owning or possessing an amusement device described in § 26-57-402 or any person employed by or acting on behalf of the person, who gives to any other person money for a noncash prize, toy, or novelty received as a reward in playing the amusement device or for free games won on the amusement device shall be guilty of a Class A misdemeanor.
1. On each amusement device there shall be imposed an annual privilege tax of five dollars ($5.00).
2. The Secretary of the Department of Finance and Administration shall collect for each amusement device the full annual license fee when paid during the first six (6) months of the fiscal year, but any license fee paid during the last six (6) months of the fiscal year shall be upon the basis of one-half (½) of the annual tax.
1. Upon payment of the tax provided for in § 26-57-404, the Secretary of the Department of Finance and Administration will issue a license tag.
2. The license tag shall:
  1. State the period of time the amusement device may be operated; and
  2. Be attached to the amusement device before placing it in operation.
1. All revenue collected under this section and §§ 26-57-401 — 26-57-406 shall be deposited into the State Treasury.
2. The first thirty thousand dollars ($30,000) annually collected shall be placed to the credit of the Public School Fund, and all moneys over thirty thousand dollars ($30,000) annually collected shall be placed to the credit of the State Board of Health for rural health work.
1. The business of owning, operating, or leasing coin-operated amusement devices, including, but not limited to, the coin-operated amusement devices defined in § 26-57-402, is declared to be a privilege.
2. It is further declared that the owners, operators, and lessors of coin-operated amusement devices shall pay a fee for the privilege of owning, operating, or leasing coin-operated amusement devices in addition to the privilege tax required by § 26-57-404 to be paid on amusement devices.
1. The annual fee for the license provided for in § 26-57-412 shall:
  1. For all licensees operating not more than three (3) amusement devices, be the sum of five hundred dollars ($500); and
  2. For all licensees operating more than three (3) amusement devices, be the sum of one thousand dollars ($1,000).
2. However, those who restrict the placement of coin-operated amusement devices exclusively to carnivals and county, district, and state fairs shall pay a monthly license fee as follows:
  1. Licensees operating not more than three (3) amusement devices, the sum of seventy-five dollars ($75.00) a month; and
  2. Licensees operating more than three (3) amusement devices, the sum of one hundred fifty dollars ($150) a month.
3. Any licensee who operates amusement devices for more than three (3) months in any one (1) calendar year is required to pay the annual fee for a license.
4. However, the residency requirements in § 26-57-410 do not apply to those applicants whose placement of coin-operated amusement devices is limited exclusively to carnivals and county, district, and state fairs. The license is valid for a maximum of three (3) months and may not be renewed, extended, or reissued. No more than one (1) license may be issued in one (1) calendar year.
5. 1. Annual fees shall be paid on a fiscal-year basis beginning July 1 of each year. Licenses issued subsequent to July 1 shall be paid for as though they were for a full year.
  2. However, licensees who restrict the operation of amusement devices to carnivals and county, district, and state fairs shall pay their license fee at least thirty (30) days prior to the opening of any carnival or county, district, or state fair in which they will be operating amusement devices.
1. No license as required in § 26-57-412 shall be issued unless:
  1. The applicant is twenty-one (21) years of age or more;
  2. The applicant is a resident of the State of Arkansas and has been such continuously for at least one (1) year prior to the date of his or her application; and
  3. At least one-half (½) of any partnership or corporation applicant is owned by a resident of Arkansas who has been such continuously for at least one (1) year prior to the application and which resident shall be the party accountable for the collection and reporting of all state taxes and compliance with this subchapter.
2. No license as provided for in § 26-57-412 shall be issued to:
  1. Any convicted felon;
  2. Any person of known criminal tendencies; or
  3. A former licensee whose license has been revoked until two (2) years subsequent to the date of the revocation.
1. Prior to the issuance or renewal of any license under this subchapter, the Secretary of the Department of Finance and Administration shall require the applicant to procure a suitable surety bond in the principal sum of six thousand dollars ($6,000) to insure the faithful and prompt payment of all sales taxes, use taxes, or privilege taxes which may become due in connection with the operation of the licensed business and to secure the faithful performance of all duties and obligations imposed by this subchapter.
2. No surety bond is required prior to the issuance of a license under this subchapter to an applicant who restricts the placement of amusement devices to carnivals and county, district, and state fairs for a period not exceeding three (3) months in any one (1) calendar year.
1. Licenses for the privilege of owning, operating, or leasing coin-operated amusement devices shall be issued by the Secretary of the Department of Finance and Administration.
2. Applications for the licenses shall be on a form prescribed by the secretary.
3. At the time of the issuance of the licenses, each licensee shall be assigned a number.
1. The Secretary of the Department of Finance and Administration may revoke or suspend the license authorized under this subchapter for cause.
2. Any person, partnership, limited liability company, or corporation that is a licensee under this subchapter shall be notified in writing that the revocation or suspension of its license is being considered and the reason therefor.
3. The licensee shall have fifteen (15) days in which to notify the secretary that a hearing is desired, after which time a hearing shall be had not less than fifteen (15) days subsequent to the expiration of the fifteen-day period of notice.
4. 1. Any licensee whose license has been revoked or suspended may appeal to the Pulaski County Circuit Court within twenty (20) days after revocation or suspension by filing a copy of the notice of the revocation or suspension with the clerk of the circuit court and causing a summons to be served on the secretary.
  2. The case shall be tried de novo in the circuit court.
  3. Either party may prosecute an appeal to the Supreme Court as in other cases.
1. Any person who engages in the business of owning, operating, or leasing coin-operated amusement devices without first obtaining the license prescribed in § 26-57-412 is declared to be maintaining a public nuisance.
2. 1. A coin-operated amusement device owned, operated, or leased without first obtaining the license prescribed in § 26-57-412 shall be seized by an authorized agent of the Revenue Division of the Department of Finance and Administration and sold by the Secretary of the Department of Finance and Administration at public auction on an order of the Pulaski County Circuit Court.
  2. However, a coin-operated amusement device seized under subdivision (b)(1) of this section may be redeemed before sale by the owner of the coin-operated amusement device upon the payment of:
    1. All sales or use taxes due on the coin-operated amusement device;
    2. The sales tax on the receipt of the wrongfully operated coin-operated amusement device;
    3. All costs and expenses incurred in connection with the seizure and obtaining the order of the court; and
    4. A penalty of one thousand dollars ($1,000).
3. If the offender applies for a license as provided in this subchapter within thirty (30) days subsequent to the payment of the penalty, five hundred dollars ($500) of the penalty shall be allowed as the first annual license fee in the event the license is granted.
1. All licensees under this subchapter within ten (10) days of the date of purchase or lease of any amusement device upon which an annual privilege tax is levied by the state shall furnish the Secretary of the Department of Finance and Administration with a copy of the invoice or lease agreement, showing the description and serial number of the amusement device and evidence that the Arkansas sales tax has been paid.
2. In the event that the amusement device was purchased or leased from outside the state, the invoice or lease agreement shall be accompanied by the appropriate form and a check or money order for the state compensating tax.
1. In all cases in which a licensee under this subchapter leases amusement devices to others, it shall be the duty of the licensee to keep records of the amount of rent received by the licensee and the amount retained by the lessee and to furnish carbon copies of the records to the lessee.
2. 1. A licensee shall ascertain the amount of sales tax due on the receipts of the amusement device and withhold the amount of the sales tax due from the receipts and remit the sales tax due to the Revenue Division of the Department of Finance and Administration.
  2. The amount of sales tax shall not be taken into consideration in determining the rent due the licensee.
3. All records required to be kept by the licensee under the provision of this subchapter shall be made available to the Secretary of the Department of Finance and Administration within a reasonable time after request or the license of the offending licensee may be revoked as provided in this subchapter.
1. In addition to the tax stamp which must be displayed on each amusement device as required under other statutes, each licensee under this subchapter shall procure and exhibit on each amusement device owned or operated under the license a decal or card showing the number of the license under which the amusement device is operated.
2. 1. Any coin-operated amusement device exhibited without the decal or card showing the number of the license as required in subsection (a) of this section is declared to be the maintenance of a public nuisance, and the amusement device may be seized as provided in § 26-57-414.
  2. However, if the owner of the coin-operated amusement device is a licensed operator under this subchapter, the owner may redeem the coin-operated amusement device upon the payment of a penalty of ten dollars ($10.00).
1. Licenses to sell coin-operated amusement devices shall be issued by the Secretary of the Department of Finance and Administration.
2. Applications for the licenses shall be on a form prescribed by the secretary.
3. 1. No license shall be issued to any corporation which is owned in whole or in part by any convicted felon or person who formerly held a license which was revoked until two (2) years subsequent to the revocation.
  2. The same restriction shall hold true on members of partnerships or individuals applying for licenses.
  3. Salespersons employed by licensees shall in like manner be subject to the restrictions.
4. Any person, firm, partnership, limited liability company, or corporation who applies for a license to sell coin-operated amusement devices as provided in this section prior to the issuance of the license shall be required to procure a suitable surety bond in the principal sum of one thousand dollars ($1,000) to ensure compliance with the provisions of this subchapter and to provide indemnity to any person who deals with the applicant in the event of the violation of this subchapter.
5. The annual fee for each corporation, partnership, or individual which acquires a license to sell coin-operated amusement devices shall be twenty-five dollars ($25.00), and additional annual licenses for salespersons employed by the licensees may be acquired for five dollars ($5.00).
6. 1. The secretary may revoke or suspend the licenses for cause.
  2. Any licensee shall be notified in writing that the revocation or suspension of its license is being considered and the reason therefor.
  3. The licensee shall have fifteen (15) days in which to notify the secretary that a hearing is desired, after which time a hearing shall be held not less than fifteen (15) days subsequent to the expiration of the fifteen-day period of notice.
  4. 1. Any licensee whose license has been revoked or suspended may appeal to the Pulaski County Circuit Court by filing a copy of the notice of revocation or suspension with the clerk of the court within twenty (20) days of receipt thereof and causing the issuance of a summons to be served on the secretary. The hearing shall be de novo in the Pulaski County Circuit Court.
    2. Either party may appeal to the Supreme Court as in other cases.
1. 1. Before a sale of any coin-operated amusement device is concluded, the licensee or his or her salesperson shall notify the purchaser that the operation of the coin-operated amusement device is subject to taxation under this subchapter.
  2. All receipts, invoices, bills of sale, or other documents must contain thereon a notice citing the applicable sections of the law and warning the purchaser of the applicable tax.
2. 1. Any sale which is made without notifying the purchaser of the existence of the aforementioned applicable sections of the law or when the documents executed in connection with the sale do not cite the appropriate statutes and warn of applicable tax shall be void, and the purchaser may at his or her option cancel the sale, whereupon the licensee shall immediately rebate the purchase price or the deposit made by the purchaser.
  2. The failure of the licensee to rebate the funds after demand by the purchaser shall entitle the purchaser to file suit against the bond of the licensee which is required by § 26-57-419(d), and the license of the licensee shall be revoked if the purchaser obtains a judgment against the bondsman.
1. Any person, firm, partnership, limited liability company, or corporation in this state who shall enter into or conduct such a business as is described in § 26-57-502 immediately upon engaging in or commencing the business shall notify the Secretary of the Department of Finance and Administration by letter of that fact, setting forth the date of commencement and stating his or her intention to abide by all the provisions of this subchapter.
2. The notice shall be filed by the secretary in such manner as will enable the secretary to properly inspect and record the latter compliance of the person with the provisions of this subchapter.
1. Each authorized, each formerly authorized, and each unauthorized insurer as defined in § 23-60-102(12) shall file with the Insurance Commissioner on or before March 1 of each year a report in form as prescribed by the commissioner showing, except as to wet marine and foreign trade insurance as defined in § 26-57-605(d), total direct premium income including policy, membership, and other fees, and all other considerations for insurance, from all kinds and classes of insurance, whether designated as premium or otherwise, written by it during the preceding calendar year on account of policies and contracts covering property, subjects, or risks located, resident, or to be performed in this state, with proper proportionate allocation of premium as to the persons, property, subjects, or risks in this state insured under policies or contracts covering persons, property, subjects, or risks located or resident in more than one (1) state, after deducting from the total direct premium income dividends and similar returns paid or credited to policyholders other than as to life insurance, applicable cancellations, returned premiums, the unabsorbed portion of any deposit premium, and the amount of reduction in, or refund of, premiums allowed to industrial life policyholders for payment of premiums directly to an office of the insurer.
2. No deduction shall be made of the cash surrender values of policies.
3. Considerations received on annuity contracts shall not be included in total direct premium income and shall not be subject to tax.
4. Each authorized, unauthorized, or formerly authorized domestic, foreign, and alien insurer shall pay to the Treasurer of State through the commissioner, as a tax imposed for the privilege of transacting business in this state, a tax upon the net premiums and net considerations, except as provided in § 26-57-605. The tax shall be computed thereon at a rate of two and one-half percent (2½%). The premiums written shall be reported at such times and in such form and context as prescribed by the commissioner, and the taxes shall be paid on a quarterly estimate basis as prescribed by the commissioner and shall be reconciled annually at the time of filing the annual report required in subsections (a)-(c) of this section.
5. That portion of the tax paid by an insurer in accordance with § 24-11-809 shall be separately specified in the report in such manner as may be prescribed by the commissioner to enable the commissioner to make a proper apportionment of the funds.
6. 1. A risk-based provider organization that is licensed under the Medicaid Provider-Led Organized Care Act, § 20-77-2701 et seq., and § 23-61-117 and participates in the Medicaid provider-led organized care system offered by the Arkansas Medicaid Program for enrollable Medicaid beneficiary populations as defined in § 20-77-2703 shall pay to the Treasurer of State through the commissioner a tax imposed for the privilege of transacting business in this state.
  2. The tax shall be computed at a rate of two and one-half percent (2½%) on the total amount of funds received in global payments as defined under § 20-77-2703 to a risk-based provider organization participating in the Medicaid provider-led organized care system.
  3. The tax shall be:
    1. Reported at such times and in such form and context as prescribed by the commissioner; and
    2. Paid on a quarterly basis as prescribed by the commissioner.
1. 1. 1. Coincident with the filing of the tax report, each authorized life or accident and health insurer, including licensed health maintenance organizations, may apply for a credit for the noncommissioned salaries and wages of the insurer's Arkansas employees that are paid in connection with its insurance operations.
    2. 1. The credit may be applied as an offset against the premium tax imposed in § 26-57-603(d) on life and accident and health insurance.
      2. However, the credit shall not be applied as an offset against the premium tax on collections resulting from an eligible individual insured under the Health Care Independence Act of 2013, § 20-77-2401 et seq. [repealed], the Arkansas Works Act of 2016, § 23-61-1001 et seq., the Arkansas Health Insurance Marketplace Act, § 23-61-801 et seq., or individual qualified health insurance plans, including without limitation stand-alone dental plans, issued through the health insurance marketplace as defined by § 23-61-1003.
      3. The credit shall not be applied as an offset against the premium tax on collections resulting from an eligible individual insured under the Arkansas Medicaid Program as administered by a risk-based provider organization.
  2. 1. The offset shall not reduce the accident and health premium tax due by more than the following amounts:
      1. For tax years beginning before January 1, 2021, eighty percent (80%);
      2. For the tax year beginning January 1, 2021, seventy percent (70%);
      3. For the tax year beginning January 1, 2022, sixty percent (60%); and
      4. For tax years beginning on and after January 1, 2023, fifty percent (50%).
    2. Beginning January 1, 2020, an authorized accident or health insurer shall not receive a credit under this subsection that exceeds an annual total of eighteen million dollars ($18,000,000).
    3. The offset shall not reduce the life premium tax due by more than seventy percent (70%).
    4. The taxes shall be reported and paid on a quarterly estimated basis as prescribed by the Insurance Commissioner and shall be reconciled annually at the time of filing the annual report required in § 26-57-603(a)-(c).
  3. An employee shall be employed for six (6) months for the salary or wages to be eligible to qualify for the life or accident and health premium tax credit.
  4. 1. 1. Except as provided in subdivision (a)(4)(B) of this section, on or before March 1 of each year, any such authorized life or accident and health insurer, including health maintenance organizations, desiring to qualify under this provision shall furnish the appropriate data and request on forms prescribed by the commissioner.
      2. For purposes of calculating the taxes under §§ 23-63-102 — 23-63-104, an insurer qualifying for a credit under this section shall compute the tax due under §§ 23-63-102 — 23-63-104, if any, by using an Arkansas premium tax rate of two and one-half percent (2½%).
    2. 1. Subdivision (a)(4)(A) of this section shall only apply for tax years beginning prior to January 1, 2000.
      2. By March 1 of each year, an authorized life or accident and health insurer, including health maintenance organizations, desiring to qualify under this provision shall furnish the appropriate data and request on forms prescribed by the commissioner.
      3. However, for purposes of calculating the taxes under §§ 23-63-102 — 23-63-104, an insurer qualifying for a credit under this section shall compute the tax due under §§ 23-63-102 — 23-63-104, if any, by using an Arkansas premium tax rate of two and one-half percent (2½%) without regard to the credit specified in this section.
2. 1. Each insurer other than those in § 26-57-603(d) and subsection (a) of this section shall pay to the Treasurer of State through the commissioner, as a tax imposed for the privilege of transacting business in this state, a tax at the rate of two and one-half percent (2½%) upon the net premiums and net considerations on all kinds of insurance, except as provided in § 26-57-605.
  2. The taxes shall be paid on a quarterly estimate basis as prescribed by the commissioner and shall be reconciled annually at the time of filing the annual report required in § 26-57-603(a)-(c).
3. 1. In addition to any premium tax credit not related to the same eligible property for which an insurer qualifies under subsection (a) of this section, there is allowed a premium tax credit for the amount of the Arkansas historic rehabilitation income tax credit allowed by the certification of completion issued by the Division of Arkansas Heritage under the Arkansas Historic Rehabilitation Income Tax Credit Act, § 26-51-2201 et seq.
  2. The premium tax credit under this subsection may be used to offset the premium tax imposed by §§ 26-57-603 — 26-57-605.
  3. The amount of the premium tax credit under this section that may be claimed by the taxpayer in a tax year shall not exceed the amount of premium tax due by the taxpayer.
  4. Any unused premium tax credit may be carried forward for a maximum of five (5) consecutive taxable years for credit against the premium tax.
  5. The commissioner shall promulgate rules to implement this section.
1. As to wet marine and foreign trade insurance written in this state during the preceding calendar year, on or before March 1 of each year, each authorized, unauthorized, or formerly authorized insurer shall file its report with the Insurance Commissioner, on forms as prescribed by the commissioner of its gross underwriting profit thereon.
2. As a tax imposed for the privilege of transacting such wet marine and foreign trade insurance in this state, a tax of three-quarters of one percent (¾%) of the gross underwriting profit shall be reported and paid on a quarterly estimate basis at such times and upon forms as shall be prescribed by the commissioner and reconciled annually at the time of filing the annual report.
3. 1. The gross underwriting profit shall be ascertained by deducting from the net premiums, which are the gross premiums less all return premiums and premiums for reinsurance, on wet marine and foreign trade insurance contracts, the net losses paid, which are the gross losses paid less salvage and recoveries on reinsurance ceded, during the calendar year under those contracts.
  2. In the case of insurers issuing participating contracts, the gross underwriting profit shall not include for computation of the tax prescribed by this section the amounts refunded or paid as participation dividends by the insurers to the holders of the contracts.
4. As used in this subchapter, “wet marine and foreign trade insurance” includes only:
  1. Insurances upon vessels, crafts, hulls, and of interests therein, of, or with relations thereto;
  2. Insurance of marine builder's risks, marine war risks, and contracts of marine protection and indemnity insurance;
  3. Insurance of freights and disbursements pertaining to a subject of insurance coming within this definition; and
  4. Insurance of personal property and interests therein, in course of exportation from or importation into any country, or in course of transportation, and while being prepared for and while awaiting shipment, and during any delays, storage, trans-shipment, or reshipment incident thereto.
1. The Insurance Commissioner in his or her discretion may suspend or revoke the certificate of authority of any insurer or health maintenance organization that fails to report and pay the premium tax levied under §§ 26-57-604 and 26-57-605 on the date due or during any reasonable extension of time which may have been expressly granted by the commissioner for good cause upon the insurer's request.
2. In addition, any insurer or health maintenance organization that fails to report or pay the tax when due shall be subject to a penalty of one hundred dollars ($100) for each day of the delinquency. The penalty shall be collected by the commissioner if necessary by a civil suit therefor brought by the commissioner in the Pulaski County Circuit Court, unless the penalty is waived by the commissioner upon a showing by the insurer or organization of good cause for its failure to file its report or tax payment on or before the date due.
1. The Insurance Commissioner shall deposit all taxes collected under §§ 26-57-604 and 26-57-605 into the State Treasury.
2. On the last business day of each month the Treasurer of State shall classify the taxes by type of revenue and credit the net amounts respectively of taxes collected under §§ 26-57-604 and 26-57-605 as follows:
  1. The taxes based on premiums collected as special revenues shall be distributed to the respective cities, incorporated towns, and fire protection districts in this state for credit to the respective firemen's relief and pension funds;
  2. The taxes based on premiums collected under the Health Care Independence Act of 2013, § 20-77-2401 et seq. [repealed], the Arkansas Works Act of 2016, § 23-61-1001 et seq., the Arkansas Health Insurance Marketplace Act, § 23-61-801 et seq., or individual qualified health insurance plans, including without limitation stand-alone dental plans, issued through the health insurance marketplace as defined by § 23-61-1003 shall be:
    1. At the time of deposit, separately certified by the commissioner to the Treasurer of State for classification and distribution under this section; and
    2. Transferred to the Arkansas Works Program Trust Fund and used as required by the Arkansas Works Program Trust Fund;
  3. Except as provided in subdivision (b)(4) of this section [repealed], all other taxes collected under §§ 26-57-604 and 26-57-605 shall be classified as general revenues, and the net amount of taxes collected under §§ 26-57-604 and 26-57-605 shall be credited to the various State Treasury funds participating in general revenues in the respective proportions to each as provided by and to be used for the respective purposes set forth in the Revenue Stabilization Law, § 19-5-101 et seq.; and
  4. The taxes based on premiums collected under the Arkansas Medicaid Program as administered by a risk-based provider organization shall be:
    1. At the time of deposit, separately certified by the commissioner to the Treasurer of State for classification and distribution under this section;
    2. 1. Transferred in amounts not less than fifty percent (50%) of the taxes based on premiums collected under the Arkansas Medicaid Program as administered by a risk-based provider organization to the designated account created by § 20-48-1004 within the Arkansas Medicaid Program Trust Fund to solely provide funding for home and community-based services to individuals with intellectual and developmental disabilities until the Department of Human Services certifies to the Department of Finance and Administration that the waiting list for the Alternative Community Services Waiver Program, also known as the “Developmental Disabilities Waiver”, is eliminated.
      2. On and after the certification as described in subdivision (b)(4)(B)(i) of this section, all amounts of the taxes based on premiums collected under the Arkansas Medicaid Program as administered by a risk-based provider organization shall be transferred as described in subdivision (b)(4)(C) of this section; and
    3. On and after the certification as described in subdivision (b)(4)(A) of this section and after the transfer under subdivision (b)(4)(B)(i) of this section, transferred in the remainder to the Arkansas Medicaid Program Trust Fund and used as provided by § 19-5-985 as well as being used to provide funding for:
      1. The quality incentive pool under the Medicaid Provider-Led Organized Care Act, § 20-77-2701 et seq.;
      2. Home and community-based services for individuals with behavioral health needs and intellectual and developmental disabilities; and
      3. Other services covered by the Arkansas Medicaid Program as determined by the Department of Human Services.
1. 1. It is found and determined by the General Assembly that additional funding is needed to improve the fire protection services in this state.
  2. It is further found and determined that the public policy of this state is to provide adequate fire protection services for property of citizens through the use of properly trained and equipped firefighters, and that the provisions of this section and §§ 14-284-401 — 14-284-409 are necessary in furtherance of the public health and safety.
2. In addition to the premium taxes collected from insurers under other provisions of Arkansas law, each authorized insurer and each formerly authorized insurer shall pay to the Fire Protection Premium Tax Fund a tax at the rate of one-half of one percent (½%) on net direct written premiums for coverages upon real and personal property, including, but not limited to, fire, allied lines, farm owner and homeowner multiple peril, vehicle physical damage, and vehicle collision, or any combination thereof.
3. This tax shall be collected by the Insurance Commissioner from the insurers at the same time and in the same manner as provided in the premium tax sections of the laws of this state under this subchapter and deposited into the fund.
4. An assessment upon which this premium tax is based shall be made on forms prescribed by the commissioner.
5. 1. A premium tax payment shall be made upon a company check payable to the fund.
  2. If the cumulative premium tax payment is less than twenty-five dollars ($25.00), then the insurer may defer payment to the following quarter or quarters of the current calendar year but shall pay the tax no later than March 1 of the following year.
6. The provisions of this section and § 14-284-401 et seq. are intended to be supplemental to current provisions of Arkansas law, and shall not be construed as repealing or superseding any other laws applicable thereto.
1. If, by the laws of any state other than Arkansas or by the retaliatory laws of any state other than Arkansas, any insurer domiciled in Arkansas on or after April 6, 1993, shall be required to pay any fee based on the insurer's premium volume in the other state of licensure, and the fee imposed by the other state is due and payable either because the administrative and financial regulatory fee, “financial fee”, based on premium volume assessed by the State Insurance Department Trust Fund Act, § 23-61-701 et seq., as it is popularly known, on insurers licensed in Arkansas and organized or domiciled in the other state is greater than the comparable fee assessed in the other state, or the other state has no comparable fee but requires payment on a retaliatory basis, then to the extent the fee amounts are legally due and are paid in the other state, any insurer domiciled in Arkansas on and after April 6, 1993, may claim a dollar-for-dollar credit for the fees paid against its annual premium taxes due the State of Arkansas under this subchapter, but the credit shall only be calculated on the amount which would not have been required to be paid in the other state of licensure in the absence of the existence of the financial fee assessed under the State Insurance Department Trust Fund Act, § 23-61-701 et seq., and in no event shall the credit permitted by this section exceed ninety percent (90%) of the insurer's annual premium tax due the State of Arkansas.
2. 1. Credits permitted in subsection (a) of this section shall be reported annually on March 1.
  2. The Insurance Commissioner shall prescribe the forms for reporting the credits and further shall examine insurer claims for credit made under this section.
  3. If the commissioner shall determine that any amount for which a credit shall have been claimed was not legally due to another state, or that an error exists in the amount of the credit shown on the return, or the amount claimed is a refund or refunded, the commissioner shall take appropriate action under any and all civil and administrative Arkansas laws at the commissioner's disposal, including suspension or revocation of the Arkansas certificate of authority of the noncomplying insurer, for collection and recovery of the premium tax due resulting from the disallowance of a claim for credit made under this section or to disallow any the claim for refund.
1. No assessment of any insurance premium tax levied under §§ 11-9-301 — 11-9-307, 23-75-119, 23-76-131, or this subchapter shall be made after the expiration of five (5) years from the date the tax report was required to be filed or the date the tax report was filed, whichever period expires later.
2. No amended tax report or verified claim for credit or refund of an overpayment of any insurance premium tax collected under §§ 11-9-301 — 11-9-307, 23-75-119, 23-76-131, or this subchapter shall be filed after five (5) years from the date the tax report was required to be filed or the date the tax report was filed, whichever period expires later, nor shall any credit, overpayment, or previously unclaimed offset, deduction, or other reduction be paid or allowed.
3. All usual and customary records used in the preparation of a tax report shall be maintained for a period of five (5) years after the tax report was required to be filed or was filed, whichever period expires later.
1. Every person required by the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., to pay the excise tax on tobacco products and every other person selling cigarette paper at wholesale within this state shall also pay an excise tax on the sale of cigarette paper.
2. The tax shall be in the amount of twenty-five cents (25¢) per package of approximately thirty-two (32) sheets.
3. The tax shall be remitted to the Secretary of the Department of Finance and Administration at the same time and in the same manner as prescribed by the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
4. The secretary shall promulgate such rules as the secretary deems necessary for the implementation of this section.
1. In addition to any other taxes levied on cigarettes, there is levied a tax of fifty cents (50¢) per one thousand (1,000) cigarettes sold in the state.
2. The additional tax levied in this section shall be reported and remitted in the same manner and at the same time as other taxes levied on cigarettes in the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
3. 1. The first three million dollars ($3,000,000) of the net revenues derived from the additional tax levied in this section shall be deposited into the State Treasury to the credit of the Aging and Adult Services Fund Account, to be used exclusively for transportation services benefitting the elderly, including the Meals on Wheels Program and the remainder shall be deposited into the State Treasury as general revenues.
  2. As used in this subsection and pertaining to taxes levied on cigarettes, “the first three million dollars ($3,000,000) of the net revenues derived from the additional tax” means the first three million dollars ($3,000,000) each year of the net revenues derived from the additional tax.
4. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of an untaxed tobacco product or unstamped cigarettes.
1. In addition to the excise or privilege taxes levied under §§ 26-57-208 and 26-57-802, there is levied a tax of four dollars and seventy-five cents ($4.75) per one thousand (1,000) cigarettes sold in the state.
2. 1. In addition to other taxes imposed by law, there is levied an additional excise or privilege tax on the first sale of tobacco products other than cigarettes at the rate of seven percent (7%) of the invoice price, before discounts.
  2. However, the excise or privilege tax levied under subdivision (b)(1) of this section is subject to the limitation stated in § 26-57-208(2)(B).
  3. As used in this subsection, “invoice price” means the same as defined in § 26-57-203.
3. 1. 1. The taxes levied by this section shall be reported and paid by wholesalers that shall be licensed under § 26-57-214.
    2. However, unless a retailer has confirmed and establishes by clear and convincing evidence that the tax levied under this section has been paid previously on the tobacco products, the retailer is liable for reporting and paying these taxes when the retailer obtains tobacco products from a person other than a wholesaler licensed under § 26-57-214.
  2. 1. A taxpayer that fails to report and remit the tobacco tax due on tobacco products obtained from any person other than a wholesaler that is licensed under § 26-57-214 shall be subject to the following penalties:
      1. Five percent (5%) of the total tobacco tax due for the first offense;
      2. Twenty percent (20%) of the total tobacco tax due for the second offense; and
      3. Twenty-five percent (25%) of the total tobacco tax due for the third and any subsequent offenses.
    2. In addition, the taxpayer's retail cigarette/tobacco permit shall be revoked for a period of ninety (90) days for the third and any subsequent offenses.
  3. This subsection does not affect the provisions of § 26-57-228.
4. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of an untaxed tobacco product or unstamped cigarettes.
1. In addition to the excise or privilege taxes levied under §§ 26-57-208, 26-57-802, 26-57-803, and 26-57-1101, there is levied an additional tax of twelve dollars and fifty cents ($12.50) per one thousand (1,000) cigarettes sold in the state.
2. The exemptions and waivers allowed under §§ 26-57-209 and 26-57-210 [repealed] shall apply to this section.
3. The additional tax levied under this section shall be imposed, reported, remitted, and administered in the same manner and at the same time as other taxes levied on cigarettes in the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
4. The Secretary of the Department of Finance and Administration shall pay the commission authorized by § 26-57-236 with respect to the tax levied by this section.
5. The revenue derived from the additional tax imposed by this section shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections.
6. As provided in § 26-57-244, the secretary may make a direct assessment of excise tax against any person in possession of unstamped cigarettes.
1. 1. In addition to other taxes imposed by law, there is levied an additional excise or privilege tax on the first sale of tobacco products other than cigarettes at the rate of seven percent (7%) of the invoice price to a wholesaler or retailer, before discounts.
  2. However, the excise or privilege tax levied under subdivision (a)(1) of this section is subject to the limitation stated in § 26-57-208(2)(B).
  3. As used in this subsection, “invoice price” means the same as defined in § 26-57-203.
2. 1. The tax levied by this section shall be reported and paid by wholesalers that shall be licensed under § 26-57-214.
  2. However, unless a retailer has confirmed and establishes by clear and convincing evidence that the tax levied under this section has been paid previously on the tobacco products, the retailer is liable for reporting and paying this tax when the retailer obtains tobacco products from a person other than a wholesaler licensed under § 26-57-214.
3. The exemptions and waivers allowed under §§ 26-57-209 and 26-57-210 [repealed] shall apply to this section.
4. The revenue derived from the additional tax imposed by this section shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections for that month.
5. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of an untaxed tobacco product.
6. 1. A taxpayer that fails to report and remit the tobacco tax due on tobacco products obtained from a person other than a wholesaler that is licensed under § 26-57-214 is subject to the following penalties:
    1. For the first offense, five percent (5%) of the total tobacco tax due;
    2. For the second offense, twenty percent (20%) of the total tobacco tax due; and
    3. For the third and any subsequent offenses, twenty-five percent (25%) of the total tobacco tax due.
  2. In addition, a taxpayer's cigarette or tobacco permit shall be revoked for a period of ninety (90) days for the third and subsequent offenses.
1. In addition to the excise or privilege taxes levied under §§ 26-57-208, 26-57-802, 26-57-803, 26-57-804, and 26-57-1101, there is levied an additional tax of twenty-eight dollars ($28.00) per one thousand (1,000) cigarettes sold in the state.
2. The exemptions and waivers allowed under §§ 26-57-209 and 26-57-210 [repealed] shall apply to this section.
3. The additional tax levied under this section shall be imposed, reported, remitted, and administered in the same manner and at the same time as other taxes levied on cigarettes in the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
4. The revenue derived from the additional tax imposed by this section shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections for that month in accordance with the Revenue Stabilization Law, § 19-5-201 et seq.
5. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of unstamped cigarettes.
1. 1. In addition to other taxes imposed by law, there is levied an additional excise or privilege tax on the first sale of tobacco products other than cigarettes at the rate of thirty-six percent (36%) of the invoice price to a wholesaler or retailer, before discounts.
  2. However, the excise or privilege tax levied under subdivision (a)(1) of this section is subject to the limitation stated in § 26-57-208(2)(B).
  3. As used in this subsection, “invoice price” means the same as defined in § 26-57-203.
2. 1. The tax levied by this section shall be reported and paid by wholesalers that shall be licensed under § 26-57-214.
  2. However, unless a retailer has confirmed and establishes by clear and convincing evidence that the tax levied under this section has been paid previously on the tobacco products, the retailer is liable for reporting and paying this tax when the retailer obtains tobacco products from a person other than a wholesaler licensed under § 26-57-214.
3. The exemptions and waivers allowed under §§ 26-57-209 and 26-57-210 [repealed] shall apply to this section.
4. The additional tax levied under this section shall be imposed, reported, remitted, and administered in the same manner and at the same time as other taxes levied on cigarettes in the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
5. The revenue derived from the additional tax imposed by this section shall be credited to the General Revenue Fund Account of the State Apportionment Fund, there to be distributed with the other gross general revenue collections for that month in accordance with the Revenue Stabilization Law, § 19-5-201 et seq.
6. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of an untaxed tobacco product.
7. 1. A taxpayer that fails to report and remit the tobacco tax due on tobacco products obtained from a person other than a wholesaler that is licensed under § 26-57-214 is subject to the following penalties:
    1. For the first offense, five percent (5%) of the total tobacco tax due;
    2. For the second offense, twenty percent (20%) of the total tobacco tax due; and
    3. For the third and any subsequent offenses, twenty-five percent (25%) of the total tobacco tax due.
  2. In addition, a taxpayer's cigarette or tobacco permit shall be revoked for a period of ninety (90) days for the third and subsequent offenses.
1. In addition to the excise tax levied under § 26-57-801, there is levied an additional tax of fifty cents (50¢) per package of thirty-two (32) sheets of cigarette paper sold in the state.
2. The additional tax levied under this section shall be imposed, reported, remitted, and administered in the same manner and at the same time as other taxes levied on cigarette paper under this subchapter and the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
3. The revenues collected under this section shall be special revenues and shall be credited to the University of Arkansas for Medical Sciences National Cancer Institute Designation Trust Fund.
1. Terms used in this subchapter which are defined by the Arkansas Tax Procedure Act, § 26-18-101 et seq., shall have the meaning set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., unless otherwise provided or unless a different meaning is required by the use of the term.
2. As used in this subchapter:
  1. “Bottle” means any closed or sealed glass, metal, paper, plastic, or any other type of container regardless of the size or shape of the container;
  2. “Bottled soft drinks” means any complete, ready to consume, nonalcoholic drink, whether carbonated or not, commonly referred to as a “soft drink”, contained in any bottle;
  3. “Distributor, manufacturer, or wholesale dealer” means any person who receives, stores, manufactures, bottles, or sells bottled soft drinks, soft drink syrups, simple syrups, or powders, or base products for mixing, compounding, or making soft drinks for sale to retail dealers, other manufacturers, wholesale dealers, or distributors for resale purposes;
  4. “Milk” means:
    1. Natural liquid milk, regardless of animal source or butterfat content;
    2. Natural milk concentrate, whether or not reconstituted, regardless of animal source or butterfat content; or
    3. Dehydrated natural milk, whether or not reconstituted;
  5. “Natural fruit juice” means the:
    1. Original liquid resulting from the pressing of fruit;
    2. Liquid resulting from the reconstitution of natural fruit juice concentrate; or
    3. Liquid resulting from the restoration of water to dehydrated natural fruit juice;
  6. “Natural vegetable juice” means the:
    1. Original liquid resulting from the pressing of vegetables;
    2. Liquid resulting from the reconstitution of natural vegetable juice concentrate; or
    3. Liquid resulting from the restoration of water to dehydrated natural vegetable juice;
  7. “Nonalcoholic beverage” means and includes all beverages not subject to tax under § 3-7-104;
  8. “Place of business” means any place:
    1. Where soft drinks, syrups, simple syrups, powder, or base products are manufactured; or
    2. Where bottled soft drinks, soft drink syrup, simple syrup, soft drink powder, or other soft drink base product, or any other item taxed under this subchapter is received;
  9. “Powder” or “other base” means a solid mixture of basic ingredients used in making, mixing, or compounding soft drinks by mixing the powder or other base with water, ice, syrup or simple syrup, fruits, vegetables, fruit juice, vegetable juice, or any other product suitable to make a complete soft drink;
  10. “Retailer” or “retail dealer” means any person, other than a manufacturer, distributor, or wholesaler, who receives, stores, mixes, compounds, or manufactures any soft drink and sells or otherwise dispenses the soft drink to the ultimate consumer;
  11. 1. “Sale” means the transfer of title or possession for a valuable consideration of tangible personal property regardless of the manner by which the transfer is accomplished.
    2. When a retailer is also acting as a wholesaler or distributor, the duty to report and pay the tax imposed by this subchapter arises when the property is transferred to a retail store for sale to the ultimate consumer, as reflected by the records of the taxpayer;
  12. “Simple syrup” means a mixture of sugar and water;
  13. 1. “Soft drink” means any nonalcoholic beverage sold for human consumption including, but not limited to, the following:
      1. Soda water;
      2. Ginger ale;
      3. All drinks commonly referred to as “cola”;
      4. Lime, lemon, lemon-lime, and other flavored drinks, whether naturally or artificially flavored, including any fruit or vegetable drink containing ten percent (10%) or less natural fruit juice or natural vegetable juice; and
      5. All other drinks and beverages commonly referred to as “soft drinks”.
    2. “Soft drink” does not include coffee or tea unless the coffee or tea is bottled as a liquid for sale; and
  14. “Syrup” means the liquid mixture of basic ingredients used in making, mixing, or compounding soft drinks by mixing the syrup with water, simple syrup, ice, fruits, vegetables, fruit juice, vegetable juice, or any other product suitable to make a complete soft drink.
1. There is hereby levied and there shall be collected a tax upon every distributor, manufacturer, or wholesale dealer, to be calculated as follows:
  1. One dollar and twenty-six cents ($1.26) per gallon for each gallon of soft drink syrup or simple syrup sold or offered for sale in the State of Arkansas;
  2. Twenty and six-tenths cents (20.6¢) per gallon for each gallon of bottled soft drinks sold or offered for sale in the State of Arkansas; and
  3. 1. When a package or container of powder or other base product, other than a syrup or simple syrup, is sold or offered for sale in Arkansas, and the powder is for the purpose of producing a liquid soft drink, then the tax on the sale of each package or container shall be equal to twenty and six-tenths cents (20.6¢) for each gallon of soft drink which may be produced from each package or container by following the manufacturer's directions.
    2. This tax applies when the sale of the powder or other base is sold to a retailer for sale to the ultimate consumer after the liquid soft drink is produced by the retailer.
2. 1. Any retailer or retail dealer who purchases bottled soft drinks, soft drink syrup, simple syrup, powder, or base product from an unlicensed distributor, manufacturer, or wholesale dealer shall be liable for the tax levied in subsection (a) of this section on those purchases.
  2. A retailer shall not be subject to this tax if the retailer purchases syrups, simple syrups, powders or base products, or soft drinks from a supplier licensed under § 26-57-909.
1. 1. The tax levied by § 26-57-904 shall be paid by the distributor, wholesaler, or manufacturer when the syrup, powder or base product, or soft drink is sold.
  2. The tax levied by § 26-57-904 shall be paid by a retailer who purchases syrups, powder or base products, or soft drinks from an unlicensed distributor, wholesaler, or manufacturer.
2. The distributor, wholesaler, or manufacturer and any retailer subject to this tax shall file a monthly return and remit the tax for the month to the Secretary of the Department of Finance and Administration on or before the fifteenth day of the month next following the month in which the sale or purchase was made.
3. 1. The returns shall be made upon forms prescribed and furnished by the secretary and signed by the person required to collect and remit the tax or the person's agent.
  2. The return shall contain such information as the secretary shall require for the proper administration of this subchapter.
1. If a distributor, manufacturer, or wholesale dealer sells bottled soft drinks, soft drink syrups, powders, or base products to retailers or retail dealers located in a city or incorporated town which is subject to the border city tax rate provided in § 26-52-303, then the tax shall be at the same rate as imposed by the adjoining state on distributors, manufacturers, or wholesale dealers, not to exceed the rate imposed by § 26-57-904.
2. If a retailer or retail dealer is located in a city or incorporated town which is subject to the border city tax rate provided by § 26-52-303 and the retailer or retail dealer purchases bottled soft drinks, soft drink syrup, powder, or base products from an unlicensed distributor, manufacturer, or wholesale dealer, then the tax imposed by § 26-57-904 shall be at the same rate imposed by the adjoining state, not to exceed the rate imposed by § 26-57-904.
1. All distributors, wholesalers, or manufacturers of soft drinks, whether located within or without the State of Arkansas, who sell or offer syrups, simple syrups, powders, or base products, or soft drinks for sale to retail dealers within the State of Arkansas shall obtain a license for the privilege of conducting such business within Arkansas from the Secretary of the Department of Finance and Administration.
2. Any retailer who purchases syrups, simple syrups, powders, or base products, or soft drinks from an unlicensed manufacturer, wholesaler, or distributor shall obtain a license for the privilege of conducting such business from the secretary.
3. Any person required to obtain a license under this subchapter shall obtain a license for each place of business owned or operated by the person.
4. The license shall be conspicuously displayed at the place of business for which it was issued.
1. Any person who sells tangible personal property through vending devices may elect to register with the Secretary of the Department of Finance and Administration as a vending device operator and pay the state and local sales and use taxes as provided in this section.
2. Any person who elects to register as a vending device operator shall obtain a gross receipts tax permit from the secretary as provided in § 26-52-201 et seq.
3. 1. All tangible personal property purchased by a vending device operator for resale through a vending device shall be purchased exempt from the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any local sales and use taxes pursuant to the sale-for-resale exemption provided for in § 26-52-401(12).
  2. The vending device operator shall maintain suitable records reflecting all purchases of tangible personal property during each calendar month for resale through a vending device.
4. 1. 1. 1. A tax of four and one-half percent (4½%) is levied on the purchase price of all tangible personal property purchased or withdrawn from inventory during each calendar month by a vending device operator for resale through a vending device.
      2. An additional tax of one and one-half percent (1½%) is levied on the purchase price of all tangible personal property purchased or withdrawn from inventory during each calendar month by a vending device operator for resale through a vending device.
        
        The additional tax levied under subdivision (d)(1)(A)(ii)(a) of this section shall be special revenue and credited to the Educational Adequacy Fund.
    2. The taxes levied in subdivision (d)(1)(A) of this section shall be in lieu of any state gross receipts tax on the gross receipts or gross proceeds derived from the sale of the tangible personal property by the vending device operator through a vending device.
  2. 1. An additional tax of one percent (1%) is levied on the purchase price of all tangible personal property purchased or withdrawn from inventory during each calendar month for resale through a vending device.
    2. This tax shall be in lieu of any local gross receipts taxes imposed by any city or county of this state on the gross receipts or gross proceeds derived from the sale of the property by the vending device operator through a vending device.
5. The taxes levied by subsection (d) of this section shall be reported and paid in the same manner and at the same time as prescribed by law for the reporting and payment of the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
6. When calculating the taxes due under this section, a vending device operator shall be allowed to deduct any manufacturer's rebates received which lower the final purchase price paid by the vending device operator for tangible personal property sold through a vending device.
7. Any vending device operator who manufactures the product which is withdrawn from stock for sale through a vending device shall calculate the tax due by multiplying the tax rate set out in subsection (d) of this section by the selling price for which the person would sell the product to another vending device operator for resale through a vending device.
1. Any person selling tangible personal property through a vending device, and who elects not to register as a vending device operator, shall:
  1. Surrender any gross receipts tax permits issued by the Secretary of the Department of Finance and Administration, unless the permit is needed to report taxable sales other than sales through a vending device; and
  2. 1. Pay the Arkansas gross receipts tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the Arkansas compensating use tax under the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any applicable local sales and use taxes to the person's vendor on all purchases of tangible personal property purchased for resale through a vending device.
    2. 1. The sale-for-resale exemption provided in § 26-52-401(12) shall not apply to purchases of tangible personal property for resale through vending devices unless the purchaser is registered with the secretary as a vending device operator.
      2. However, any person not registered as a vending device operator who maintains property in inventory for subsequent resale on which the state and local sales and use taxes have not been paid, and who subsequently withdraws that property from inventory for sale through a vending device, shall report and pay the state and local sales and use taxes on the person's purchase price of the property withdrawn from inventory.
2. Any person selling property through vending devices who has paid the state and local sales and use taxes in the manner provided by this section shall not be required to collect and remit state or local sales tax on sales of tangible personal property through the vending device.
3. Any person who elects to pay tax on tangible personal property sold through vending devices in accordance with the provisions of this section and who manufactures the product which is withdrawn from stock for resale through a vending device shall pay the taxes due under this section by multiplying the tax rate by the selling price for which the person would sell the product to another for resale through a vending device.
1. All persons who sell tangible personal property through vending devices shall affix the name and identification number, if any, of the person responsible for the payment of the taxes imposed by §§ 26-57-1002 and 26-57-1003.
2. 1. 1. If any vending device does not have the information required by subsection (a) of this section affixed thereto, there shall be a presumption that the taxes imposed by this subchapter have not been paid.
    2. The Secretary of the Department of Finance and Administration shall seal any vending device subject to this presumption in such a manner as to prevent any further sales through the vending device and shall assess and collect a penalty of fifty dollars ($50.00) per vending device against the person selling tangible personal property through the vending device.
  2. The presumption in subdivision (b)(1) of this section shall be overcome if the person selling property through the vending device affixes the information required by this section to the vending device and proves that the taxes imposed by §§ 26-57-1002 and 26-57-1003 have been paid.
1. The revenues derived from § 26-57-1002(d)(1) shall be general revenues and shall be deposited into the State Treasury in the same manner as the Arkansas gross receipts tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
2. All revenues derived from § 26-57-1002(d)(2) shall be deposited by the Treasurer of State into the Identification Pending Trust Fund for Local Sales and Use Taxes under §§ 26-74-221, 26-75-223, and 26-82-113, and all revenues deposited into that fund shall be distributed to the cities and counties of this state under §§ 26-74-221(a)(2)(C)(ii), 26-75-223(a)(2)(C)(ii), and 26-82-113(a)(2)(A)(ii).
1. In addition to the excise or privilege taxes levied under §§ 26-57-208 and 26-57-802, there is hereby levied a tax of one dollar and twenty-five cents ($1.25) per one thousand (1,000) cigarettes sold in the state.
2. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of unstamped cigarettes.
1. In addition to other taxes imposed by law, there is levied an additional excise or privilege tax on the first sale of tobacco products other than cigarettes at the rate of two percent (2%) of the invoice price to a wholesaler or retailer, before discounts.
2. 1. 1. The taxes levied by this section and § 26-57-1101 shall be reported and paid by wholesalers that shall be licensed under § 26-57-214.
    2. However, unless a retailer has confirmed and establishes by clear and convincing evidence that the tax levied under this section has been paid previously on the tobacco products, the retailer is liable for reporting and paying these taxes when the retailer obtains tobacco products from a person other than a wholesaler licensed under § 26-57-214.
  2. 1. A taxpayer that fails to report and remit the tobacco tax due on tobacco products obtained from any person other than a wholesaler that is licensed under § 26-57-214 shall be subject to the following penalties:
      1. Five percent (5%) of the total tobacco tax due for the first offense;
      2. Twenty percent (20%) of the total tobacco tax due for the second offense; and
      3. Twenty-five percent (25%) of the total tobacco tax due for the third and any subsequent offenses.
    2. In addition, the taxpayer's retail cigarette/tobacco permit shall be revoked for a period of ninety (90) days for the third and any subsequent offenses.
  3. This subsection does not affect the provisions of § 26-57-228.
3. As provided in § 26-57-244, the Secretary of the Department of Finance and Administration may make a direct assessment of excise tax against any person in possession of untaxed tobacco products.
1. All remaining moneys collected from the additional tax levied in §§ 26-57-1101 and 26-57-1102 shall be deposited into the State Treasury as special revenues to be distributed as follows:
  1. Twenty percent (20%) shall be credited to the Breast Cancer Research Fund, which is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State to be used exclusively for the purposes set forth in § 20-15-1303; and
  2. 1. Eighty percent (80%) shall be credited to the Breast Cancer Control Fund, which is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State to be used exclusively for the purposes set forth in § 20-15-1304 and at the option of the Department of Health in an amount not to exceed the amount appropriated by the General Assembly for the purpose of cervical cancer control.
    2. The Secretary of the Department of Health shall be the disbursing officer for the Breast Cancer Control Fund, and the Chancellor of the University of Arkansas for Medical Sciences shall be the disbursing officer for the Breast Cancer Research Fund.
2. The moneys in the Breast Cancer Research Fund are to be allocated to the Breast Cancer Research Program for the awarding of grants, chairs, and contracts to researchers for research with respect to the cause, cure, treatment, prevention, and earlier detection of breast cancer and for developing leadership in research in Arkansas.
3. 1. The moneys in the Breast Cancer Control Fund for the control of breast cancer are to be allocated according to the recommendations of the Breast Cancer Control Advisory Board, which shall establish the scope of services of the program and programmatic priorities based on the analysis of available information.
  2. The board shall also be responsible for developing eligibility criteria to be applied in evaluating requests for breast cancer control financial assistance from screened women who are found to be in need of diagnostic and treatment services.
  3. The board shall also review contractual agreements for breast cancer control with providers who will be rendering services through the program.
1. 1. Any person who is the operator of a vending device in this state that is made available for use and operation by the general public whether the operator is the owner of the vending device, or a lessee, renter, bailee, etc., of the owner of the vending device in lieu of paying sales taxes under the provisions of the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or under the provisions of § 26-57-1001 et seq., may elect to pay the decal fees provided by § 26-57-1206.
  2. If the election is not made by the operator, then the general or special sales taxes that are otherwise applicable to the operation of the vending device shall be imposed upon the sale of tangible personal property from the vending device.
2. The operator of a vending device who makes the election to pay the decal fees provided by this subchapter shall be responsible for applying to the Secretary of the Department of Finance and Administration for the issuance of an annual or special vending device decal for the vending device and at the same time shall pay to the secretary the annual or special vending device decal fee provided for by this subchapter, before the vending device is made available for use and operation by the general public.
3. The secretary, upon receipt of full payment of the applicable decal fee, and upon approval of the application, shall issue to the person making the application an annual or special vending device decal for the type of vending device or devices covered by the application and payment.
4. 1. The annual or special vending device decals and the application provided for herein shall be in such form as prescribed by the secretary. These decals and applications shall contain on their faces such information and descriptions as shall be required by rules adopted by the secretary to properly and reasonably implement the provisions of this subchapter.
  2. Any number of vending devices may be included in one (1) application, but all vending devices operated by the applying operator must be made subject to this alternative decal fee. The operator may not choose to have part of his or her vending devices covered by the decal fee provided by this subchapter, while other vending devices operated by the same operator during the decal registration year would be subject to the general or special sales taxes that would be otherwise applicable to the sale of tangible personal property from the vending devices.
5. Before any vending device is put into operation or placed where the vending device may be used or operated by any member of the general public and at all times when the vending device is being used or operated or made available to members of the general public for use or operation, an annual or special vending device decal shall be firmly affixed to the vending device covered thereby by the person who is the operator of the vending device so that the decal shall be plainly visible to and readable by the members of the general public.
1. 1. Every person who is the operator of a vending device, who elects to have the operation of the vending device covered by the provisions of this subchapter, and who makes available to the general public for use and operation vending devices described in this subchapter shall pay to the Secretary of the Department of Finance and Administration for the benefit of the state and its municipalities and counties the following annual vending device decal fee for each vending device before the vending device may be placed in service within the state for use by members of the public:
    1. For each coin-operated vending device requiring a coin or thing of value of twenty-five cents (25¢) or more for a sale, ninety-three dollars ($93.00);
    2. For each coin-operated vending device requiring a coin or thing of value of less than twenty-five cents (25¢) for a sale, fifteen dollars ($15.00);
    3. For each coin-operated bulk vending device requiring a coin or thing of value of more than twenty-five cents (25¢) for a sale, seven dollars and fifty cents ($7.50);
    4. For each coin-operated bulk vending device requiring a coin or thing of value of twenty-five cents (25¢) or less for a sale, two dollars and fifty cents ($2.50); and
    5. For each coin-operated manually powered vending device, coin-operated tabletop snack vending device, or other coin-operated manually powered vending device requiring a coin or thing of value of twenty-five cents (25¢) or more for a sale, thirty dollars ($30.00).
  2. 1. After payment of the appropriate annual vending device decal fee, the annual vending device decal issued by the secretary shall bear on its face the year of its issue.
    2. The annual vending device decal must be affixed to each vending device in a place that is clearly visible to the user of the vending device before the vending device may be placed by the operator for public use or operation in this state.
  3. The annual vending device decal shall not be transferred from one (1) vending device to another, unless the person who is the operator of the vending device shall establish to the satisfaction of the secretary that the vending device to which the annual vending device decal is to be transferred is a vending device that is replacing the vending device to which the annual vending device decal was originally affixed.
2. In those instances in which it is shown to the satisfaction of the secretary that a vending device upon which an annual vending device decal fee is otherwise due will be placed in service for use by members of the general public for a definite period of time that is less than one (1) year, such as when the vending device shall be placed for public use in connection with fairs, carnivals, and places of amusement that operate only during certain seasons of the year, the secretary shall issue for those vending devices a special vending device decal and collect a special vending device decal fee computed as follows:
  1. 1. The special vending device decal may be issued for any number of thirty-day periods totaling less than a full year.
    2. The special vending device decal shall:
      1. State on its face that it is a special vending device decal, not an annual vending device decal;
      2. Be for one (1) or more thirty-day periods;
      3. State on its face the precise dates for which it has been issued; and
      4. Not be transferred from one (1) vending device to another vending device;
  2. The special vending device decal fee shall be computed and paid by the person who is the operator of the vending device on the basis of one-fifth (1/5) of the annual vending device decal fee charged by this subchapter for the type of vending device operated for each thirty-day period for which the special decal is issued; and
  3. In the event the vending device is made available to the public for a period beyond that for which the special vending device decal is issued, then a full year's fee and penalty, as set out in this section, shall be due on the vending device from the person who is the operator of the vending device.
3. 1. The annual or special vending device decal fees required to be paid by subsections (a) and (b) of this section shall be paid by the person who is the operator of the vending device in lieu of the requirement that the person collect and remit the:
    1. State and local gross receipts or sales taxes levied pursuant to the provisions of the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., any provision of § 26-74-101 et seq. and § 26-75-101 et seq., or any other provision of this Code which provides for the levy of a local sales tax; or
    2. Special sales taxes levied pursuant to the provisions of § 26-57-1001 et seq.
  2. It is the intent of the General Assembly that gross proceeds or gross receipts shall not be subject to any state or local gross receipts or sales taxes imposed in this state when:
    1. The gross receipts or gross proceeds are received by a person who is the operator of a vending device from the sale of any item of tangible personal property through the vending device; and
    2. The annual or special vending device decal fee has been paid and the decal is affixed to the vending device.
4. Any sales made by the operator of a coin-operated vending device that are made without the use of a vending device, for example, office coffee service, manual hot foods lines, catering events, and other similar sales, shall be subject to the state and local gross receipts or sales taxes levied pursuant to the provisions of the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., any provision of § 26-74-101 et seq. and § 26-75-101 et seq., or any other provision of this Code that provides for the levy of a local sales tax.
5. 1. For all vending devices that the operator does not elect to have covered by the decal fee provided by this section, the operator of that vending device shall acquire from the secretary an identifying decal that the operator shall affix to the vending device in a prominent place so as to establish to the consuming public that the vending device is not covered by the provisions of this subchapter.
  2. By reasonable rules the secretary shall establish the amount to be charged for an identifying decal, and the amount shall not exceed the cost of producing the identifying decals.
6. An operator who elects to pay tax at the wholesale level and which has been issued an identification number by the Department of Finance and Administration as of March 31, 1997, shall be entitled to utilize that identification number for all vending devices owned by that operator.
1. 1. For the purpose of the annual or special vending device decal issued under § 26-57-1204, the decal fee year shall begin on the first day of July and end on the last day of the following June. This decal fee year shall be divided into two (2) halves.
  2. The Secretary of the Department of Finance and Administration shall in each instance issue annual vending device decals for the remainder of the decal year upon payment of the annual vending device decal fee on the basis of the full amount of the annual decal applied for between July 1 and December 31 of the decal fee year, and in return for the payment of an amount of one-half (½) of the annual vending device decal fee, for any annual decal applied for between January 1 and June 30 of the decal fee year.
2. For the first taxable year that the annual or special vending device decal fee is applicable, the person who is the operator of the vending devices that are subject to registration and payment of the decal fees shall register all vending devices with the secretary, but for the first one-half year, after March 31, 1997, the operator shall pay one-half (½) of the decal fee for each vending device on or before January 1, 1998. Thereafter, the entire annual or special vending device decal fee shall be due from the person who is the owner, lessor, renter, or operator of the vending devices on or before July 1 of the applicable taxable year.
1. 1. It is declared to be the purpose of this subchapter to provide revenues for general governmental functions of the state and its counties and municipalities, in lieu of the state and local gross receipts or sales taxes or vending device sales taxes that would otherwise be due and owing from the person who is the operator of a vending device.
  2. For that purpose and to that end, it is expressly provided that the revenue derived by the Secretary of the Department of Finance and Administration from the sale of annual or special vending device decal fees, including penalties, shall be deposited by the secretary into the State Treasury and credited as provided in subsection (b) of this section.
2. The vending device decal fees imposed by § 26-57-1206 or any proportionate amount of the vending device decal fees shall be divided as follows:
  1. Eighty percent (80%) of the fees collected under § 26-57-1206(a)(1)(B)-(E) and sixty percent (60%) of the fees collected under § 26-57-1206(a)(1)(A) shall be deposited to the credit of the General Revenue Fund Account of the State Apportionment Fund provided by § 19-5-202;
  2. Twenty percent (20%) of the fees collected under § 26-57-1206(a)(1)(B)-(E) and fifteen percent (15%) of the fees collected under § 26-57-1206(a)(1)(A) shall be deposited by the Treasurer of State into the Identification Pending Trust Fund for Local Sales and Use Taxes under §§ 26-74-221, 26-75-223, and 26-82-113, and all revenues deposited into that Identification Pending Trust Fund for Local Sales and Use Taxes shall be distributed to the cities and counties of this state under § 26-74-221(a)(2)(C)(ii), § 26-75-223(a)(2)(C)(ii), and § 26-82-113(a)(2)(B); and
  3. Twenty-five percent (25%) of the fees collected under § 26-57-1206(a)(1)(A) shall be special revenues deposited by the Treasurer of State to the credit of the Educational Adequacy Fund.
1. 1. Any person who is the operator of a vending device who places a vending device in use and operation, or in a place available to members of the general public for use and operation, without a valid and current annual or special vending device decal having been affixed thereto as required by §§ 26-57-1204 and 26-57-1206, shall be liable for the decal fee on the vending device in the full amount of the applicable annual vending device decal fee, as levied by this subchapter, and the annual vending device decal fee shall be collected by the Secretary of the Department of Finance and Administration in accordance with the provisions of § 26-57-1204.
  2. 1. In addition to the annual vending device decal fee that is due on the vending device, the operator of the vending device which was responsible for failing to apply for and pay for the applicable annual vending device decal fee shall also be liable to pay the secretary a penalty which the person shall pay to the secretary and which the secretary shall assess against the person.
    2. The amounts of these penalties for failure to purchase and display the annual decal fee are to be paid by the operator, in addition to the applicable annual vending device decal fee, and the penalty shall be the larger of either twenty-five dollars ($25.00) per vending device or an amount equal to eight (8) times the annual vending decal fee applicable to each vending device.
2. Upon conviction, a person who is the operator of a vending device who places the vending device in operation in this state for use or operation by members of the general public without first attaching to the vending device a valid and current annual vending device decal or special vending device decal under this subchapter is guilty of a Class C misdemeanor for each vending device found not to have a valid and current annual vending device decal or special vending device decal under this subchapter.
1. Nothing in this subchapter shall be construed to legalize any coin-operated video gambling device, slot machine, or other coin-operated gambling device that may be prohibited by any of the other statutes of this state.
2. The Secretary of the Department of Finance and Administration may assume that any vending device described in any application made under this subchapter and for which an annual or special vending device decal fee is paid is lawful, and no claim for refund of any annual or special vending device decal fee shall be allowed based upon the inability of the operator of the coin-operated device to operate the vending device because of any other applicable law of this state.
1. When any vending device as defined in § 26-57-1203 is placed on location for retail sales to the members of the general public in the State of Arkansas, or, after having been placed on location in this state, the vending device is left on location without the required vending device decal affixed thereon as may otherwise be provided for by the laws of this state, the vending device, including all cash in the receptacle thereof, if any, shall be considered forfeited to the State of Arkansas because of the absence of the required vending device decal from the vending device.
2. The vending device may be seized and sealed on site at its location by the Secretary of the Department of Finance and Administration or his or her authorized agent, and the vending device shall not be removed from the location by any person until the vending device is released from seizure by the secretary or his or her authorized agent.
3. The vending device may be seized by any authorized agent of the secretary, or by any sheriff or other law enforcement officer of this state acting upon the request and at the direction of the secretary.
1. Upon the seizure of the vending device, the vending device shall forthwith be delivered, together with the cash, if any, contained in the receptacle of the vending device, to the Secretary of the Department of Finance and Administration.
2. The secretary or his or her authorized agent shall then proceed to make an administrative determination of whether or not the vending device and cash, if any, that have been seized should in fact be forfeited to the State of Arkansas.
3. The owner of the vending device shall be given at least thirty (30) days' written notice of the date of the hearing on the forfeiture of the vending device. The notice shall be considered a notice of proposed assessment under § 26-18-403, and the owner shall be entitled to an administrative hearing pursuant to § 26-18-405.
1. In the event the Secretary of the Department of Finance and Administration or his or her authorized agent finds that the vending device, including the cash contents, if any, should be forfeited to the State of Arkansas, the secretary or his or her authorized agent shall make a written determination of forfeiture of the vending device to the State of Arkansas, and the secretary shall direct the sale of the vending device.
2. The vending device shall be sold by the secretary, his or her authorized agent, the sheriff in the county where it was seized, or the sheriff of Pulaski County after thirty (30) days' written notice of sale, which notice of sale shall be given:
  1. In writing to the owner of the vending device at the owner's last known address;
  2. In writing to the operator of the vending device at the operator's last known address; and
  3. By posting five (5) notices of sale in conspicuous places in the county where the sale of the vending device is to be held. One (1) of the notices of sale shall be posted on a bulletin board at the county courthouse of the county.
3. At the discretion of the secretary, notice of sale of the vending device may be given, alternatively to posting, by publishing the notice of sale in a newspaper of general circulation in the county at least thirty (30) days prior to the sale.
1. The written determination of the Secretary of the Department of Finance and Administration or his or her authorized agent declaring a forfeiture of the vending device, including the cash contents thereof, if any, and directing the sale of the vending device shall be a final determination of the secretary and shall be treated for purposes of the owner's or operator's appeal of the secretary's determination as a final assessment, subject to the provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq.
2. Judicial review of the final determination by the secretary shall be available pursuant to the provisions of § 26-18-406.
1. “Brand family” means all styles of cigarettes sold under the same trademark and differentiated from one another by means of additional modifiers or descriptors, including, but not limited to, “menthol”, “lights”, “kings”, and “100s”, and includes any brand name alone or in conjunction with any other word, trademark, logo, symbol, motto, selling message, recognizable pattern of colors, or any other indicia of product identification identical or similar to or identifiable with a previously known brand of cigarettes.
2. “Cigarette” has the same meaning as in § 26-57-260(4).
3. “Director” means the Director of Arkansas Tobacco Control.
4. “Licensee” means any person or entity who has been granted and holds a permit or license under § 26-57-215, including a wholesale cigarette license or permit, a wholesale tobacco license or permit, a salesperson's license or permit, a retail cigarette license or permit, a retail tobacco license or permit, or a dealer's license or permit.
5. “Master Settlement Agreement” has the same meaning as in § 26-57-260(5).
6. “Nonparticipating manufacturer” means any tobacco product manufacturer that is not a participating manufacturer.
7. “Participating manufacturer” has the meaning given that term in Section II(jj) of the Master Settlement Agreement and all amendments to the agreement.
8. “Qualified escrow fund” has the same meaning as that term is defined in § 26-57-260(6).
9. “Tobacco product manufacturer” has the same meaning as that term is defined in § 26-57-260(9).
10. 1. “Units sold” means the number of individual cigarettes sold in the state by the applicable tobacco product manufacturer, whether directly or indirectly through a distributor, retailer, or similar intermediary during the year.
  2. “Units sold” includes all nonparticipating manufacturer cigarettes that are required to be sold in a package bearing a stamp required under the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
11. “Wholesaler” means:
  1. Any person or entity who has been granted and holds a wholesale cigarette license or permit or a wholesale tobacco license or permit pursuant to § 26-57-215; and
  2. Any person or entity who as a retailer purchases tobacco products directly from a manufacturer or an unlicensed wholesaler or distributor and is therefore liable for reporting and paying taxes under § 26-57-211(a)(1)(B).
12. “Importer” means the same as defined in § 26-57-203.
13. “Newly qualified nonparticipating manufacturer” means a nonparticipating manufacturer that has not previously been listed in the directory maintained by the Attorney General under § 26-57-1303.
1. Certification.
  1. No later than April 30 each year, every tobacco product manufacturer whose cigarettes are sold in the state, whether directly or through a wholesaler, retailer, or similar intermediary or intermediaries, shall execute and deliver on a form prescribed by the Attorney General a certification to the Attorney General certifying under penalty of perjury that as of the date of the certification the tobacco product manufacturer either:
    1. Is a participating manufacturer; or
    2. Is in full compliance with §§ 26-57-260 and 26-57-261, including all quarterly installment payments that may be required under § 26-57-1305(e).
  2. 1. A participating manufacturer shall include in its certification a list of its brand families.
    2. The participating manufacturer shall update the list required under subdivision (a)(2)(A) of this section thirty (30) calendar days before an addition to or modification of the participating manufacturer's brand families by executing and delivering a supplemental certification to the Attorney General.
  3. A nonparticipating manufacturer shall include in its certification:
    1. An electronic mail address and fax number to which notices from the Attorney General may be sent and a list of all of its brand families and the number of units sold for each brand family that were sold in the state during the preceding calendar year; and
    2. A list of the nonparticipating manufacturer's brand families that have been sold in the state at any time during the current calendar year:
      1. Indicating by an asterisk any brand family sold in the state during the preceding calendar year but that is no longer being sold in the state as of the date of the certification; and
      2. Identifying by name and address any other manufacturer of the brand families in the preceding or current calendar year.
  4. The nonparticipating manufacturer shall update the list required under subdivision (a)(3) of this section thirty (30) calendar days before an addition to or modification of the nonparticipating manufacturer's brand families by executing and delivering a supplemental certification to the Attorney General.
  5. The certification for a nonparticipating manufacturer shall further certify:
    1. That the nonparticipating manufacturer is registered to do business in the state or has appointed a resident agent for service of process and provided notice thereof as required by § 26-57-1304;
    2. That the nonparticipating manufacturer:
      1. Has established and continues to maintain a qualified escrow fund; and
      2. Has executed a qualified escrow agreement that has been reviewed and approved by the Attorney General and that governs the qualified escrow fund;
    3. That the nonparticipating manufacturer is in full compliance with §§ 26-57-260 and 26-57-261, this subchapter, and the rules promulgated under §§ 26-57-260 and 26-57-261 and this subchapter;
    4. The name, address, and telephone number of the financial institution with which the nonparticipating manufacturer has established the qualified escrow fund required under §§ 26-57-260 and 26-57-261 and the rules promulgated under §§ 26-57-260 and 26-57-261;
    5. The account number of the qualified escrow fund and any subaccount number for the state;
    6. The amount the nonparticipating manufacturer placed in the fund for cigarettes sold in the state during the preceding calendar year, the date and amount of each deposit, and the evidence or verification the Attorney General deems necessary to confirm the requirements of this subsection;
    7. The amount and date of each withdrawal or transfer of funds the nonparticipating manufacturer made from the fund or from any other qualified escrow fund into which it made escrow payments under §§ 26-57-260 and 26-57-261 and the rules promulgated under §§ 26-57-260 and 26-57-261;
    8. 1. That the nonparticipating manufacturer consents to be sued in the courts of the state for purposes of the Attorney General's enforcing §§ 26-57-260 and 26-57-261, this subchapter, or the rules promulgated under §§ 26-57-260 and 26-57-261.
      2. The consent to suit under subdivision (a)(5)(H)(i) of this section shall be demonstrated by the execution and submission of a consent-to-suit form prepared by the Attorney General, with proof of authority to consent and execute the form; and
    9. 1. In the case of a nonparticipating manufacturer located outside of the United States, that it has provided a declaration on a form prescribed by the Attorney General from each of its importers into the United States of any of its brand families to be sold in the state that the importer accepts joint and several liability with the nonparticipating manufacturer for all escrow deposits due under § 26-57-261 and for all penalties assessed under § 26-57-261.
      2. A declaration under subdivision (a)(5)(I)(i) of this section shall appoint for the declarant a resident agent for service of process in Arkansas under § 26-57-1304.
  6. A tobacco product manufacturer may not include a brand family in its certification unless:
    1. In the case of a participating manufacturer, the participating manufacturer affirms that the brand family is its cigarettes for purposes of calculating its payments under the Master Settlement Agreement for the relevant year in the volume and shares determined under the Master Settlement Agreement; and
    2. In the case of a nonparticipating manufacturer, the nonparticipating manufacturer affirms that the brand family is its cigarettes for purposes of §§ 26-57-260 and 26-57-261.
  7. Subdivision (a)(6) of this section does not limit or otherwise affect the state's right to maintain that a brand family constitutes cigarettes of a different tobacco product manufacturer for purposes of calculating payments under the Master Settlement Agreement or for purposes of §§ 26-57-260 and 26-57-261.
  8. Tobacco product manufacturers shall maintain all invoices and documentation of sales and other information relied upon for the certification for a period of five (5) years unless otherwise required by law to maintain them for a greater period of time.
  9. A tobacco product manufacturer shall include in its certification a statement that it holds a valid permit under 26 U.S.C. § 5713, as it existed on January 1, 2011, and shall provide a copy of the permit to the Attorney General upon request.
  10. 1. It is unlawful for a person to submit a certification required by this section that asserts the truth of any material matter that the person knows to be false or inaccurate.
    2. In addition to any other provision of law, the Attorney General may seek a civil penalty in an amount not to exceed ten thousand dollars ($10,000) against a person that violates this subsection.
    3. A civil penalty collected under this section is general revenue of the state.
2. Directory of Cigarettes Approved for Stamping and Sale.
  1. Not later than the last business day of May of each year, the Attorney General shall develop and make available for public inspection and shall publish on the Attorney General's website a directory listing all tobacco product manufacturers that have provided current and accurate certifications conforming to the requirements of subsection (a) of this section and all brand families that are listed in the certifications except as provided in this section.
  2. The Attorney General shall not include or retain in the directory described in this subsection the name or brand families of any manufacturer that has failed to provide the required certification or whose certification the Attorney General determines is not in compliance with subsection (a) of this section unless the Attorney General has determined that the violation has been cured to the satisfaction of the Attorney General.
  3. Neither a tobacco product manufacturer nor brand family shall be included or retained in the directory described in this subsection if the Attorney General concludes in the case of a nonparticipating manufacturer that:
    1. An escrow payment required under §§ 26-57-260 and 26-57-261 for any period for any brand family, whether or not listed by the nonparticipating manufacturer, has not been fully paid into a qualified escrow fund governed by a qualified escrow agreement that has been approved by the Attorney General;
    2. An outstanding final judgment, including interest on the judgment, for a violation of §§ 26-57-260 and 26-57-261 has not been fully satisfied for the brand family or the manufacturer; or
    3. The total nationwide reported sales of cigarettes on which federal excise tax is paid exceeds the sum of its nationwide reports under 15 U.S.C. § 376, as it existed on January 1, 2011, and any interstate reports by more than five percent (5%) of its total sales or one million (1,000,000) cigarettes, whichever is less, unless the nonparticipating manufacturer cures or satisfactorily explains the discrepancy within thirty (30) days after receiving notice of the discrepancy.
  4. A tobacco product manufacturer or brand family shall not be maintained in the directory described in this subsection if the Attorney General concludes that:
    1. The tobacco product manufacturer knowingly sold cigarettes to a stamp deputy whose appointment and commission has been revoked by the Secretary of the Department of Finance and Administration under § 26-57-236;
    2. The tobacco product manufacturer or any of the tobacco product manufacturer's affiliates, sales entity affiliates, officers, or directors has pleaded guilty or nolo contendere to or been found guilty of a felony crime relating to the sale or taxation of cigarettes or tobacco products; or
    3. 1. The tobacco product manufacturer and the tobacco product manufacturer's brand families have been removed from the directory of another state based on acts or omissions that would, if done in this state, serve as a basis for removal from the directory maintained by the Attorney General under this section, unless the tobacco product manufacturer demonstrates that its removal from the other state's directory was effected without due process.
      2. A tobacco product manufacturer that is removed from the state directory under this subsection shall be eligible for relisting in the directory described in this subsection on the earlier of the date on which the tobacco product manufacturer cures the violation or the date on which the tobacco product manufacturer is reinstated to the directory in the other state.
  5. The Attorney General shall update the directory described in this subsection as necessary in order to correct mistakes and to add or remove a tobacco product manufacturer or brand family to keep the directory in conformity with the requirements of this subchapter.
  6. Every wholesaler shall provide and update as necessary an electronic mail address to the Attorney General for the purpose of receiving any notifications as may be required by this subchapter.
  7. 1. The Attorney General may not remove the manufacturer or its brand families from the directory until at least fifteen (15) days after the manufacturer has been given notice of an intended action.
    2. Notice under subdivision (b)(7)(A) of this section shall be sufficient and be deemed immediately received by a manufacturer if the notice is sent either electronically or by facsimile to an electronic mail address or facsimile number, as the case may be, provided by the manufacturer in its most recent certification filed under subsection (a) of this section.
3. Prohibition Against Stamping, Sale, or Import of Cigarettes Not in Directory.
  1. It is unlawful for any person or entity to:
    1. Affix a tax stamp to a package or other container of cigarettes of a tobacco product manufacturer or brand family that the person or entity knows is not included in the directory maintained by the Attorney General pursuant to subsection (b) of this section; or
    2. Sell, offer, or possess in this state, or import for personal consumption in this state, cigarettes of a tobacco product manufacturer or brand family that the person or entity knows is not included in the directory maintained by the Attorney General pursuant to subsection (b) of this section.
  2. Persons and entities are deemed to have received notice that cigarettes of a tobacco product manufacturer or a brand family are not included in the directory maintained by the Attorney General pursuant to subsection (b) of this section at the time the Attorney General's website fails to list any such cigarettes in the directory or at the time the Attorney General removes the cigarettes from the directory.
  3. A person or entity purchasing cigarettes for resale shall not be in violation of this subchapter if:
    1. At the time of purchase the manufacturer and brand families of the cigarettes are included in the directory maintained by the Attorney General pursuant to subsection (b) of this section and the cigarettes are lawfully stamped and sold within twenty-one (21) days of the date the manufacturer and brand families were removed from the directory; or
    2. 1. In the case of a retailer, the cigarettes are sold or delivered to retail customers within twenty-one (21) days after receipt of delivery of the cigarettes from a wholesaler so long as the cigarettes in question were lawfully purchased from the same wholesaler and the twenty-one-day period has not expired.
      2. Possession of cigarettes after the twenty-one-day period in subdivision (c)(3)(B)(i) of this section has expired is a violation of subdivision (c)(1) of this section.
  4. No brand families may be purchased by or delivered to a wholesaler once the manufacturer and brand families are removed from the directory.
  5. Any manufacturer, wholesaler, or retailer selling cigarettes for resale of a manufacturer or brand family that has been removed from the directory maintained by the Attorney General pursuant to subsection (b) of this section shall notify the purchaser of the cigarettes of that fact at the time of delivery of the cigarettes.
  6. 1. Unless otherwise provided by contract or purchase agreement, a purchaser shall be entitled to a refund of the purchase price from the manufacturer, wholesaler, or retailer from whom the cigarettes were purchased of any cigarettes that are the product of a manufacturer or a brand family that has been removed from the directory maintained by the Attorney General pursuant to subsection (b) of this section.
    2. The Department of Finance and Administration may by rule provide for a refund of the price of tax stamps that have been lawfully affixed to cigarettes that may not be sold under this subsection.
1. 1. 1. As a condition precedent to having its brand families included or retained in the directory maintained by the Attorney General under § 26-57-1303(b), a nonresident or foreign nonparticipating manufacturer that has not registered to do business in the state as a foreign corporation or business entity shall appoint and continually engage without interruption the services of an agent in this state to act as agent for the service of process on whom all process and any action or proceeding against it concerning or arising out of the enforcement of this subchapter and §§ 26-57-260 and 26-57-261 may be served in any manner authorized by law.
    2. 1. As an additional condition precedent to having its brand families included or retained in the directory described in § 26-57-1303(b), a nonparticipating manufacturer located outside of the United States shall cause each of its importers into the United States of each of its brand families to be sold in the state to appoint and continually engage without interruption the services of an agent in this state in accordance with this section.
      2. The obligations of a nonparticipating manufacturer imposed by this section with respect to appointment of an agent also apply to an importer with respect to the appointment of an agent.(2) The service shall constitute legal and valid service of process on the nonparticipating manufacturer.(3) The nonparticipating manufacturer shall provide the name, address, phone number, and proof of the appointment and availability of the agent to and to the satisfaction of the Attorney General.
2. 1. The nonparticipating manufacturer shall provide notice to the Attorney General thirty (30) calendar days before the termination of the authority of an agent and shall provide proof to the satisfaction of the Attorney General of the appointment of a new agent no less than five (5) calendar days before the termination of an existing agent appointment.
  2. If an agent terminates an agency appointment, the nonparticipating manufacturer shall notify the Attorney General of the termination within five (5) calendar days and shall include proof to the satisfaction of the Attorney General of the appointment of a new agent.
3. 1. Any nonparticipating manufacturer whose cigarettes are sold in this state and who has not appointed and engaged an agent as required by this subchapter shall be deemed to have appointed the Secretary of State as the agent and may be proceeded against in courts of this state by service of process upon the Secretary of State.
  2. However, the appointment of the Secretary of State as the agent shall not satisfy the condition precedent for having the brand families of the nonparticipating manufacturer included or retained in the directory maintained by the Attorney General pursuant to § 26-57-1303(b).
1. Reporting by Wholesalers.
  1. Not later than twenty (20) calendar days after the end of each calendar quarter, each wholesaler shall submit such information as the Attorney General requires to facilitate compliance with this subchapter, including, but not limited to, a list by brand family of the total number of cigarettes or in the case of “roll-your-own”, the equivalent stick count for which the wholesaler affixed tax stamps during the previous calendar quarter or otherwise paid the tax due for the cigarettes.
  2. The wholesaler shall maintain and make available to the Attorney General all invoices and documentation of sales of all nonparticipating manufacturer cigarettes and any other information relied upon in reporting to the Attorney General for a period of five (5) years.
2. Disclosure of Information.
  1. The Arkansas Tobacco Control Board and the Department of Finance and Administration may disclose to the Attorney General any information in their possession as requested by the Attorney General for purposes of determining compliance with and enforcing the provisions of this subchapter.
  2. The board, the department, and the Attorney General may share with each other any information received under this subchapter and may share the information with other federal, state, or local agencies only for purposes of enforcement of this subchapter, §§ 26-57-260 and 26-57-261, or corresponding laws of other states.
3. Verification of Qualified Escrow Fund. The Attorney General may require at any time from the nonparticipating manufacturer proof from the financial institution in which the nonparticipating manufacturer has established a qualified escrow fund for the purpose of compliance with §§ 26-57-260 and 26-57-261 of:
  1. The amount of money in the fund, exclusive of interest;
  2. The amount and date of each deposit into the fund; and
  3. The amount and date of each withdrawal from the fund.
4. Requests for Additional Information. In addition to the information required to be submitted under this subchapter, the Attorney General may require a licensee or tobacco product manufacturer to submit any additional information, including, but not limited to, samples of the packaging or labeling of each brand family as is necessary to enable the Attorney General to determine whether a tobacco product manufacturer is in compliance with this subchapter.
5. Quarterly Escrow Installments for Tobacco Product Manufacturers.
  1. 1. To promote compliance with this subchapter, the Attorney General may require any tobacco product manufacturer to make escrow deposits required by §§ 26-57-260 and 26-57-261 in quarterly installments.
    2. Quarterly installments of escrow deposits required under subdivision (e)(1)(A) of this section shall be deposited into a qualified escrow account established to receive escrow deposits required by §§ 26-57-260 and 26-57-261 not later than twenty (20) calendar days after the end of the quarter in which the sales were made.
  2. The Attorney General may require production of information sufficient to enable the Attorney General to determine the adequacy of the amount of each installment deposit.
  3. The failure of any tobacco product manufacturer to make a quarterly installment of an escrow deposit required by the Attorney General under subdivision (e)(1) of this section shall subject the tobacco product manufacturer to any penalty and other remedy provided under §§ 26-57-261 and 26-57-1303 for failure to place funds in escrow.
1. License Revocation and Civil Penalty.
  1. In addition to or in lieu of any other civil or criminal remedy provided by law, upon a determination that a licensee or permitee has violated § 26-57-1303(c) or any rule adopted under this subchapter, the Director of Arkansas Tobacco Control may revoke or suspend the licensee's licenses or permits pursuant to law and the Arkansas Tobacco Control Board's rules governing the procedure for revocation or suspension of the licenses or permits.
  2. Each tax stamp affixed to and each sale or offer to sell cigarettes in violation of § 26-57-1303(c) shall constitute a separate violation.
  3. For each violation, the board may also impose a civil penalty in an amount not to exceed the greater of five hundred percent (500%) of the retail value of the cigarettes or five thousand dollars ($5,000) upon a determination of a violation of § 26-57-1303(b) or of any rules adopted under this subchapter.
2. Contraband and Seizure. Any cigarettes that have been sold, offered for sale, or possessed for sale in this state or imported for personal consumption in this state in violation of § 26-57-1303(c) shall be deemed contraband, and the cigarettes shall be subject to seizure and forfeiture as provided in § 5-64-505, and all of the cigarettes seized and forfeited shall be destroyed and not resold.
3. Injunction.
  1. The Attorney General may seek an injunction to restrain a threatened or actual violation of § 26-57-1303(c), § 26-57-1305(a), or § 26-57-1305(d) by a licensee and to compel the licensee to comply with those provisions.
  2. In any action brought under this section, the state shall be entitled to recover the costs of investigation, costs of the action, and reasonable attorney's fees.
4. Unlawful Sale and Distribution.
  1. It is unlawful for a person to sell or distribute cigarettes or to acquire, hold, own, possess, transport, import, or cause to be imported, cigarettes that the person knows or should know are intended for distribution or sale in the state in violation of § 26-57-1303(c).
  2. A violation of this subsection is a Class A misdemeanor.
5. Deceptive and Unconscionable Trade Practice. A violation of § 26-57-1303(c) is a deceptive or unconscionable trade practice under § 4-88-101 et seq.
6. 1. In addition to any other provision of law, the Attorney General may seek a civil penalty in an amount not to exceed five hundred dollars ($500) per day for the knowing failure of a wholesaler to timely or accurately comply with § 26-57-1305(a).
  2. A civil penalty collected under this section is general revenue of the state.
1. Notice and Review of Determination.
  1. A determination by the Attorney General to not include or to remove from the directory a brand family or tobacco product manufacturer shall be subject to review by the filing of a civil action for prospective declaratory or injunctive relief.
  2. The Pulaski County Circuit Court shall have exclusive jurisdiction over the civil action.
  3. In authorizing the civil action, the state does not waive its sovereign immunity from claims for monetary relief, costs, or attorney's fees, and no such relief shall be recoverable in any such civil action.
2. Applicants for Licenses. No person or entity shall be issued a license or permit or granted a renewal of a license or permit by the Director of Arkansas Tobacco Control unless the person or entity has certified in writing under penalty of perjury that the person or entity will comply fully with this subchapter.
3. Dates. For the year 2003:
  1. The first report of wholesalers required by § 26-57-1305(a) shall be due thirty (30) calendar days after April 3, 2003;
  2. The certifications by a tobacco product manufacturer described in § 26-57-1303(a) shall be due forty-five (45) calendar days after April 3, 2003; and
  3. The directory described in § 26-57-1303(b) shall be published or made available within ninety (90) calendar days after April 3, 2003.
4. Promulgation of Rules. The Attorney General, the Arkansas Tobacco Control Board, and the Department of Finance and Administration may promulgate rules necessary to effect the purposes of this subchapter.
5. Recovery of Costs and Fees by Attorney General. In an action brought by the Attorney General to enforce this subchapter, the Attorney General shall be entitled to recover the costs of the investigation, expert witness fees, costs of the action, and reasonable attorney's fees.
6. Disgorgement of Profits for Violations of Subchapter.
  1. If a court determines that a person or entity has violated this subchapter, the court shall order any profits, gain, gross receipts, or other benefit from the violation to be disgorged and paid to the Treasurer of State for deposit into the State Central Services Fund.
  2. Unless otherwise expressly provided, the remedies or penalties provided by this subchapter are cumulative to each other and to the remedies or penalties available under all other laws of this state.
7. Construction and Severability.
  1. If a court of competent jurisdiction finds that the provisions of this subchapter and of §§ 26-57-260 and 26-57-261 conflict and cannot be harmonized, the provisions of §§ 26-57-260 and 26-57-261 shall control.
  2. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this subchapter causes §§ 26-57-260 and 26-57-261 to no longer constitute a qualifying or model statute as those terms are defined in the Master Settlement Agreement, that portion of this subchapter shall not be valid.
  3. If any section, subsection, subdivision, paragraph, sentence, clause, or phrase of this subchapter is for any reason held to be invalid, unlawful, or unconstitutional, the decision shall not affect the validity of the remaining portions of this subchapter or any part of this subchapter.
8. For each nonparticipating manufacturer located outside the United States, each importer into the United States of the nonparticipating manufacturer's brand families that are sold in the state has joint and several liability with the nonparticipating manufacturer for deposit of all escrow amounts due under § 26-57-261 and payment of all penalties imposed under § 26-57-261.
1. If a newly qualified nonparticipating manufacturer is to be listed in the directory maintained by the Attorney General under § 26-57-1303 or if the Attorney General determines that a nonparticipating manufacturer who has filed a certification under § 26-57-1303 poses an elevated risk for noncompliance with either § 26-57-1305 or §§ 26-57-260 and 26-57-261, the nonparticipating manufacturer and the nonparticipating manufacturer's brand families shall not be included in the directory unless the nonparticipating manufacturer or its United States importer that undertakes joint and several liability for the nonparticipating manufacturer's performance under § 26-57-1307 has posted a bond in accordance with this section.
2. 1. The bond required under subsection (a) of this section shall be posted by corporate surety located within the United States in an amount equal to the greater of fifty thousand dollars ($50,000) or the amount of escrow the manufacturer in either its current form or predecessor form was required to deposit as a result of its previous two (2) calendar quarters sales in the state.
  2. The bond required under subsection (a) of this section shall be written in favor of the state and shall be conditioned on the performance by the nonparticipating manufacturer or its United States importer that undertakes joint and several liability for the manufacturer's performance under § 26-57-1307 of all of the nonparticipating manufacturer's duties and obligations under § 26-57-1305 or §§ 26-57-260 and 26-57-261.
3. A nonparticipating manufacturer may be deemed to pose an elevated risk for noncompliance with this section if:
  1. The nonparticipating manufacturer or any affiliate thereof has underpaid an escrow obligation with respect to any state during the calendar year or within the past three (3) calendar years unless:
    1. The manufacturer did not knowingly or recklessly make an underpayment, and the manufacturer promptly cured the underpayment within one hundred eighty (180) days of receiving the notice of the underpayment; or
    2. The underpayment or lack of payment is the subject of a good faith dispute as documented to the satisfaction of the Attorney General, and the underpayment is cured within one hundred eighty (180) days of entry of a final order establishing the amount of the required escrow payment;
  2. A state has removed the manufacturer, the manufacturer's brands or brand families, an affiliate of the manufacturer, or any of the affiliate's brands or brand families from the state's tobacco directory for noncompliance with the state's law during the calendar year or within the past three (3) calendar years; or
  3. A state has litigation pending against, or an unsatisfied judgment against, the manufacturer or any affiliate of the manufacturer for escrow, penalties, costs, or attorney's fees related to noncompliance with state escrow laws.
4. A newly qualified nonparticipating manufacturer may be required to post a bond under this section for the first three (3) years of the newly qualified nonparticipating manufacturer's listing or longer if the newly qualified nonparticipating manufacturer has been deemed to pose an elevated risk for noncompliance.
1. The General Assembly finds that:
  1. In 2009, the Office of the Inspector General of the United States Department of Justice concluded that tobacco diversion costs the federal and state governments approximately five billion dollars ($5,000,000,000) in revenue from unpaid taxes annually;
  2. The primary reason that tobacco diversion is profitable is the disparity among the states' excise taxes;
  3. Purchasing cigarettes in a state with low tax rates and illegally reselling the cigarettes in a state with high tax rates can yield enormous profits for the people engaging in the scheme; and
  4. As further recognized by the United States Department of Justice, the diversion of tobacco can occur anywhere in the supply chain, including diversion by manufacturers, wholesalers, and retail outlets.
2. 1. This subchapter is intended to provide information to the Department of Finance and Administration, the Arkansas Tobacco Control Board, and the Attorney General regarding the sale, transfer, and shipment of cigarette, roll-your-own, and other tobacco products.
  2. With the data provided under this subchapter, the state will be in a better position to prevent tobacco diversion and prevent cigarettes from being sold to young people and an already addicted adult population.
1. Within fifteen (15) days following the end of the month in which cigarettes were acquired, sold, possessed, transferred, or transported, a person that acquires, purchases, sells, possesses, transfers, transports, or causes to be transported in or into the state cigarettes of a manufacturer or brand family that are not on the directory of cigarettes approved for stamping and sale maintained by the Attorney General under § 26-57-1303 shall:
  1. File a report on the form prescribed by the Attorney General; and
  2. Certify to the state that the report is complete and accurate.
2. The report required under subsection (a) of this section shall contain the following information:
  1. 1. The total number of cigarettes.
    2. The following information shall be identified by name and number of cigarettes:
      1. The manufacturer of the cigarettes;
      2. The brand family of the cigarettes;
      3. In the case of a sale or transfer, the name and address of the recipient of the cigarettes;
      4. In the case of an acquisition or purchase, the name and address of the seller or sender of the cigarettes; and
      5. Each state directory on which the manufacturer and brand family of the cigarettes are listed and each state for which the person is authorized to affix stamps;
  2. 1. 1. In the case of acquisition, purchase, or possession, the details of the person's subsequent sale or transfer of the cigarettes.
      2. The following details shall be identified by name and number of cigarettes:
        
        The brand family of the cigarettes;
        
        The date of the sale or transfer;
        
        The name and address of the recipient;
        
        The number of stamps of each state other than Arkansas that the person affixed to the package containing the cigarettes;
        
        The total number of cigarettes contained in the package to which the person affixed a stamp from each state other than Arkansas;
        
        The manufacturer and brand family of the package to which the person affixed a stamp from any state other than Arkansas; and
        
        Within fifteen (15) days following the end of the month in which the sale or transfer was made, a certification that the person reported each sale or transfer to the taxing authority of each state other than Arkansas, including a copy of the reports attached to the certification.
    2. If the subsequent sale or transfer of the cigarettes is from Arkansas into another state in a package not bearing a stamp of the other state, the report described in this section shall also contain the information required under § 26-57-1405(b)(3); and
  3. Any further information that the Attorney General may require to assist the state in enforcing this subchapter, the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., §§ 26-57-260 and 26-57-261, and §§ 26-57-1301 — 26-57-1308.
3. Reports required under this section are in addition to other reports required under this subchapter, the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., and §§ 26-57-261, 26-57-1303, and 26-57-1305.
4. The Attorney General may share the information reported under this section with the taxing authority or law enforcement agency of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the data.
1. Within fifteen (15) days following the end of each month, each manufacturer and importer that sells cigarettes in or into the state shall:
  1. File a report on the form prescribed by the Attorney General; and
  2. Certify to the state that the report is complete and accurate.
2. 1. The report required under subsection (a) of this section shall contain the total number of cigarettes sold by the manufacturer or importer in or into the state during the month.
  2. The following information shall be identified by name and number of cigarettes:
    1. The manufacturer of the cigarettes;
    2. The brand family of the cigarettes; and
    3. The purchaser of the cigarettes.
  3. A manufacturer's or importer's report under this section shall include cigarettes sold in or into the state through each sales entity affiliate, if any.
3. No further report is required under this section with respect to cigarettes if:
  1. In the case of a manufacturer or importer, the manufacturer or importer timely submits to the Attorney General the required reports with respect to cigarettes under the Prevent All Cigarette Trafficking Act of 2009, Pub. L. No. 111-154, and certifies to the state that the reports are complete and accurate; or
  2. In the case of a wholesaler, the wholesaler timely submits the report required by § 26-57-265 to the Director of Arkansas Tobacco Control and the report separately lists the deliveries to retailers and other wholesalers in this state by cigarettes, roll-your-own, and other tobacco products.
4. Upon request by the Attorney General, a manufacturer or importer shall provide a copy of each report that:
  1. Is similar to the report required under this section; and
  2. Was filed by the manufacturer or importer in a state other than Arkansas.
5. Each manufacturer and importer that sells cigarettes in or into the state shall either:
  1. Submit the manufacturer's or importer's federal returns to the Attorney General within sixty (60) days after the close of the quarter in which the returns were filed; or
  2. Submit to the United States Department of the Treasury a request or consent under 26 U.S.C. § 6103(c), as in effect on January 1, 2011, authorizing the United States Alcohol and Tobacco Tax and Trade Bureau and, in the case of a foreign manufacturer or importer, the United States Customs and Border Protection, to disclose the manufacturer's or importer's federal returns to the Attorney General within sixty (60) days after the close of the quarter in which the returns were filed.
6. The Attorney General may share the information reported under this section with the taxing authority or law enforcement agency of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the data.
1. Within fifteen (15) days following the end of each month, a person that sells cigarettes from Arkansas into another state shall:
  1. File a report on the form prescribed by the Attorney General; and
  2. Certify to Arkansas that the report is complete and accurate.
2. The report required under subsection (a) of this section shall contain the following information:
  1. 1. The total number of cigarettes sold from Arkansas into another state by the person during the month.
    2. The following information shall be identified by name and number of cigarettes:
      1. The manufacturer of the cigarettes;
      2. The brand family of the cigarettes; and
      3. The name and address of each recipient of the cigarettes;
  2. The number of stamps of each state other than Arkansas that the person affixed to each package containing cigarettes;
  3. The total number of cigarettes contained in each package to which the person affixed a stamp from a state other than Arkansas; and
  4. The manufacturer and brand family of each package to which the person affixed a stamp from a state other than Arkansas.
3. 1. If a person sells cigarettes during the month from Arkansas into another state in a package not bearing a stamp of the other state, the report required under subsection (a) of this section shall also include the following:
    1. 1. The total number of cigarettes contained in each package.
      2. The following information shall be identified by name and number of cigarettes:
        
        The manufacturer of the cigarettes;
        
        The brand family of the cigarettes; and
        
        The name and address of each recipient of the cigarettes;
    2. The person's basis for belief that the state permits the sale of cigarettes to consumers in a package not bearing a stamp; and
    3. The amount of excise tax, use tax, or similar tax imposed on the cigarettes and paid by the person to the state on the cigarettes.
  2. A manufacturer or importer shall include the information described in subdivisions (c)(1)(B) and (C) of this section only as to cigarettes not sold to a person authorized by the law of the other state to affix the stamp required by the other state.
4. 1. For a manufacturer or importer, the report required under this section shall include cigarettes sold from Arkansas into another state through a sales entity affiliate.
  2. A sales entity affiliate shall file a separate report under this section only to the extent that the sales entity affiliate sold cigarettes from Arkansas into another state that were not separately reported under this section by the affiliated manufacturer or importer.
5. The report required under this section shall also include reports filed with the taxing authority of each state other than Arkansas into which the cigarettes were sold.
6. The Attorney General may share the information reported under this section with the taxing authority or law enforcement agency of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the data.
1. 1. A manufacturer that fails to file a complete and accurate report required under this subchapter may cure the failure within thirty (30) days.
  2. If a manufacturer fails to fully cure a failure during the thirty-day period, the manufacturer and the manufacturer's brand families shall be removed from the directory of cigarettes approved for stamping and sale maintained by the Attorney General under § 26-57-1303.
2. 1. A person that is not a stamp deputy or manufacturer that fails to file a complete and accurate report under this subchapter may cure the failure within thirty (30) days.
  2. If a person that is not a stamp deputy or manufacturer fails to fully cure a failure during the thirty-day period, the person is subject to a civil penalty of up to one thousand dollars ($1,000) per violation and is ineligible to hold any license, appointment, or commission of the state regarding cigarette sales for:
    1. Ninety (90) days for the first failure;
    2. One hundred eighty (180) days for the second failure; and
    3. One (1) year for the third and subsequent failures.
1. The tax levied by § 26-57-1504 shall be paid by the cultivation facility, dispensary, or other marijuana business when the usable marijuana is sold.
2. The cultivation facility, dispensary, or other marijuana business subject to this tax shall file a monthly return and remit the tax for the month to the Secretary of the Department of Finance and Administration on or before the twentieth day of the month next following the month in which the sale or purchase was made.
3. 1. The return shall be filed with the Department of Finance and Administration through the Arkansas Taxpayer Access Point electronic filing system, or its successor.
  2. The return shall contain such information as the secretary requires for the proper administration of this subchapter.
  3. Payment shall be made through the Arkansas Taxpayer Access Point, or its successor, when cultivation facilities, dispensaries, or other marijuana businesses are authorized to use federal banking systems.
1. A person that is entitled to claim a sales and use tax exemption under § 26-52-401(41) shall pay the fee required under § 26-57-1603 in lieu of paying the sales tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the compensating use tax under the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., on the exempt products and services.
2. A car wash operator that is required to pay a fee under § 26-57-1603 shall register electronically with the Secretary of the Department of Finance and Administration before an automatic car wash or a car wash tunnel is made available for commercial use.
3. The electronic registration form provided for in this section shall:
  1. Be in the form prescribed by the secretary; and
  2. Contain the information required by rules adopted by the secretary to implement this subchapter.
1. A car wash operator that uses water from a public water system shall pay to the Secretary of the Department of Finance and Administration the following fee by the twentieth day of each month:
  1. For car wash tunnels, the car wash operator shall calculate the monthly fee due under this subsection as follows:
    1. Multiply by eight-tenths (0.8) the total aggregate number of gallons of water the car wash operator used during the preceding month for all of the car wash operator's car wash tunnels; and
    2. Multiply the product obtained under subdivision (a)(1)(A) of this section by four-tenths of one cent (0.4¢); and
  2. For automatic car washes, the car wash operator shall calculate the monthly fee due under this subsection as follows:
    1. Multiply by eight-tenths (0.8) the total aggregate number of gallons of water the car wash operator used during the preceding month for all of the car wash operator's automatic car washes; and
    2. Multiply the product obtained under subdivision (a)(2)(A) of this section by two-tenths of one cent (0.2¢).
2. A car wash operator shall pay the fees required under this section electronically in the form and method prescribed by the Department of Finance and Administration.
1. 1. Each fee levied under this subchapter is a state tax as that term is defined in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
  2. The Arkansas Tax Procedure Act, § 26-18-101 et seq., so far as is practicable, is applicable to the fees levied under this subchapter and to the reporting, remitting, and enforcement of the fees.
2. The Secretary of the Department of Finance and Administration shall adopt rules to implement and administer this subchapter.
1. The tax levied in this subchapter is a “state tax” as that term is defined in the Arkansas Tax Procedure Act, § 26-18-101 et seq.
2. The provisions of the Arkansas Tax Procedure Act, § 26-18-101 et seq., shall so far as practicable be applicable to the tax levied by this subchapter and to the reporting, remitting, and enforcement of the tax.
1. 1. Any individual or firm desiring to engage in the business of severing natural resources or timber before entering the business shall make application to the Secretary of the Department of Finance and Administration for a license or permit.
  2. In a form of application to be prescribed by the secretary, the applicant shall state under oath his or her name and address, the business in which he or she desires to engage, and the counties in which he or she will carry on the proposed severing.
2. The applicant shall be deemed by his or her application to have agreed:
  1. To abide by the provisions of this subchapter;
  2. To promptly pay when due the severance tax imposed by this subchapter; and
  3. That the severance tax imposed by this subchapter shall constitute and remain a lien on each unit of production until the severance tax is paid to the secretary.
3. Upon the filing of the application, the secretary shall issue a permit for which no charge shall be made.
4. Whoever shall engage in the business of severing natural resources or timber without first having made application for and securing the license or permit to engage in the business shall be guilty of a violation and upon conviction shall be fined not less than fifty dollars ($50.00) nor more than five hundred dollars ($500).
1. There is levied and there shall be collected from each producer of natural resources and each producer of timber in the State of Arkansas, a privilege or license tax to be known as “severance tax”.
2. The severance tax is to be paid to the Secretary of the Department of Finance and Administration.
1. In addition to the tax levied by § 26-58-107, there is levied an additional severance tax on coal in the amount of eight cents (8¢) per ton of two thousand pounds (2,000 lbs.). The additional tax shall be collected in the same manner as prescribed by this subchapter.
2. The additional tax shall be deposited into the State Treasury to the credit of the Constitutional Officers Fund and the State Central Services Fund.
1. There is levied and there shall be collected from each producer of the following natural resources in this state an additional privilege or license tax to be known as an additional severance tax.
2. The additional severance tax is to be paid to the Secretary of the Department of Finance and Administration.
3. The additional severance tax on stone and crushed stone, including but without limitation thereto, chert, granite, slate, novaculite and limestone, excluding limestone used for agricultural purposes, construction sand, gravel, clay, chalk, shale, and marl, is to be predicated upon the quantity severed at the rate of three cents (3¢) per ton.
4. The tax levied by this section shall be in addition to the severance tax levied by § 26-58-107.
5. 1. All taxes, penalties, and costs collected by the secretary under the provisions of this section shall be deposited into the State Treasury to the credit of the State Apportionment Fund.
  2. The Treasurer of State on or before the fifth of the month next following the month during which such funds shall have been received by him or her shall allocate the same in the manner provided in this subdivision (e)(2):
    1. Three percent (3%) of the amount thereof to the General Revenue Fund Account to be used for defraying the necessary expenses of the state government; and
    2. Ninety-seven percent (97%) of the amount thereof, as follows:
      1. Twenty-five percent (25%) of such amount of the severance taxes, penalties, and costs, except those on timber and timber products, shall be special revenues and shall be allocated to the County Aid Fund.
        
        On or before the tenth of the month following the end of each calendar quarter, the Treasurer of State shall remit by state warrants to the various county treasurers all such funds received by the Treasurer of State during such quarterly period and transferred to the County Aid Fund in the proportions thereof as between the respective counties that, as certified by the secretary to the Treasurer of State, the total severance tax produced from each such county bears to the total of such taxes produced from all counties.
        
        Upon receipt of any such taxes, each county treasurer shall credit fifty percent (50%) of that amount to the county general school fund and fifty percent (50%) of that amount to the county highway fund, for use for the same purposes as other moneys credited to the respective said future funds; and
      2. Seventy-five percent (75%) shall be special revenues and shall be credited to the County Aid Fund.
        
        On or before the tenth of the month following the end of each calendar quarter these special revenues shall be remitted by the Treasurer of State by state warrant to the various county treasurers on the basis of the formula applied in allocating or distributing county aid highway funds from the County Aid Fund.
        
        All such funds so received by each county shall be used exclusively for construction, reconstruction, maintenance, and repair of county roads and bridges in the county.
6. The additional severance taxes levied by this section shall be collected in the manner prescribed by this subchapter.
7. The violation of this section shall subject the violator to the penalties prescribed by this subchapter.
1. 1. Each producer of natural resources, excluding natural gas, and each primary processor of timber, whether or not he or she shall have actually severed natural resources, excluding natural gas, or processed timber during the preceding month, shall file a report within twenty-five (25) days after the end of each month with the Secretary of the Department of Finance and Administration in a form prescribed by the secretary that states:
    1. The kind of natural resources or timber, if any, severed by such producer or processed or acquired for processing by the primary processor during the next preceding month;
    2. The point of severance;
    3. The gross quantity severed and the cash value;
    4. The amount of severance tax due; and
    5. Any other information as the secretary may reasonably require for the enforcement of this subchapter.
  2. 1. When the average amount of severance tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed one hundred dollars ($100) per month, the secretary may notify the taxpayer that a quarterly report and remittance in lieu of a monthly report may be made.
    2. Each quarterly report and remittance shall be due on or before the twenty-fifth day of the month following the last month of the quarter for which the report is made, respectively January 25, April 25, July 25, and October 25 of each year.
  3. When the average amount of severance tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed twenty-five dollars ($25.00) per month, the secretary may notify the taxpayer that an annual report and remittance in lieu of a monthly report may be made on or before January 25 of each year for the preceding calendar year.
2. 1. 1. A producer of natural gas shall file with the secretary a report, in a form or forms prescribed by the secretary, that states:
      1. The natural gas, if any, severed by the producer for each calendar month;
      2. The point of severance;
      3. The gross quantity severed and the market value;
      4. The amount of severance tax due; and
      5. Any other information as the secretary may reasonably require for the enforcement of this subchapter.
    2. The producer shall file the monthly report required under subdivision (b)(1)(A) of this section on or before the twenty-fifth day of the second month following the month that is covered by the report.
    3. The producer is required to file a report with the secretary for each month whether or not the producer has actually severed natural gas during the month.
  2. 1. When the average amount of severance tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed one hundred dollars ($100) per month, the secretary may notify the taxpayer that a quarterly report and remittance in lieu of a monthly report may be made.
    2. Each quarterly report and remittance shall be due on or before the twenty-fifth day of the second month following the last month of the quarter for which the report is made, respectively February 25, May 25, August 25, and November 25 of each year.
  3. When the average amount of severance tax for which the taxpayer is liable for the previous fiscal year beginning on July 1 and ending on June 30 does not exceed twenty-five dollars ($25.00) per month, the secretary may notify the taxpayer that an annual report and remittance in lieu of a monthly report may be made on or before February 25 of each year for the preceding calendar year.
3. The report shall be verified by the producer or primary processor himself or herself in the instance of an individual producer or primary processor and by a member or officer or the manager of the producer or primary processor in all other instances.
4. The payment of the full amount of the severance tax due from the report shall accompany the report.
5. 1. Within ten (10) days after any producer or primary processor ceases operation with the intention of no longer engaging in the business of severing or processing natural resources or timber, the permit issued shall be returned by him or her to the secretary for cancellation.
  2. A producer or processor whose permit is cancelled under subdivision (e)(1) of this section may reengage in the business of severing or processing natural resources or timber after filing a new application with the secretary and receiving a new permit by the secretary.
6. 1. Upon conviction, a producer or primary processor who fails to comply with this section is guilty of a violation and shall be fined not less than one hundred dollars ($100) nor more than five hundred dollars ($500) for each offense.
  2. Upon conviction, a person knowingly making a false material statement in a report required by this section is guilty of perjury under § 5-53-102.
1. Except as otherwise provided in this subchapter, the report required by § 26-58-114 shall be filed and the payment of the severance tax shall be made by the producer actually severing the natural resources whether as owner, lessee, concessionaire, or contractor and, in the case of severance taxes on timber, the report required by § 26-58-114 shall be filed and the severance tax shall be paid by the primary processor.
2. The reporting taxpayer shall collect or withhold out of the proceeds of the sale of the natural resources severed the proportionate parts of the total severance tax due by the respective owners of the natural resources at the time of severance.
3. Every producer actually operating any oil or gas well, quarry, or other property from which natural resources are severed but under contract or other obligation in which direct payment to the owner of any royalty, excess royalty, or working interest, either in money or in kind is required, is authorized, empowered, and required to deduct the amount of the severance tax in respect thereto from any such royalty or other interest before making the direct payment.
4. Notwithstanding the sale or delivery, all severed oil or gas sold or delivered to any pipeline company for transportation by it through pipes connected with the oil or gas well of the owner is subject to the severance tax on the severed oil or gas.
5. A primary processor of timber shall be responsible for the payment of severance taxes on all timber processed or acquired for processing by him or her whether or not the primary processor collects or withholds the tax from the producer.
6. Any producer or primary processor failing or refusing to comply with any provision of this section shall be guilty of a violation and upon conviction shall be fined in any sum not less than one hundred dollars ($100) nor more than five hundred dollars ($500) for each offense.
1. Unless a purchaser of natural resources, excluding natural gas, is excused in writing by the Secretary of the Department of Finance and Administration in advance of the report filing deadline from filing a report, a purchaser of natural resources, excluding natural gas, shall file with the secretary a verified report within twenty (20) days after the end of each reporting period in a form or forms prescribed by the secretary that states:
  1. The names and addresses of all producers from whom the purchaser has acquired natural resources during the respective reporting period;
  2. The types and total quantity of each type of the natural resources acquired and the purchase price; and
  3. Any other information as the secretary reasonably may require for the proper enforcement of this subchapter.
2. 1. Unless a purchaser of natural gas is excused in writing by the secretary in advance of the report filing deadline from filing a report, a purchaser of natural gas shall file with the secretary a report in a form or forms prescribed by the secretary that states:
    1. The names, addresses, and severance tax permit numbers of all producers from whom the purchaser has purchased natural gas during each reporting period;
    2. The total quantity of natural gas acquired and the purchase price; and
    3. Any other information as the secretary may reasonably require for the proper enforcement of this subchapter.
  2. The purchaser of natural gas shall file each report required under this subsection on or before the twenty-fifth day of the second month following the reporting period that is covered by the report.
3. 1. It is the duty of each purchaser of natural resources, excluding natural gas, to ascertain in advance of permitting the natural resources so purchased to be processed or otherwise changed from the natural state thereof at the time of severance or to be transported for the purpose of such processing or other change that the severance tax upon the natural resources has been paid.
  2. Each purchaser of natural gas shall determine in advance of filing the report under subsection (b) of this section that each producer from whom the purchaser has purchased natural gas has been issued a severance tax permit number and furnish the secretary the severance tax permit number of each producer under subsection (b) of this section.
  3. 1. The purchaser of natural resources, excluding natural gas, is primarily liable for any unpaid severance tax in the event of failure to make such advance ascertainment.
    2. Each purchaser of natural gas is primarily liable for any unpaid severance tax that is attributable to a producer from whom the purchaser purchased natural gas if the purchaser fails to furnish the secretary with all of the information required in subsection (b) of this section.
  4. However, the purchaser as a condition to permitting the processing or other change of such natural resources, excluding natural gas, as to which the severance tax shall not have been paid by the producer may himself or herself pay such tax either in advance or, with the advance written approval of the secretary for cause shown to the secretary, within twenty (20) days after commencing the processing or other change of the natural resources or the transportation thereof for such purpose.
4. 1. Unless the secretary has given advance written approval for the removal under subsection (a) of this section, the removal by the purchaser of natural resources, excluding natural gas, to any point of concentration or assembly, either inside or outside the state, without the severance tax having been previously paid by the producer or the purchaser is a fraudulent concealment of the location of the natural resources with the intent to avoid the payment of the severance tax.
  2. Unless the secretary has given advance written approval for the removal, the removal by the producer, purchaser, or primary processor of any timber to any point outside the state without the severance tax having been paid on the timber is unlawful.
5. 1. Upon conviction, each removal described in subdivision (d)(1) of this section by the purchaser of natural resources, excluding natural gas, is a violation punishable by a fine of at least fifty dollars ($50.00) and not more than five hundred dollars ($500).
  2. Upon conviction, each removal described in subdivision (d)(2) of this section by a producer, purchaser, or primary processor is a violation punishable by a fine of at least fifty dollars ($50.00) and not more than five hundred dollars ($500).
  3. Upon conviction, each failure by a producer, purchaser, including a purchaser of natural gas, or primary processor to file a report required by this section is a violation punishable by a fine of at least fifty dollars ($50.00) and not more than five hundred dollars ($500).
  4. Upon conviction, a person knowingly making a false material statement in a report required by this section is guilty of perjury under § 5-53-102.
1. 1. Notwithstanding the provisions of §§ 26-58-114 and 26-58-116, either the producer or severer of natural resources, excluding natural gas, or the purchaser of natural resources, excluding natural gas, shall report and pay severance taxes thereon as required in §§ 26-58-114 and 26-58-116.
  2. However, if either the producer or severer of natural resources, excluding natural gas, or the purchaser of natural resources, excluding natural gas, files the report as required in §§ 26-58-114 and 26-58-116 and pays the severance taxes during any reporting period, the other shall be relieved of the responsibility of filing such report.
2. Both the producer of natural gas and the purchaser of natural gas shall be required to file their reports under §§ 26-58-114 and 26-58-116.
1. All transporters of natural resources, save and except only pipeline transporters, whenever and as often as requested by the Secretary of the Department of Finance and Administration shall furnish a report under oath and upon forms prescribed by secretary setting forth:
  1. The name of the shipper;
  2. The date of shipment;
  3. The quantity and type or character of such natural resources stated in units of measurements applicable thereto;
  4. The point of receipt for shipment and point of destination; and
  5. All such further information relating to the transportation of the natural resources as the secretary may reasonably require for the proper enforcement of the provisions of this subchapter.
2. Any transporter failing to furnish the transporter's report as provided by this section shall be punished by fine of not less than fifty dollars ($50.00) and not more than five hundred dollars ($500) for each such offense.
3. The willful false swearing in any report which may be furnished by the transporter in respect to any matter set forth in the report shall constitute perjury and shall be punishable as such.
1. 1. In the event any producer or purchaser of natural resources or any primary processor of timber fails within the time provided for in this subchapter to file the verified reports required of them respectively, or in the event that the Secretary of the Department of Finance and Administration is not satisfied of the correctness of the reports as filed with the secretary, or in the event any such producer or purchaser of natural resources or any primary processor of timber fails to pay all taxes due as provided in §§ 26-58-114 and 26-58-116, it shall be the duty of the secretary to ascertain the true amount and value of the natural resources or timber severed and to assess the severance tax based thereon.
  2. For the purposes thereof the secretary is authorized to require either the producer or purchaser or both of them, or the primary processor, to furnish the secretary with such information, or further information, as the secretary may deem necessary and to require the production, at such place as the secretary may designate, of the books, records, and files of the producer and the purchaser or primary processor and to examine them and to take testimony of witnesses.
  3. 1. The secretary shall assess a penalty equal to fifty percent (50%) of the amount of the severance tax, including the cost and expense of assessing the penalty, and shall make demand for payment of the penalty upon both the producer of natural resources and the purchaser of natural resources to the extent liability for the tax may be imposed on the purchaser under § 26-58-116 or the primary processor of timber, as the case may be.
    2. The penalty assessment under subdivision (a)(3)(A) of this section shall not apply to any estimated severance tax payment that is made in good faith by a producer of natural gas or a purchaser of natural gas.
2. 1. If the producer, purchaser, or primary processor or any other such witness willfully fails to appear or to produce such books, records, and files before the secretary, in obedience to the secretary's request, the secretary shall certify the name of the reluctant producer, purchaser, primary processor, or other witness, with a statement of the circumstances to the circuit court of the county having jurisdiction over the person.
  2. The court shall thereupon issue a subpoena commanding the producer, purchaser, primary processor, or other witness to appear before the secretary, at a place designated, on a day fixed, to be continued as occasion may require, and to give such evidence, and to produce for inspection such books and papers as may be required by the secretary for a proper determination of the amount of taxes due.
  3. The court may hear and punish any contempt of such subpoena brought to the court's attention by the secretary.
1. 1. The Arkansas Forestry Commission and the authorized representatives of the commission shall have access to all tax returns and other information and records of the Secretary of the Department of Finance and Administration related to the reporting and payment of taxes levied upon timber by this subchapter.
  2. The commission shall furnish the secretary in writing the names of the forestry personnel who are authorized to have access to the timber tax records.
  3. The commission and its authorized representatives shall at all times maintain the confidentiality of such information and records.
2. The commission is authorized to employ such persons as may be authorized by appropriation of the General Assembly to conduct inspections and investigations of primary processors of timber in order to determine whether such processors are properly reporting and paying the taxes levied in this subchapter.
3. The inspections or investigations to be made by commission personnel shall consist of a physical inspection of the business operation of any primary processor of timber and a request for proof that the processor holds a severance tax collection permit issued under this subchapter but shall not include an in-depth or comprehensive examination of the records of the processor.
4. If after completion of the inspection or investigation of a timber processor the commission finds that a timber processor is not collecting or remitting all taxes due under the provisions of this subchapter, the commission shall so advise the secretary and shall furnish the secretary the information upon which such finding is based.
1. 1. In the event that the Arkansas Forestry Commission determines that any individual or corporation has failed to pay all severance taxes due to the commission, the commission shall certify the commission's findings to the Revenue Division of the Department of Finance and Administration.
  2. Upon receipt thereof, the Secretary of the Department of Finance and Administration shall immediately conduct an investigation of such matter.
  3. Within thirty (30) days of receipt of the certification, the secretary shall report all findings to the commission.
2. If the secretary determines that all severance taxes due the commission are not being or have not been paid, the secretary shall immediately proceed to institute any legal action necessary to collect such tax.
3. 1. In the event the secretary fails to report to the commission within the time specified or the commission disagrees with the findings of the secretary, the State Forester shall file with the Governor, the Legislative Council, and the House Committee on Revenue and Taxation and the Senate Committee on Revenue and Taxation a report of the matter.
  2. The Governor shall then conduct an investigation into such failure to report by the secretary or disagreement as to tax liability with the commission, take whatever measures the Governor deems necessary to rectify the situation, and shall notify the Legislative Council and the House Committee on Revenue and Taxation and the Senate Committee on Revenue and Taxation of the Governor's decision.
1. All taxes, penalties, and costs collected by the Secretary of the Department of Finance and Administration under the provisions of this subchapter, except for the taxes, penalties, and costs collected on natural gas, shall be deposited into the State Treasury to the credit of the State Apportionment Fund.
2. On or before the fifth of the month next following the month during which funds under subsection (a) of this section shall have been received by the Treasurer of State, the Treasurer of State shall allocate the funds in the following manner:
  1. Three percent (3%) of the amount of the funds to the General Revenue Fund Account of the State Apportionment Fund to be used for defraying the necessary expenses of the state government; and
  2. Ninety-seven percent (97%) of the amount of the funds, as follows:
    1. 1. All of such amount of severance taxes, penalties, and costs on timber and timber products shall be credited to the State Forestry Fund until there has been distributed to the State Forestry Fund an amount not less than the total amount of severance taxes, penalties, and costs on timber and timber products distributed to the State Forestry Fund during the fiscal year ending June 30, 1980, plus an additional amount of two million dollars ($2,000,000) of the funds, to be used exclusively for the purpose of carrying out the functions and duties of the Arkansas Forestry Commission.
      2. The next three hundred fifty thousand dollars ($350,000) or so much of the funds as may be collected in severance taxes, penalties, and costs on timber and timber products, over and above the amount distributed to the State Forestry Fund during each fiscal year as provided in subdivision (b)(2)(A)(i) of this section, shall be distributed and credited to the University of Arkansas at Monticello Fund.
        
        The University of Arkansas at Monticello shall transfer from general revenue to cash funds any timber severance tax funds as provided in this subdivision (b)(2)(A)(ii), to be set aside therein to be used solely and exclusively for providing additional support for the College of Forestry, Agriculture and Natural Resources of the University of Arkansas at Monticello, as per the intent of this subdivision (b)(2)(A)(ii).
      3. All of such amount of severance taxes, penalties, and costs on timber and timber products collected during each fiscal year in excess of the amounts required to be distributed for each fiscal year as provided in subdivisions (b)(2)(A)(i) and (ii) of this section shall be distributed to the State Forestry Fund to be used exclusively for the support of carrying out the functions and duties of the Arkansas Forestry Commission;
    2. Seventy-five percent (75%) of the amount of the severance taxes and penalties on diamonds shall be credited to the Arkansas State Parks Trust Fund to be used by the State Parks, Recreation, and Travel Commission for the preservation and protection of the natural resources of this state;
    3. Seventy-five percent (75%) of the amount of the severance taxes and penalties, except those on timber and timber products and except those on diamonds, shall be general revenues and shall be allocated to the various State Treasury funds participating in general revenues in the respective proportions to each as provided by and to be used for the respective purposes set forth in the Revenue Stabilization Law, § 19-5-101 et seq.; and
    4. 1. Twenty-five percent (25%) of such amount of the severance taxes and penalties, and costs, except those on timber and timber products, shall be special revenues and shall be allocated to the County Aid Fund.
      2. On or before the tenth of the month following the end of each calendar quarter, the Treasurer of State shall remit by state warrants to the various county treasurers all funds under subdivision (b)(2)(D)(i) of this section then received by him or her during the quarterly period and transferred to the County Aid Fund in the proportions of the funds as between the respective counties that, as certified by the secretary to the Treasurer of State, the total severance tax produced from each respective county bears to the total of the taxes produced from all counties.
      3. Upon receipt of any taxes under this subdivision (b)(2)(D), each county treasurer shall credit fifty percent (50%) of the amount to the county public school fund and fifty percent (50%) of the amount to the county highway fund for use for the same purposes as other moneys credited to the respective future funds.
3. All taxes, penalties, and costs collected by the secretary on natural gas shall be deposited into the State Treasury as follows:
  1. The first six hundred seventy-five thousand dollars ($675,000) collected each fiscal year shall be deposited as general revenues;
  2. 1. Five percent (5%) of the remainder shall be deposited as special revenues into the Road and Bridge Repair, Maintenance, and Grants Fund to be used exclusively for grants to counties for damages resulting from trucks and other heavy machinery used in the extraction of natural gas.
    2. The grants awarded under subdivision (c)(2)(A) of this section shall be distributed to counties on a pro rata basis based on the number of active unconventional natural gas wells located within each county; and
  3. Ninety-five percent (95%) of the remainder shall be classified as special revenues and shall be distributed as set forth in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
1. The rate of the severance tax on lead ore shall be fifteen cents (15¢) per ton of two thousand pounds (2,000 lbs.) or at ten percent (10%) of market value, whichever rate is the greater.
2. The severance tax rate for lead ore under this section shall be in lieu of any rate which would otherwise be applicable under § 26-58-111.
3. The severance tax on lead ore shall be distributed in the same manner as the severance tax on other ores, as provided by § 26-58-124.
1. 1. The one-and-one-half-percent severance tax rate on new discovery gas shall apply to the first twenty-four (24) consecutive calendar months beginning on the date of first production from the new discovery gas well, regardless of whether production commenced prior to January 1, 2009; provided, however, that all production attributable to the period prior to January 1, 2009, shall be taxed at the rate in effect prior to January 1, 2009.
  2. At the end of the twenty-four-month period, the severance tax rate under § 26-58-111(5)(C) or § 26-58-111(5)(D), as applicable, shall apply.
2. 1. The one-and-one-half-percent severance tax rate on high-cost gas shall apply to the first thirty-six (36) consecutive calendar months beginning on the date of first production from the high-cost gas well, regardless of whether production commenced prior to January 1, 2009; provided, however, that all production attributable to the period prior to January 1, 2009, shall be taxed at the rate in effect prior to January 1, 2009.
  2. If a high-cost gas well has not achieved payout by the end of the thirty-six-month period, the one-and-one-half-percent severance tax rate shall be extended until the earlier to occur of:
    1. Payout of the high-cost gas well; or
    2. Twelve (12) months following the expiration of the original thirty-six-month period.
  3. The severance tax rate under § 26-58-111(5)(C) or § 26-58-111(5)(D), as applicable, shall apply to high-cost gas at the later of the expiration of the thirty-six-month period or any allowed extension.
1. The producer of a proposed or existing gas well may apply at any time to the Director of the Oil and Gas Commission for a determination that the well qualifies as a new discovery gas well, a high-cost gas well, or a marginal gas well.
2. The director may require an applicant to provide any information required to administer this section.
3. The director shall make the determination within fifteen (15) calendar days of the application by the producer, and the producer shall attach the determination to its severance tax form next due.
1. The severance tax on natural gas shall be paid in the manner provided in this chapter.
2. The portion of the severance tax that is required to be deducted from the royalty owner or other interest shall be calculated in the same manner as the portion of the severance tax borne by the producer.
3. The Department of Finance and Administration may promulgate the rules necessary to enforce the provisions of this act.
1. The benefits of the provisions of this subchapter shall not apply to the severance tax due or payable on oil or natural gas produced from nonsaltwater-producing wells in this state.
2. The benefits of the provisions of this subchapter shall not apply to any underground saltwater disposal system that may have been established prior to June 11, 1959, it being the intent of this subchapter that the provisions hereof shall apply only to approved underground saltwater disposal systems established from and after June 11, 1959.
1. A producer in this state wishing to obtain the benefits of the provisions of this subchapter shall make application to the Secretary of the Department of Finance and Administration for a permit to obtain credit on severance taxes due on all oil or natural gas produced in saltwater-producing wells of the producer as provided in this subchapter.
2. The application shall list:
  1. The name and address of the producer;
  2. The number and location of all saltwater-producing wells of the producer; and
  3. A certified copy of a certificate from the Arkansas Pollution Control and Ecology Commission and the Oil and Gas Commission certifying that all salt water produced in the production of oil or natural gas in the wells is being disposed of in an approved underground saltwater disposal system.
3. If the secretary determines that the producer has complied with the provisions of this subchapter and the rules established by the secretary, the secretary shall issue a permit to the producer.
4. The permit shall entitle the producer to obtain a severance tax credit on all oil or natural gas produced in saltwater-producing wells in the amount provided in this subchapter.
1. A producer is entitled to an annual severance tax credit that is calculated based upon the cost, as defined in § 26-58-209, of the producer in maintaining an approved underground saltwater disposal system during the calendar year for which the severance tax credit is approved.
2. 1. The total severance tax credits allowed all oil producers for any calendar year shall not exceed three hundred seventy thousand dollars ($370,000).
  2. If for any calendar year the total severance tax credits of all oil producers operating, utilizing, or maintaining approved underground saltwater disposal systems exceed the total maximum allowable severance tax credits provided in subdivision (b)(1) of this section, the Secretary of the Department of Finance and Administration shall prorate the allowable severance tax credits among the respective oil producers in the proportion that the severance tax credits due each oil producer bear to the total of all severance tax credits due all qualifying oil producers.
3. 1. The total severance tax credits allowed all natural gas producers for any calendar year shall not exceed three hundred seventy thousand dollars ($370,000).
  2. If for any calendar year the total severance tax credits of all natural gas producers operating, utilizing, or maintaining approved underground saltwater disposal systems exceed the total maximum allowable severance tax credits provided in subdivision (c)(1) of this section, the secretary shall prorate the allowable severance tax credits among the respective natural gas producers in the proportion that the severance tax credits due each natural gas producer bear to the total of all severance tax credits due all qualifying natural gas producers.
4. 1. A claim for a severance tax credit shall be filed with the secretary on forms prescribed by the secretary on or before April 1 of the calendar year following the calendar year in which the costs of maintaining the underground saltwater disposal system were incurred.
  2. A severance tax credit is not allowed for any claim filed after April 1 of the calendar year following the calendar year in which the costs were incurred.
5. The amount of the severance tax credit shall be paid to each qualifying and approved producer no later than June 1 of the calendar year following the calendar year in which the costs were incurred.
6. Interest shall not accrue or be paid on a severance tax credit allowed under this subchapter.
7. The secretary may promulgate rules to administer this section.
1. 1. In addition to the severance tax on oil produced in the State of Arkansas and levied in § 26-58-111(6), there is levied an additional tax of five (5) mills per barrel of oil produced in this state.
  2. All taxes, interest, and penalties collected by the Revenue Division of the Department of Finance and Administration under this subsection shall be deposited into the State Treasury as special revenues, and the Treasurer of State after deducting from these special revenues the three percent (3%) provided by law for credit to the Constitutional Officers Fund and the State Central Services Fund shall credit the net amount to the Arkansas Museum of Natural Resources Fund to be used for the construction, maintenance, operation, and improvement of the Arkansas Museum of Natural Resources.
2. 1. There is levied upon all brine produced in the state for the purpose of bromine extraction a tax of twenty cents (20¢) per one thousand (1,000) barrels.
  2. The taxes levied in this subsection shall be reported and remitted monthly to the Secretary of the Department of Finance and Administration on such forms and in such manner as the secretary shall prescribe by rules.
  3. All revenues collected by the secretary under the tax levied in this subsection shall be deposited into the State Treasury as special revenues, and the Treasurer of State after deducting from these special revenues the three percent (3%) provided by law for credit to the Constitutional Officers Fund and the State Central Services Fund shall credit the net amount to the Arkansas Museum of Natural Resources Fund to be used for the construction, maintenance, operation, and improvement of the Arkansas Museum of Natural Resources.
1. 1. There is levied a tax of two cents (2¢) per barrel of oil produced in this state.
  2. The taxes shall be reported and paid monthly to the Secretary of the Department of Finance and Administration by each producer of oil in such manner and upon such forms as the secretary shall prescribe.
2. 1. There is levied a tax of ten cents (10¢) per one thousand (1,000) barrels on all brine produced in this state for the purpose of bromine extraction.
  2. The tax shall be reported and paid monthly to the secretary by each producer of brine and oil in such manner and upon such forms as the secretary may prescribe.
3. 1. Funds collected by the secretary under this section are classified as cash fund receipts, and the full amount of the funds shall be deposited into one (1) or more accounts in one (1) or more banks in this state, which account or accounts shall be designated the “Arkansas Museum of Natural Resources Fund”.
  2. All funds in such accounts shall be used exclusively for the maintenance, operation, and construction of the Arkansas Museum of Natural Resources.
4. The taxes levied by this section shall be in addition to any and all other fees and taxes levied on oil and brine produced in this state.
1. 1. There is levied a fee of twenty (20) mills on each barrel of oil produced in this state.
  2. The fee shall be reported and paid monthly to the Secretary of the Department of Finance and Administration by each producer of oil in such manner and upon such forms as the secretary shall prescribe.
2. 1. There is levied a fee of ten cents (10¢) per one thousand (1,000) barrels on all brine produced in this state for the purpose of bromine extraction.
  2. The fee shall be reported and paid monthly to the secretary by each producer of brine and oil in such manner and upon such forms as the secretary shall prescribe.
3. 1. Funds collected by the secretary under this section are classified as cash fund receipts, and the full amount of the funds shall be deposited into one (1) or more accounts in one (1) or more banks in this state, to be designated by the Department of Finance and Administration, which account or accounts shall be designated the “Arkansas Museum of Natural Resources Bond Redemption Fund”.
  2. All funds in the fund shall be used exclusively for the payment of principal and interest on bonds issued by the Oil and Gas Commission or the Arkansas Pollution Control and Ecology Commission pursuant to the authority granted herein, and for paying agent's fees and other expenses of the issuance and sale of such bonds.
4. The fees levied by this section shall be in addition to any and all other fees levied on oil and brine produced in this state.
1. A tax is imposed upon the transfer of real estate and personal property of every kind owned by every person who at the time of death was a resident of the State of Arkansas, the amount of which shall be a sum equal to the federal credit allowable under the federal estate tax laws, 26 U.S.C. § 2001 et seq., as in effect on January 1, 2002.
2. Ownership of property shall include a share or certificate of indebtedness or other evidence of stock ownership in a foreign company or corporation, which share or certificate is present in this state.
3. 1. 1. If any portion of the property of the estate is located in another state and the other state participates in the federal credit allowable, then the Arkansas tax shall be the proportional part of the credit allowable as the Arkansas property bears to the entire estate.
    2. However, if the other state shall have a reciprocal provision as to the nontaxability of property of a nonresident, then all of the federal credit allowable shall be paid to this state.
  2. However, if no federal estate tax is imposed upon the transfer of property, no Arkansas estate tax shall be imposed on the transfer of property.
1. A tax is imposed upon the transfer of all real, tangible, and intangible personal property located in the State of Arkansas of any nonresident of this state in a sum equal to the proportion of the federal credit allowable under the federal estate tax laws, 26 U.S.C. § 2001 et seq., as in effect on January 1, 2002, for estate, inheritance, legacy, and succession taxes that the Arkansas property of such a deceased person bears to the property of the entire estate, wherever located.
2. “Arkansas property” shall be construed to include, without limiting its generality by this specification, the following items of intangible personal property:
  1. Debts including bank deposits owed to the decedent by any individual resident in this state, or by any bank or other corporation organized under the laws of this state, or by any national bank doing business in this state without regard to the physical location of any written evidence of indebtedness; and
  2. Shares of the capital stock of any corporation organized under the laws of this state without regard to the physical location of the stock certificate.
3. However, if the decedent at the time of death was a resident of a state or territory of the United States that, at the time of his or her death, provides an exemption to a resident of this state from transfer or death taxes, then the nonresident of the other state or territory shall be exempt from the payment of the estate or inheritance tax in this state.
4. However, if no federal estate tax is imposed upon the transfer of property, no Arkansas estate tax shall be imposed on the transfer of property.
1. There shall not be imposed any estate taxes, inheritance taxes, or transfer taxes upon the succession of title to any property from any person, association, company, or corporation, whether resident or nonresident of this state, passing to or for the use of:
  1. The State of Arkansas or to or for the use of municipal corporations or other political subdivisions thereof for exclusively public purposes;
  2. Public institutions of learning; or
  3. Any public hospital not for profit within this state.
2. No estate taxes, inheritance taxes, or transfer taxes levied by this state shall be imposed upon any bequest made by a resident of this state to any religious, charitable, or educational institution, organization, or foundation, whether incorporated or unincorporated, no part of the net earnings of which inures to the benefit of any private stockholder or other individual or corporation, even though the institution, organization, or foundation is located in another state, if the law of such other state provides an equal and like exemption for bequests made by residents of that state to such institutions, organizations, or foundations located in this state.
1. 1. Returns by Executor. In all cases in which the gross estate at the death of a citizen or resident of the United States exceeds one million dollars ($1,000,000) and a portion of the property comprising the gross estate is located in Arkansas, then the executor shall make a return with respect to the estate tax imposed by this chapter.
  2. Citizens or Residents of the United States. In all cases when the gross estate at the death of a citizen or resident of the United States exceeds three million five hundred thousand dollars ($3,500,000) and a portion of the property composing the gross estate is located in Arkansas, then the executor shall make a return with respect to the estate tax imposed by this chapter.
  3. Nonresidents Not Citizens of the United States. In the case of the estate of every nonresident not a citizen of the United States, if that part of the gross estate that is situated in the United States exceeds three million five hundred thousand dollars ($3,500,000) and a portion of the property composing the gross estate is located in Arkansas, then the executor shall make a return with respect to the estate tax imposed by this chapter.
  4. Phase-in of Filing Requirement Amount.
2. Returns by Beneficiaries. If the executor is unable to make a complete return as to any part of the gross estate of the decedent, he or she shall include in his or her return a description of such part and the name of every person holding a legal or beneficial interest therein. Upon notice from the Secretary of the Department of Finance and Administration, such person shall in like manner make a return as to such part of the gross estate.
3. Returns Due. Returns made under subsection (a) of this section shall be filed within nine (9) months after the date of the decedent's death.
4. Place of Filing. Estate tax returns shall be filed with the secretary at his or her office in Little Rock, Arkansas.
1. Any person who requests and receives an extension of time in which to file a federal estate tax return, as provided by 26 U.S.C. § 6081, as amended and in effect on January 1, 2002, shall be granted an extension of time in which to file the Arkansas estate tax return for the same period of time as granted for the filing of the federal estate tax return.
2. This request for extension of time in which to file shall be granted by the timely filing of a copy of the federal application form with the Secretary of the Department of Finance and Administration and then attaching to the Arkansas estate tax return, when actually filed with the secretary, a copy of the document granting such federal extension.
3. The secretary shall assess interest at the rate of ten percent (10%) per annum on the amount of estate tax finally determined to be due from the date the estate tax return was originally due to be filed.
1. The tax imposed by this chapter shall be due and payable nine (9) months after a decedent's death and shall be paid by the executor to the Secretary of the Department of Finance and Administration.
2. 1. 1. When the secretary finds that the payment on the due date of the tax or any part of the tax would impose undue hardship upon the estate, the secretary may extend the time for any payment of any such part.
    2. However, no extension shall be for more than eighteen (18) months, and the aggregate of the extension with respect to any estate shall not exceed five (5) years from the due date, except as provided in subsection (c) of this section.
  2. In such case, the amount in respect of which the extension is granted shall be paid on or before the date of the expiration of the period of the extension unless further extension is granted.
3. 1. The provisions of 26 U.S.C. § 6166, as amended and in effect on January 1, 2002, which provide for an election by the representative of a decedent's estate to pay the federal estate tax due on certain qualifying assets of the estate in deferred installments for a period of up to fifteen (15) years at a two-percent interest rate regarding either the estate original shown due on the estate tax return or as later determined to be due following audit shall be adopted as a state estate tax law.
  2. 1. However, the two-percent interest rate shall only apply to the “2-percent portion” as that term is defined in 26 U.S.C. § 6601(j)(2), as amended and in effect on January 1, 2002.
    2. The interest rate on the estate tax exceeding the “2-percent portion” shall be at the rate specified in § 26-18-508 concerning tax deficiencies.
  3. Any timely filed election by the representative of the decedent's estate for deferral of the payment of federal estate taxes shall be deemed to also defer the payment of the applicable portion of Arkansas estate tax for the same periods of time for the Arkansas assets qualifying for this special federal election.
1. The Secretary of the Department of Finance and Administration shall issue to the executor upon payment of the tax imposed by this chapter receipts in triplicate any of which shall be sufficient evidence of the payment, and shall entitle the executor to be credited and allowed the amount thereof by any court having jurisdiction to audit or settle the executor's accounts.
2. If the executor files a complete return and makes written application to the secretary for determination of the amount of the tax and discharge from personal liability, the secretary as soon as possible, and in any event within one (1) year after receipt of such application, shall notify the executor of the amount of the tax and, upon payment thereof, the executor shall be discharged from personal liability for any additional tax thereafter found to be due and shall be entitled to receive from the secretary a receipt in writing showing such discharge.
3. The discharge shall not operate to release the gross estate of the lien of any additional tax that may thereafter be found to be due while the title to such gross estate remains in the executor or in the heirs, devisees, or distributees thereof. However, after the discharge is given no part of the gross estate shall be subject to the lien or to any claim or demand for any such tax after the title thereto has passed to a bona fide purchaser for value.
1. If the tax or any part thereof is paid or collected out of that part of the estate passing to or in possession of any person other than the executor in his or her capacity as such, the person shall be entitled to a reimbursement out of any part of the estate still undistributed or by a just and equitable contribution by the person whose interest in the estate of the decedent would have been reduced if the tax had been paid before the distribution of the estate or whose interest in the estate is subject to an equal or prior liability for the payment of tax, debts, or other charges against the estate.
2. It is the purpose and intent of this section that insofar as is practical and unless otherwise directed by the will of the decedent, the tax shall be paid out of the estate before its distribution. However, the Secretary of the Department of Finance and Administration shall not be charged with enforcing contribution from any person.
1. When letters of administration or letters testamentary are issued by any probate clerk of a county of the State of Arkansas, the probate clerk shall immediately advise the Revenue Division of the Department of Finance and Administration that such letters were granted, giving the name of the executor or administrator and an estimate of the value of the estate of the deceased person so far as the probate clerk is able to ascertain from information obtained, and the number of heirs of the deceased person.
2. The probate clerk of the county shall also furnish the division a certified copy of the appraisement of the real and personal property of each estate when the appraisement of the property of each of the estates is filed with the probate clerk.
1. If the executor of the estate of a nonresident is a corporation authorized, qualified, and acting as executor in the jurisdiction of the domicile of the decedent, it shall be under the same duties and obligations as to the giving of notices and filing of returns required by this chapter and may bring and defend actions and suits as may be authorized or permitted by this chapter, to the same extent as an individual executor, notwithstanding that the corporation may be prohibited from exercising in this state any powers as executor.
2. Nothing contained in this section shall be taken or construed as authorizing corporations not authorized to do business in this state to qualify or act as executor, administrator, or in any other fiduciary capacity if otherwise prohibited by the laws of this state except to the extent herein expressly provided.
1. All taxes, fees, penalties, and costs received by the Secretary of the Department of Finance and Administration under this chapter shall be general revenues and shall be deposited into the State Treasury to the credit of the State Apportionment Fund, except that the amount of estate taxes collected in a calendar year that exceeds ten percent (10%) of the average annual estate taxes collected for a five-year period immediately preceding the calendar year or fifteen million dollars ($15,000,000), whichever is greater, shall be deposited into the State Treasury as special revenues and credited to the General Improvement Fund or its successor fund or fund accounts, including the Development and Enhancement Fund.
2. The Treasurer of State shall allocate and transfer the funds to the various State Treasury funds participating in general revenues in the respective proportions to each as provided by and to be used for the respective purposes set forth in the Revenue Stabilization Law, § 19-5-101 et seq.
1. There is levied on each deed, instrument, or writing by which any lands, tenements, or other realty is granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or any other person by the purchaser's direction, when the consideration for the lands, tenements, or other realty conveyed exceeds one hundred dollars ($100), a tax at the rate of one dollar and ten cents ($1.10) for each one thousand dollars ($1,000) or fractional part thereof.
2. In addition to the tax levied in subsection (a) of this section, there is levied an additional tax of two dollars and twenty cents ($2.20) for each one thousand dollars ($1,000) or fractional part thereof to be paid by the purchaser and to be allocated and used for the purposes stated in § 15-12-103.
3. 1. The taxes levied under this section shall be based solely on the consideration given for the lands, tenements, or other realty, and a tax shall not be levied under this section on the consideration given for tangible personal property or intangible personal property.
  2. If a grant, assignment, transfer, or other conveyance involves lands, tenements, or other realty in addition to tangible personal property or intangible personal property, then the taxes levied under this section shall be based solely on the consideration for the lands, tenements, or other realty.
1. 1. The Secretary of the Department of Finance and Administration shall design a “Real Property Transfer Tax Affidavit of Compliance” form.
  2. 1. The form shall contain essentially the information prescribed in this section.
    2. The affidavit portion of the form shall provide:
      1. The name and address of the grantor or seller;
      2. The name and address of the grantee or buyer;
      3. The date of the real property transfer as reflected on the transfer instrument;
      4. The name of the county where the property is located;
      5. The amount of the full consideration for the transaction or a statement giving the reason the real property transfer tax does not apply to the transaction unless it is clearly evident from the contents of the instrument to be recorded without reference to any other writing or extrinsic evidence that the instrument is exempt from the real property transfer tax under one (1) of the provisions in § 26-60-102, in which case the county recorder may record the instrument without the affidavit. In any case when the county recorder doubts the entitlement to the exemption, the county recorder shall require the affidavit or a certification, setting out the reasons for the exemption in full to be submitted with the instrument prior to recording the instrument; and
      6. The value of the documentary stamps or documentary symbol attached to the face of the instrument.
2. 1. If the real property transfer instrument is for a transfer upon which no tax is due but is not clearly exempt under § 26-60-102, the affidavit under subsection (a) of this section shall provide for stating this fact and shall be signed by the grantee or his or her agent, whose address shall be included on the affidavit and be presented with the transfer instrument to the county recorder.
  2. The secretary shall furnish the “Real Property Transfer Tax Affidavit of Compliance” forms to each revenue office in each county of this state and may make these forms available to the county recorder or any other interested persons in each county upon request to the secretary.
  3. 1. The grantee or his or her agent shall complete the affidavit, including a statement of the full consideration for the transaction and the amount of tax to be reflected by documentary stamps or a documentary symbol on the face of the instrument.
    2. The grantee or his or her agent shall attach the proper number of documentary stamps or the proper documentary symbol to the face of the instrument in such a manner that all documentary stamps or the documentary symbol will be fully visible in the records of the county recorder where the county recorder maintains records by reproducing the instrument by photographic, photocopy, or other reproductive method.
3. 1. When it is clearly evident from the contents of the instrument without reference to any other writing or extrinsic evidence that the instrument is exempt from the real property transfer tax under one (1) of the provisions in § 26-60-102, the county recorder may record the instrument without requiring the certification allowed as an alternative to the affidavit.
  2. If the county recorder doubts the entitlement to the exemption, the county recorder shall require a certification or affidavit setting out the reasons for the exemption in full to be submitted with the instrument prior to recording the instrument.
4. 1. The affidavits in the files of the secretary are public records governed by the same rules as are applied to the disclosure of motor vehicle titling and registration information.
  2. The copies of the affidavit in the hands of the county assessor are public records subject to the same laws regarding disclosure as all other taxpayer records of the county assessor.
5. 1. Upon receipt of the instrument, the county recorder shall cancel the documentary stamps or documentary symbol or shall note that the instrument is exempt or that no tax is due on the face of the instrument.
  2. The county recorder shall place on the face of the affidavit a file stamp and the book and page or instrument number of the recorded instrument.
6. The secretary may:
  1. 1. Investigate the possibility of replacing or supplementing the paper Real Property Transfer Tax Affidavit of Compliance presently used as proof of compliance with the real property transfer tax with alternative proofs of compliance, including without limitation electronic affidavits with electronic signatures.
    2. The secretary shall collaborate with attorneys at law, representatives of title companies, county recorders, and other interested parties to recommend an alternative method of providing proof of compliance with the real property transfer tax.
    3. If an investigation is undertaken, the secretary shall complete the investigation by July 1, 2012; and
  2. 1. Promulgate rules to implement alternative methods of providing proof of compliance with the real property transfer tax that ensure that the grantee is in full compliance with the law and the use of documentary symbols.
    2. Before promulgating any rules, the secretary shall report the finding of the investigation authorized under subdivision (f)(1) of this section to the Speaker of the House of Representatives and the President Pro Tempore of the Senate if the General Assembly is in session or to the Legislative Council during an interim.
1. The Secretary of the Department of Finance and Administration or his or her agent before accepting payment of the real property transfer tax shall require that the affidavit portion of the Real Property Transfer Tax Affidavit of Compliance form and receipt be completed, including the statement of the full amount of the consideration for the transaction and the amount of tax to be reflected on the receipt portion thereof in evidence that such information was furnished by the person signing the affidavit before the secretary shall receive payment of the tax, and sign the receipt. The secretary shall attach the stamps to the face of the instrument.
2. 1. The original copy of the affidavit and receipt shall be retained by the secretary or his or her agent and shall be treated as a confidential tax record in the same manner as required by law for confidentiality of state income tax returns.
  2. The information shall be released to duly elected county assessors and become a public document.
3. If authorized by the secretary, an electronic copy of an affidavit described in this section may be used and retained in the same manner as other electronic documents.
1. The Secretary of the Department of Finance and Administration shall:
  1. Design documentary stamps or documentary symbols in appropriate denominations; and
  2. Make the documentary stamps and documentary symbols available for purchase at offices of the Revenue Division of the Department of Finance and Administration and by consignment arrangement with title companies, banks, and savings and loan associations throughout the state.
2. The secretary may:
  1. 1. Investigate the possibility of replacing or supplementing the paper documentary stamps presently used as proof of compliance with the real property transfer tax with alternative proofs of payment, including without limitation ink-based or computer-generated symbols to be placed on instruments evidencing a transfer of real property.
    2. The secretary shall collaborate with attorneys at law, representatives of title companies, county recorders, and other interested parties to recommend possible alternative methods of providing proof of payment of the real property transfer tax.
    3. If an investigation is undertaken, the secretary shall complete the investigation by July 1, 2012; and
  2. 1. Promulgate rules to implement alternative methods of providing proof of payment of the real property transfer tax that ensure that the grantee is in full compliance with the law.
    2. Before promulgating any rules, the secretary shall report the finding of the investigation authorized under § 26-60-107(f)(1) to the Speaker of the House of Representatives and the President Pro Tempore of the Senate if the General Assembly is in session or to the Legislative Council during the interim.
1. Before an instrument evidencing a transfer of real property is accepted by a county recorder for recordation, the grantee, buyer, or the agent of the grantee or buyer shall furnish proof of payment of tax or proof of an exemption from payment of the tax required in this chapter.
2. The county recorder shall not record any instrument evidencing a transfer of title subject to this chapter unless:
  1. 1. The instrument has:
      1. An attached or accompanying affidavit in the form containing the information required in this chapter; and
      2. Documentary stamps or a documentary symbol attached to the face of the instrument evidencing full payment of the real property transfer tax on the transaction.
    2. The instrument shall contain a notation on its face, which shall be recorded as part of the instrument, that the affidavit was completed; or
  2. 1. In the alternative, the instrument has marked on the instrument or attached to the instrument in a manner that will cause it to be recorded as a part of the instrument the following statement:
    2. This statement shall be signed by the grantee or his or her agent, and the grantee's address shall be clearly shown on the instrument.
    3. An affidavit or compliance form from the Department of Finance and Administration or a receipt showing proof of tax paid is not required to be attached to an instrument that is exempt from the payment of the real property transfer tax if the instrument contains the following statement or a substantially similar statement, acknowledged in the same manner required under subdivision (b)(2)(B) of this section:
3. The county recorder shall not record any instrument on which a documentary stamp or a documentary symbol is attached in a manner that the amount printed on or within each documentary stamp or documentary symbol is not visible.
1. 1. Any person filing a deed for record who knowingly, willfully, and fraudulently files the deed in violation of this chapter upon conviction thereof in addition to other penalties provided by law shall be subject to a fine of five hundred dollars ($500) or one percent (1%) of the amount of the transaction, whichever is greater.
  2. In addition to such fine and penalties, the affidavit and certification provided for by this chapter are declared to be a return within the meaning of the Arkansas Tax Procedure Act, § 26-18-101 et seq., and the purchase of documentary stamps or a documentary symbol is the payment of the tax due on the return, and the person required to furnish proof of payment is a taxpayer within the meaning of the Arkansas Tax Procedure Act, § 26-18-101 et seq.
2. Any person guilty of providing false information on the affidavit or making a false certification or who shall fail to disclose the full amount of the consideration of the transaction on the affidavit and pay the tax due thereon or who makes a false certification and fails to pay the correct amount of tax due as required by this chapter, shall be subject to the penalties provided for in §§ 26-18-201 — 26-18-204.
1. The revenues from the additional tax levied by § 26-60-105(b) shall be deemed special revenues and shall be deposited and distributed according to § 15-12-103.
2. The revenues derived from the tax levied by § 26-60-105(a) shall be deposited by the Secretary of the Department of Finance and Administration into the State Treasury, and the Treasurer of State after deducting three percent (3%) of the revenues for distribution to the Constitutional Officers Fund and the State Central Services Fund to be used for the purposes as provided by law shall distribute the net amount of the revenues as follows:
  1. Ten percent (10%) of the remainder shall be distributed as special revenues, as follows:
    1. The first one hundred fifty-seven thousand five hundred dollars ($157,500) of the remainder during each fiscal year shall be credited to the County Clerks Continuing Education Fund, the Circuit Clerks Continuing Education Fund, and the County Coroners Continuing Education Fund that are established in the State Treasury, to be used for defraying the expenses of training seminars and other educational projects benefiting county and circuit clerks and coroners in this state, as provided by appropriations enacted by the General Assembly and shall be used as follows:
      1. Fifty-two thousand five hundred dollars ($52,500) for county clerks' continuing education.
        
        Any unexpended balances of moneys designated for county clerks' continuing education shall be retained exclusively for the purpose of county clerks' continuing education;
      2. Fifty-two thousand five hundred dollars ($52,500) for circuit clerks' continuing education.
        
        Any unexpended balances of moneys designated for circuit clerks' continuing education shall be retained exclusively for the purpose of circuit clerks' continuing education; and
      3. Fifty-two thousand five hundred dollars ($52,500) for county coroners' continuing education.
        
        Any unexpended balances of moneys designated for county coroners' continuing education shall be retained exclusively for the purpose of county coroners' continuing education; and
    2. The remainder of the ten percent (10%) of the remainder available for distribution during each fiscal year shall be credited as special revenues to the County Aid Fund, to be distributed in the manner provided by law to the circuit clerk in the county where the property upon which the tax is paid is situated, to be paid over by the circuit clerk to the county general fund; and
  2. Ninety percent (90%) of the remainder of the revenues shall be distributed as follows:
    1. The entire amount collected during each fiscal year until there has been collected an amount of such tax equaling the amount of tax collected under this chapter during fiscal year 1982-1983 shall be credited as general revenues to be allocated to the various funds participating in the distribution of general revenues in the amount of each such fund as provided by and to be used for the respective purposes set forth in the Revenue Stabilization Law, § 19-5-101 et seq.; and
    2. 1. After making the distribution of the revenues as provided in subdivision (b)(2)(A) of this section, the remainder available each fiscal year shall be credited as special revenues to the State Administration of Justice Fund to be used for supplementing moneys in the State Administration of Justice Fund for court reporter salaries and expenses in the event that the moneys available in the Court Reporter's Fund are inadequate during any fiscal year to make the necessary payments for salary and related expenses of the various court reporters of the state.
      2. Any amount received over and above this amount shall be credited as special revenues to the County Aid Fund.
1. The Assessment Coordination Division shall establish standards for the classification of lands in this state which are deemed as timberlands and shall certify these standards to the respective county assessors of the various counties in this state.
2. 1. It shall be the duty of the several county assessors in the respective counties of this state to identify upon the assessment records of all taxable real property in their respective counties the number of acres of property which are classified as timberlands.
  2. This information shall be extended on the assessment records submitted to the respective county clerks and shall be extended on the tax books, at the rate of tax per acre of timberlands as provided in this chapter, as a separate item of taxes to be collected by the respective county collectors at the same time that real property taxes are paid.
3. The county clerk shall be entitled to a fee of two percent (2%) of the taxes collected under this chapter to defray the costs incurred by the county clerk in performing his or her duties in connection with the taxes levied in this chapter.
1. If the tax is not paid within the time provided in this chapter, a penalty of up to twenty-five percent (25%) as determined by ordinance of the county quorum court of the amount shall be added thereto and shall be collected at the time delinquent real property taxes thereon are paid.
2. Any delinquent taxes under the provisions of this chapter shall be collected in the same procedures as provided by law for the collection and payment of taxes on real estate. These taxes shall be transmitted monthly by the county collector to the county treasurer for deposit with the Arkansas Forestry Commission as provided in this chapter.
1. The county treasurer on or before the twentieth day following the end of each calendar quarter shall transmit to the Arkansas Forestry Commission all taxes collected under the provisions of this chapter during the preceding calendar quarter.
2. The county collector shall be allowed a fee of two percent (2%) as a fee of his or her office to defray the cost of collection, and the county treasurer shall be allowed a two percent (2%) commission in accordance with § 21-6-302.
3. The commission upon receipt thereof shall deposit the same with the Treasurer of State, who shall deposit the moneys as special revenues into the State Forestry Fund as provided in § 26-61-103.
1. It is found and determined by the General Assembly that the Arkansas Forestry Commission is in need of additional funds for the protection of the forestlands of this state from forest fires and for the performance of the various duties required to be performed by the commission, and it is further determined by the General Assembly that the commission derives its support from:
  1. The allocation of general revenue funds to partially defray its operating costs;
  2. The allocation of timber and timber products severance taxes; and
  3. The income derived from the taxes levied on timberland under the provisions of this chapter.
2. The General Assembly further determines that county officials in certain counties of this state are not enforcing the duties imposed upon their respective offices with respect to the levy and collection of the forest fire protection tax as intended by law and that, in order to recover moneys lost for the commission due to the failure of these officials to levy and collect these taxes and to assure equity in the enforcement of tax collections in this state, those counties in which the officials fail to levy and collect the forest fire protection tax shall be penalized by withholding the amount of general revenues intended to be distributed as county aid to those counties, with the amount withheld to be equal to the amount of the forest fire protection tax that should have been collected.
3. 1. 1. Each county assessor shall report to the State Forester the number of acres of timberland as reflected in the reappraisal of real property in his or her county under Arkansas Constitution, Amendment 59.
    2. The State Forester may examine the books of the county assessor in order to verify the report.
  2. 1. 1. If the State Forester certifies to the Treasurer of State that the taxable timberland acreage within a county under this chapter has decreased in any year to less than ninety-five percent (95%) of the taxable timber land acreage as determined by the reassessment of property under Arkansas Constitution, Amendment 59, the Treasurer of State shall withhold from general revenues within the County Aid Fund an amount calculated by multiplying five cents (5¢) by the number of taxable timberland acres which the State Forester certifies as having not been taxed that year under this chapter.
      2. The Treasurer of State shall place in escrow the funds withheld pending further instructions by the State Forester.
    2. 1. Within six (6) months after certification, the State Forester shall examine the records of the county assessor and certify to the Treasurer of State the amount of forest fire protection tax revenues which were not collected as a result of errors or omissions, and that amount shall be transferred by the Treasurer of State from the escrow account to the State Forestry Fund to be used for the maintenance, operation, and support of the commission.
      2. The remainder of the county's escrowed funds shall be distributed as county aid to the county.
1. Once an alternative fuels supplier, user, interstate user, or IFTA carrier user of alternative fuels has become liable to file a report with the Secretary of the Department of Finance and Administration, he or she must continue to file a report, even though no tax is due, until such time as he or she notifies the secretary in writing that he or she is no longer liable for those reports.
2. 1. Any alternative fuels supplier, user, interstate user, or IFTA carrier user of alternative fuels who fails, neglects, or refuses to make any report required by this chapter or to pay any tax levied at the time and in the manner required in this chapter in addition to any other penalty provided in this chapter shall be liable for the amount of the tax due, together with a penalty of twenty percent (20%) or a minimum of five dollars ($5.00), whichever is greater, plus interest at the rate of ten percent (10%) per annum from the date due until paid.
  2. If the tax, penalty, and interest are collected by proceedings in court, an additional penalty of twenty percent (20%) of the tax shall be imposed and collected as attorney's fees.
1. All of the taxes, fees, penalties, and interest collected under the provisions of this chapter shall be classified as special revenues and shall be deposited into the State Treasury. After deducting therefrom the three percent (3%) for credit to the Constitutional Officers Fund and the State Central Services Fund as provided in the Revenue Stabilization Law, § 19-5-101 et seq., the Treasurer of State shall transfer on the last business day of each month:
  1. Fifteen percent (15%) of the amount thereof to the County Aid Fund;
  2. Fifteen percent (15%) of the amount thereof to the Municipal Aid Fund; and
  3. Seventy percent (70%) of the amount thereof to the State Highway and Transportation Department Fund.
2. The funds shall be further disbursed in the same manner and used for the same purposes as set out in the Arkansas Highway Revenue Distribution Law, § 27-70-201 et seq.
1. 1. There is hereby levied and imposed an excise tax per gallon equivalent at the rate set forth in subsection (b) of this section on each type of alternative fuels sold or used in this state for the purpose of propelling a motor vehicle or motor vehicles in this state or purchased for sale or use in this state for the purpose of propelling a motor vehicle or motor vehicles in this state.
  2. The Secretary of the Department of Finance and Administration shall determine the various types of alternative fuels being utilized in this state and the applicable rates to be imposed for each type of fuel in accordance with the following provisions of this section, provided that the secretary in his or her initial determination at a minimum shall find at least one (1) type of alternative fuels, specifically, natural gas fuels.
2. The tax rate for each equivalent gallon for each type of alternative fuels shall be in accordance with the following table:
3. 1. 1. The tax rate set forth in subsection (b) of this section for each type of alternative fuels shall be adjusted if necessary by the secretary on April 1 of each year based upon the number of vehicles utilizing alternative fuels, by each type of alternative fuels, licensed in this state, as determined by the secretary, as of December 31 of the preceding calendar year.
    2. If a change in the tax rate in accordance with subsection (b) of this section for any type of alternative fuels is required, the secretary shall include this in the report required by this section, and the secretary shall also notify each alternative fuels supplier of the new tax rate not later than thirty (30) days prior to the effective date of such change.
  2. Notwithstanding any other provision of this chapter, in determining the number of alternative fuels vehicles licensed in this state by each type of alternative fuels in order to determine the tax rate per equivalent gallon, there shall not be taken into account any alternative fuels vehicles owned, licensed, or used by the United States Government, or any agency or instrumentality thereof.
4. It is the intent of the tax levy set forth in this section to tax each particular type of alternative fuels depending upon the number of alternative fuels vehicles using the particular type of alternative fuels licensed in Arkansas.
5. 1. The secretary may develop a procedure in which the type of alternative fuels or other type of fuel is noted on the certificate of title or certificate of registration of an alternative fuels vehicle.
  2. It is the intention of this subsection to develop a system for the secretary and other officials of the State of Arkansas to know the precise number of vehicles using alternative fuels and other fuels licensed in this state, both in the aggregate and by the type of fuel propelling the vehicles.
6. Not later than February 15 each year, the secretary shall file a written report with the Director of State Highways and Transportation setting forth the number of vehicles using alternative fuels and other types of fuels licensed in this state as of the end of the preceding calendar year, both in the aggregate and by each type of fuel, and the amount of tax revenue received by the State of Arkansas on the tax levied by this chapter. The secretary shall also state the tax rate for the next twelve (12) months, beginning as of the first day of April of each year for each type of alternative fuel.
7. Sales to the United States Government are exempt from the tax levied by subsection (a) of this section.
8. The tax levied herein shall not apply to alternative fuels imported into this state in the fuel supply tanks, including any additional containers, of motor vehicles being used solely for noncommercial purposes if the aggregate capacity of the fuel supply tanks, including any additional containers, does not exceed thirty (30) equivalent gallons.
1. The tax levied by this chapter shall be collected and paid by alternative fuels suppliers on all alternative fuels sold or delivered by such suppliers when:
  1. Delivered into the fuel supply tanks of a motor vehicle;
  2. Sold to a dealer or user; or
  3. Used in any motor vehicle owned or operated by that alternative fuels supplier. The Secretary of the Department of Finance and Administration shall make and promulgate rules for a system for recordkeeping requirements to be kept by such suppliers in fulfilling this subdivision (a)(3).
2. The tax levied by this chapter shall be paid by an interstate user who uses alternative fuels in this state as provided by §§ 26-62-209 and 26-62-211.
3. The tax levied by this chapter shall be paid by any person who uses alternative fuels in this state on which the tax levied in this chapter has not been paid in accordance with the provisions of § 26-62-209 or § 26-62-211.
4. The tax levied by this chapter shall be paid by an IFTA carrier user who uses alternative fuels in this state as provided by § 26-62-209.
1. No user, including an alternative fuels supplier of natural gas fuels, who utilizes natural gas for residential or other tax-free purposes, shall use such natural gas fuels in motor vehicles unless such natural gas fuels are removed through a separate meter installed by the alternative fuels supplier for such purposes.
2. All alternative fuels suppliers shall monitor such separate meters for billing and taxation purposes.
3. 1. Such users shall be licensed and bonded only if required by § 26-62-204 but shall remit all taxes to the alternative fuels supplier upon billing by that supplier, which supplier shall further remit such taxes to the Secretary of the Department of Finance and Administration as provided in § 26-62-206.
  2. Such user, however, at the time of the installation of the separate meter shall report to the secretary the:
    1. Number of vehicles;
    2. Models and makes;
    3. License numbers;
    4. Vehicle identification numbers; and
    5. Any other information required by the secretary pursuant to rules of the secretary.
1. No person shall commence operations as an alternative fuels supplier, interstate user, or IFTA carrier user of alternative fuels without first procuring a license for that purpose from the Secretary of the Department of Finance and Administration. This license shall be issued and remain in effect until revoked as provided in this section.
2. 1. Each application for a license as an alternative fuels supplier, interstate user, or IFTA carrier user of alternative fuels, and each license, shall have as a condition that the applicant and holder shall comply with the provisions of this chapter.
  2. 1. Each application for a license as an alternative fuels supplier, interstate user, or IFTA carrier user, and each such license, shall have as a further condition that the applicant and holder shall not deliver or permit delivery into the fuel supply tanks of motor vehicles any alternative fuels on which the tax levied by this chapter is not collected or will be remitted pursuant to § 26-62-209.
    2. A taxable use of alternative fuels on which the tax is not collected by an applicant for, or a holder of, an alternative fuels supplier license or on a licensed interstate user or IFTA carrier user on which the tax is not remitted pursuant to § 26-62-209, in addition to the penal provisions prescribed in this chapter, shall cause immediate cancellation of the applicant or holder's license.
3. 1. 1. Every alternative fuels supplier shall file with the secretary a surety bond of not less than one and one-half (1½) times or one hundred fifty percent (150%) of the prior six (6) months' average alternative fuels tax due which is based upon the gallon equivalent of alternative fuels to be sold or distributed:
      1. As shown by the application for a license if the applicant has not previously been engaged in the business of an alternative fuels supplier; or
      2. As shown by sales for the previous year if the applicant previously has been engaged in such business in this state.
    2. However, no bond shall be filed for less than one thousand dollars ($1,000).
  2. If the secretary deems it necessary to protect the state in the collection of alternative fuels taxes, the secretary may require any alternative fuels supplier to post a bond in an amount up to three (3) times or three hundred percent (300%) of the prior six (6) months' average alternative fuels tax due.
  3. 1. However, the secretary is authorized to waive the posting of bond by any licensed alternative fuels supplier organized and operating under the laws of Arkansas and wholly owned by residents of this state who has been licensed for a period of at least three (3) years and who has not been delinquent in remitting alternative fuels taxes during the three-year period immediately preceding application by the alternative fuels supplier for waiver of bond.
    2. If any alternative fuels supplier whose bond has been waived by the secretary as authorized in subdivision (c)(3)(A) of this section subsequently becomes delinquent in remitting alternative fuels taxes to the secretary, the secretary may require that the alternative fuels supplier post a bond in the amount required in this section, and the alternative fuels supplier shall not be eligible to petition for a waiver of bond for a period of three (3) years thereafter.
4. 1. Each application of an interstate user or IFTA carrier user for a license shall be accompanied by a surety bond of a surety company authorized to do business in this state, in favor of the secretary, satisfactory to the secretary, and in an amount to be fixed by the secretary of not less than one thousand dollars ($1,000) nor more than fifty thousand dollars ($50,000), guaranteeing the payment of any and all taxes, penalties, interest, attorney's fees, and costs levied by, accrued, or accruing under this chapter.
  2. Any violation of this chapter shall be cause for revocation of any license issued under this chapter.
5. 1. The bond or bonds shall be issued by a surety company qualified to do business in Arkansas, which shall be executed by the alternative fuels supplier, interstate user, or IFTA carrier user as the principal obligor and shall be made payable to the State of Arkansas as the obligee.
  2. The bond shall be conditioned upon the prompt filing of true reports and the payment by the alternative fuels supplier, interstate user, or IFTA carrier user to the secretary of any and all alternative fuels taxes which are levied or imposed by the State of Arkansas, together with any and all penalties and interest thereon, and generally, upon faithful compliance with the provisions of this chapter.
6. 1. In the event that liability upon the bond filed pursuant to this section by the alternative fuels supplier, interstate user, or IFTA carrier user with the secretary shall be discharged or reduced, whether by judgment rendered, payment made, or otherwise, or if, in the opinion of the secretary, any surety on the bond shall have become unsatisfactory or unacceptable, then the secretary may require the filing of a new bond with a satisfactory surety in the same form and amount; failing which, the secretary shall immediately cancel the license of the alternative fuels supplier, interstate user, or IFTA carrier user.
  2. If a new bond shall be furnished, the secretary shall cancel the bonds for which the new bond shall be substituted.
7. In the event that upon hearing of which the alternative fuels supplier, interstate user, or IFTA carrier user shall be given five (5) days' notice in writing, the secretary shall decide that the amount of the existing bond is insufficient to ensure payment to the State of Arkansas of the amount of the tax and any penalties and interest for which said alternative fuels supplier, interstate user, or IFTA carrier user is or may at any time become liable, then the alternative fuels supplier, interstate user, or IFTA carrier user upon written demand of the secretary shall immediately file an additional bond in the same manner and form and with a surety company thereon approved by the secretary in any amount determined by the secretary to be necessary to secure at all times the payment to the State of Arkansas of all taxes, penalties, and interest due under the provisions of this chapter; failing which, the secretary shall immediately cancel the license of the alternative fuels supplier, interstate user, or IFTA carrier user.
8. 1. 1. Any surety on any bond furnished as provided in this section shall be released and discharged from any and all liability to the State of Arkansas accruing on the bond after the expiration of sixty (60) days from the date upon which a surety shall have lodged with the secretary a written request to be released and discharged.
    2. However, the request shall not operate to relieve, release, or discharge the surety from any liability already accrued, or which shall accrue, before the expiration of the sixty-day period.
  2. Upon receipt of notice of such request, the secretary shall promptly notify the alternative fuels supplier, interstate user, or IFTA carrier user who furnished the bond, and unless the alternative fuels supplier, interstate user, or IFTA carrier user, on or before the expiration of the sixty-day period, files with the secretary a new bond with a surety company satisfactory to the secretary in the amount and form as provided in this section, the secretary shall immediately cancel the license of that alternative fuels supplier, interstate user, or IFTA carrier user.
  3. If a new bond shall be furnished as provided in this section, the secretary shall cancel the bond for which the new bond shall be substituted.
9. In lieu of furnishing a bond or bonds executed by a surety company as provided in this section, any alternative fuels supplier, interstate user, or IFTA carrier user may furnish a bond or other instrument, in form prescribed by the secretary, equal to the amount of the bond or bonds required by this section which will provide security or payment of all amounts as described in this section and in compliance with all provisions of this chapter.
10. 1. Any violation of this chapter shall be cause for revocation of any license issued pursuant to this chapter.
  2. 1. Should his or her license be revoked, any alternative fuels supplier, interstate user, or IFTA carrier user may bring an action against the secretary in the Pulaski County Circuit Court within fifteen (15) days of the date of revocation to determine whether or not the alternative fuels supplier, interstate user, or IFTA carrier user has in fact violated any of the provisions of this chapter.
    2. If the court determines that the provisions of the law have been violated by the alternative fuels supplier, interstate user, or IFTA carrier user, it shall affirm the secretary's action in revoking the license.
11. If any of the provisions of this chapter regarding IFTA carrier users conflicts with the International Fuel Tax Agreement, § 26-55-1101 et seq., entered into by this state, the provisions of the International Fuel Tax Agreement, § 26-55-1101 et seq., shall govern.
1. 1. Each alternative fuels supplier shall have available a sufficient number of sales tickets prepared in triplicate to cover sales of alternative fuels under the provisions of this chapter.
  2. The forms for sales tickets shall be numbered and prepared with blank spaces for:
    1. The name and address of the alternative fuels supplier;
    2. The name and address of the purchaser;
    3. The date of the purchase;
    4. The number of gallons equivalent purchased;
    5. The total cost of alternative fuels purchased including taxes; and
    6. Such other information as the Secretary of the Department of Finance and Administration may require.
2. 1. The sales tickets shall be issued in triplicate by the alternative fuels supplier and shall be signed by the alternative fuels supplier or his or her authorized agent, and the original and one (1) copy shall be given to the purchaser.
  2. The remaining copy shall be retained by the alternative fuels supplier as a record for a period of at least three (3) years, during which period it shall be subject to inspection by the secretary or his or her representative at all reasonable times.
3. The sales tickets as described in subsections (a) and (b) of this section shall be the only evidence accepted for tax credit by the secretary under the provisions of § 26-62-209.
4. Any licensed alternative fuels supplier or agent or employee of the alternative fuels supplier who issues any sales ticket or invoice to any user showing that the user has purchased a quantity of alternative fuels from the alternative fuels supplier, agent, or employee when, in fact, the user has not purchased alternative fuels or has purchased less alternative fuels than the sales ticket or invoice shows shall be guilty of a violation and upon conviction shall be fined not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000).
5. 1. The secretary, in consultation with the Director of State Highways and Transportation shall promulgate rules regarding an alternative to the required usage of sales tickets for all sales of natural gas fuels made by alternative fuels suppliers by separate meter as provided in § 26-62-203.
  2. It is the intent of this directive that if a user, other than an interstate user or IFTA carrier user, receives natural gas fuels through a separate meter, there shall be no sales ticket requirement.
1. 1. Every alternative fuels supplier on or before the twenty-fifth day of each calendar month shall file with the Secretary of the Department of Finance and Administration on forms prescribed by the secretary a report accounting for the alternative fuels taxable under this chapter during the preceding month and shall remit all taxes as reflected by the report to the secretary at the time of filing such report.
  2. The alternative fuels supplier shall file supporting documents necessary to assure accurate reporting. The reports shall include the following:
    1. An itemized statement of the number of equivalent gallons of alternative fuels sold and delivered into the fuel supply tanks of motor vehicles during the next preceding calendar month by the alternative fuels supplier;
    2. An itemized statement of the number of gallons equivalent of alternative fuels delivered into the fuel supply tanks of motor vehicles owned, leased, or operated by the alternative fuels supplier during the next preceding calendar month by the alternative fuels supplier;
    3. An itemized statement of the number of gallons equivalent of alternative fuels sold through separate meter to a user for the fueling of motor vehicles during the next preceding calendar month by the supplier; and
    4. Such other documents as the secretary requires.
2. Every interstate user and IFTA carrier user, on or before the twenty-fifth day of the month following the end of each calendar quarter, shall file with the secretary on forms prescribed by the secretary an itemized report showing the quantities of alternative fuels purchased and used in this state during the preceding calendar quarter, together with payments of the tax due thereon.
1. Every person required by law to secure a license under this chapter shall keep records in the time and manner and subject to inspection and audit as required by the Arkansas Tax Procedure Act, § 26-18-101 et seq., including a complete record of all alternative fuels taxable under this chapter and sold, delivered, or used by the person, showing for each purchase, receipt, sale, delivery, or use:
  1. The date;
  2. The name and address of the seller from whom the user, interstate user, or IFTA carrier user purchased the fuels and that interstate user or IFTA carrier user's license number; and
  3. An accurate record of the number of gallons equivalent of alternative fuels sold or used for taxable purposes with quantities measured by a meter.
2. 1. For each delivery of alternative fuels directly into the fuel supply tank of a motor vehicle, the required record shall include a serially numbered invoice issued in not less than triplicate counterparts on which shall be printed or stamped with a rubber stamp the name and address of the alternative fuels supplier making such delivery and on which shall be shown, in spaces to be provided on that invoice, the:
    1. Date of delivery;
    2. Number of equivalent gallons and kind of alternative fuels so delivered;
    3. Total mileage recorded on the odometer or hub meter of the motor vehicle into which delivered; and
    4. Motor vehicle registration number of the motor vehicle, or the interstate user, or IFTA carrier user’s license number, if applicable.
  2. The invoice shall reflect that the tax has been paid or accounted for on each of the products delivered.
  3. 1. One (1) counterpart of the invoice required by this subsection shall be kept by the alternative fuels supplier making such delivery as a part of his or her record and for the period of time and purposes provided in this chapter.
    2. Another counterpart shall be delivered to the operator of the motor vehicle and carried in the cab compartment of the motor vehicle for inspection by the Secretary of the Department of Finance and Administration or his or her representatives until the fuel it covers has been consumed.
3. 1. Every person who operates a motor vehicle that is equipped to use motor fuels taxable under the Motor Fuel Tax Law, § 26-55-201 et seq., or equipped to use distillate special fuels taxable under the Special Motor Fuels Tax Law, § 26-56-101 et seq., and alternative fuels interchangeably in the propulsion of the motor vehicle shall carry in the cab compartment of the motor vehicle for inspection by the secretary or his or her representative not only the counterpart of the serially numbered invoice required under subsection (b) of this section for the delivery of alternative fuels into the fuel supply tanks of the motor vehicle but also an invoice or receipt from the seller for each delivery into the fuel supply tanks of the motor vehicle of motor fuels taxable under the Motor Fuel Tax Law, § 26-55-201 et seq., or of distillate special fuels taxable under the Special Motor Fuels Tax Law, § 26-56-101 et seq., which latter invoices or receipts shall show the same information as to date of delivery, quantity, odometer or hub meter mileage, and motor vehicle registration number as is required for the invoice covering alternative fuels.
  2. These invoices shall be carried with the motor vehicle until the types of fuels covered thereby have been consumed.
4. The willful issuance of any invoice required by this chapter, bill of sale, or receipt which is false, untrue, or incorrect in any material particular, or the alteration or changing except for errors, or forging any such invoice, bill of sale, or receipt, or any duplicate of any such receipt pertaining to alternative fuels, shall constitute a violation of this chapter.
5. All sales to users made pursuant to § 26-62-203 shall not require the carriage of an invoice by the user, provided that the secretary shall provide by rule another means of providing an indication that the tax on the fuel being utilized to propel the motor vehicle will ultimately be paid by the user to the alternative fuels supplier, who is required to remit such tax to the secretary.
1. Any alternative fuels supplier, user, interstate user, or IFTA carrier user who fails to keep the records, issue the invoices, or file the reports required by this chapter shall be prima facie presumed to have sold, delivered, or used for taxable purposes all alternative fuels shown by a verified audit by the Arkansas Department of Transportation, the Secretary of the Department of Finance and Administration, or any authorized representative.
2. 1. The secretary is authorized to fix or establish the amount of taxes, penalties, and interest due the State of Arkansas from any record or information available to the secretary, or to the Arkansas Department of Transportation, and if the tax claim as developed from that procedure is not paid, the claim and any audit made by the Arkansas Department of Transportation, the secretary, or an authorized representative, or any report filed by such alternative fuels supplier, user, interstate user, or IFTA carrier user shall be admissible in evidence in any suit or judicial proceedings filed by the secretary and shall be prima facie evidence of the correctness of said claim or audit.
  2. However, the prima facie presumption of the correctness of the claim may be overcome by evidence adduced by the alternative fuels supplier, user, interstate user, or IFTA carrier user.
1. For the purpose of determining whether an interstate user or IFTA carrier user owes alternative fuels tax or is entitled to a credit or refund, the licensed interstate user or licensed IFTA carrier user shall file a quarterly report on or before the twenty-fifth day of the month following the end of each calendar quarter, which shall be made on forms prescribed by the Secretary of the Department of Finance and Administration, which forms shall include such information as the secretary may require.
2. If it shall be determined by the quarterly report that the licensed interstate user or licensed IFTA carrier user has used alternative fuels in this state in excess of the number of equivalent gallons of the fuel upon which the Arkansas tax had been paid, the interstate user or IFTA carrier user shall remit to the secretary at the time of filing the report an excise tax at the rate as previously determined in accordance with § 26-62-201 per equivalent gallon for the taxable quarter multiplied by the number of equivalent gallons used on which the tax has not been paid.
3. If it shall be determined that the licensed interstate user or licensed IFTA carrier user has purchased more equivalent gallons of alternative fuels in this state than he or she has used in this state, then the licensed interstate user or licensed IFTA carrier user shall be entitled to a credit or refund at the rate as previously determined in accordance with § 26-62-201 per equivalent gallon for the taxable quarter for the number of excess equivalent gallons upon which the tax has been paid.
4. Licensed interstate users or licensed IFTA carrier users may not take credit on reports at a tax rate in excess of that actually paid.
5. 1. 1. For the purpose of determining whether such a licensed interstate user or licensed IFTA carrier user owes tax or is entitled to a credit or refund, such licensed user shall determine the average miles per equivalent gallon of alternative fuels used.
    2. The average miles per equivalent gallon shall be determined by dividing total miles traveled in all jurisdictions by the total equivalent gallons of alternative fuels used in all jurisdictions.
    3. Such licensed user shall then determine the total amount of alternative fuels used within the State of Arkansas by dividing the total number of miles traveled within the State of Arkansas by the average miles per equivalent gallon.
  2. The taxpayer's tax liability shall be calculated by multiplying the number of equivalent gallons of alternative fuels used within the State of Arkansas by the applicable tax rate for that calendar quarter per equivalent gallon.
  3. A taxpayer shall be entitled to credits against his or her tax liability for tax-paid alternative fuels purchased within the State of Arkansas.
6. 1. Whenever any licensed interstate user or licensed IFTA carrier user fails to maintain adequate mileage or fuel records, then for the purpose of determining the amount the licensed user owes the State of Arkansas for tax on alternative fuels used in this state as provided in this section, the number of equivalent gallons of alternative fuels used in this state shall be determined by an assessment based on the following mileage factors per equivalent gallon of alternative fuels, regardless of the type of alternative fuels, as compared to the appropriate class of vehicle set out in subdivision (f)(2) of this section.
  2. For the purposes of this section:
    1. All automobiles, except buses, with a capacity of fewer than eight (8) passengers shall be deemed to be Class A vehicles;
    2. All truck-type vehicles, except buses, with a factory rating and gross loaded weight of less than twenty-two thousand five hundred pounds (22,500 lbs.), shall be deemed to be Class B vehicles;
    3. All other vehicles, except buses, with a factory rating in excess of twenty-two thousand five hundred pounds (22,500 lbs.), or whose total gross loaded weight exceeds twenty-two thousand five hundred pounds (22,500 lbs.), shall be deemed to be Class C vehicles; and
    4. All buses rated and licensed as such shall be deemed to be Class D vehicles.
  3. The mileage factor per equivalent gallon of alternative fuels for:
    1. Class A vehicles shall be twelve (12) miles;
    2. Class B vehicles shall be eight (8) miles;
    3. Class C vehicles shall be five (5) miles; and
    4. Class D vehicles shall be six (6) miles.
  4. These mileage factors shall be utilized in conjunction with the Arkansas mileage as determined through an audit and based upon the best records available regardless of source.
7. For the purpose of determining the amount any unlicensed or unbonded user owes the State of Arkansas for tax on alternative fuels used in this state, only the above mileage factors per equivalent gallon of alternative fuels for the applicable vehicles shall be utilized.
8. 1. 1. If a quarterly report of a licensed interstate user or licensed IFTA carrier user results in a net credit, such user may elect to have the credit carried forward and applied against the alternative fuels tax due for the succeeding eight (8) quarters or until the credit is completely used, whichever occurs first.
    2. In the alternative, a taxpayer who is entitled to a net credit on his or her quarterly fuel tax report may elect to have the amount of credit refunded to him or her.
  2. A licensed interstate user or licensed IFTA carrier user who has a total tax liability for alternative fuels tax during the previous calendar year of less than one hundred dollars ($100) upon application to the secretary may obtain permission to report his or her alternative fuels tax liability on an annual basis. The annual report shall be due on or before the twenty-fifth day of the month following the end of each fiscal year.
9. The secretary shall prescribe the appropriate forms necessary for the administration of this chapter. The secretary may make appropriate rules necessary to ensure the accurate reporting of the alternative fuels tax.
1. 1. The Secretary of the Department of Finance and Administration shall quarterly estimate the amount necessary to pay refunds to licensed interstate users and licensed IFTA carrier users of alternative fuels who are entitled to refunds with respect to alternative fuels taxes paid in this state as authorized in § 26-62-209, and upon certification by the secretary, the Treasurer of State shall transfer from the gross amount of alternative fuels taxes collected each month the amount to the Interstate Alternative Fuels Refund Fund, which is established on the books of the State Treasury, from which the Department of Finance and Administration shall make refunds as provided by law.
  2. The transfers from the gross alternative fuels taxes collected each month shall be after deducting allowances for bad checks or claims but before making any other distribution as provided by law.
2. All warrants drawn against the fund which are not presented for payment within one (1) year of issuance shall be void.
3. Neither the secretary nor any member or employee of the department shall be held personally liable for making any refund by reason of a fraudulent claim's being filed as a basis for such refund.
4. The secretary in consultation with the Director of State Highways and Transportation is authorized to promulgate rules and to prescribe the necessary forms required for the administration of claims for tax refunds from licensed interstate users or licensed IFTA carrier users of alternative fuels in this state as authorized by law, which rules shall be in conformance with the following requirements:
  1. The secretary shall first determine with respect to each refund claim filed that the bond of the interstate user or IFTA carrier user is adequate to compensate the State of Arkansas for any losses with respect to the recovery of any refunds illegally claimed by such user, and the secretary may require the increase of the bond if the secretary determines it to be inadequate before approving any such claim for refund;
  2. Each licensed interstate user or licensed IFTA carrier user of alternative fuels claiming refunds shall maintain adequate records to substantiate each claim for refund, and the secretary may reject any claim for refund if the secretary determines the applicant has not maintained adequate records or has not conformed to the rules of the department in filing the claim therefor;
  3. Each claim for refund must be upon the request of the licensed interstate user or licensed IFTA carrier user, which shall be verified by such user as to its accuracy and validity;
  4. 1. Each quarterly report filed by a licensed interstate user or licensed IFTA carrier user of alternative fuels with the department shall reflect thereon the amount of alternative fuels purchased for use in Arkansas during the quarter, the number of equivalent gallons of alternative fuels upon which taxes are due the State of Arkansas for the quarter, and the excess equivalent gallons upon which such user is entitled to refunds.
    2. At the end of each calendar quarter, the licensed interstate user or licensed IFTA carrier user may apply for a refund with respect to the number of equivalent gallons of alternative fuels upon which the alternative fuels taxes have been paid during the calendar quarter for which the licensed interstate user or licensed IFTA carrier user is entitled to a refund; and
  5. The secretary is authorized to promulgate any such rules the secretary deems desirable in consultation with the director regarding refunds to licensed interstate users and IFTA carrier users.
1. Any unlicensed alternative fuels user, unless exempt from the tax levied herein, operating an out-of-state motor vehicle, upon entering the State of Arkansas, at the point of entry shall secure a copy of an entry slip from the Secretary of the Department of Finance and Administration or his or her authorized agent or employee.
2. The entry slip shall be signed by the secretary or his or her authorized agent or employee, and the entry slip shall also be signed by the driver of the vehicle.
3. The entry slip shall contain the following information:
  1. Name and address of the owner or the operator of the vehicle;
  2. State of registration;
  3. License number;
  4. Odometer reading;
  5. Destination and point of leaving state; and
  6. Description of vehicle.
4. The entry slip shall remain in the vehicle for the remainder of the trip over the highways of this state and shall be produced for the inspection of the secretary or his or her authorized employee or representative, at any point within the state and shall also be produced at the port of exit to the secretary or his or her authorized agent or employee, for determination of any alternative fuels taxes due the state.
5. For the purpose of determining the amount the interstate user owes the State of Arkansas for tax on alternative fuels used in this state as provided in this section, the number of equivalent gallons of alternative fuels used in this state shall be determined by an assessment based on the mileage factors per equivalent gallon of alternative fuels set out in § 26-62-209(f) compared to the appropriate class of vehicle set out in § 26-62-209(f).
6. The alternative fuels tax levied by this chapter shall be paid upon all such fuels used to propel out-of-state motor vehicles upon the highways of this state.
7. The tax shall be paid by the owner or operator of the motor vehicle in either of the following ways, at the option of the owner or operator:
  1. 1. By the purchase of a sufficient amount or quantity, as determined above, of alternative fuels from an alternative fuels supplier within the State of Arkansas to propel the vehicle the number of miles which the vehicle travels upon the highways of this state.
    2. At the time of the purchase of the fuels, the owner or operator of such vehicle shall obtain from the alternative fuels supplier from whom purchased an invoice or sales ticket, on forms approved by the secretary, which shall contain the:
      1. Name and address of the seller of the alternative fuels;
      2. Name and address of the purchaser;
      3. Date of purchase; and
      4. Amount or quantity and type of alternative fuels purchased.
    3. The invoice or sales ticket shall remain in the vehicle for the remainder of the trip over the highways of this state. The invoice or sales ticket shall be preserved and retained by the owner or operator for a period of not less than three (3) years and shall be produced for the inspection and examination of the secretary or his or her authorized agent or employee, at any reasonable time and place, either within or without this state, upon proper demand therefor;
  2. 1. By the payment to the secretary or to his or her agent, representative, or employee of the amount of tax which would be due upon a sufficient quantity, as determined above, of alternative fuels to propel the vehicle over the highways of this state.
    2. At the time of payment of the tax, the secretary or his or her employee or representative shall issue to the person paying the tax a receipt showing:
      1. The amount of tax paid;
      2. The name and address of the owner or operator of the vehicle;
      3. A description of the vehicle, including license number and state of registration;
      4. The point at which the vehicle entered upon the highways of this state;
      5. The destination and the place where the vehicle is to leave the highways of this state; and
      6. Any other information which the secretary may require,
    3. The receipt shall remain in the vehicle for the remainder of the trip over the highways of this state and thereafter shall be preserved and retained by the owner or operator for a period of not less than three (3) years and shall be produced for the inspection of the secretary or his or her authorized agent or representative, at any reasonable time and place, either within or without this state, upon proper demand.
8. 1. If a person who has not obtained an alternative fuels license from this state, and who is nevertheless determined an alternative fuels user, leaves the State of Arkansas by a state highway or other road not equipped with a permanent port of entry or exit and has not paid the alternative fuels tax or has not purchased tax-paid alternative fuels from a licensed alternative fuels supplier in an amount equal to the number of equivalent gallons used upon the highways of the State of Arkansas, the person shall be liable for the payment of the tax due as determined above together with the penalties as set out in § 26-62-105.
  2. If an unlicensed alternative fuels user is within one (1) mile of the state line on the way out of the state and does not have in his or her possession a form issued by a licensed alternative fuels supplier showing the number of equivalent gallons purchased equal to the amount used in traveling upon the highways of the State of Arkansas, it shall be prima facie evidence of his or her failure to comply with the requirements of this chapter, and he or she shall be liable for the payment of the tax due, plus the fine as set out in § 26-62-106.
  3. In the event an unlicensed alternative fuels user enters the State of Arkansas via a state highway not equipped with a permanent port of entry, and the driver of the vehicle does not receive an entry form, then the burden of proof of the point of entry and time of entry for the purpose of determining the miles traveled and the tax due shall be upon the driver or owner of the vehicle.
1. In order to enforce the provisions of this chapter, the Secretary of the Department of Finance and Administration or his or her authorized representative is empowered to stop any motor vehicle which appears to be operating with alternative fuels for the purpose of examining the invoices or other documents required by this chapter, or by rule, and for such other investigative purposes reasonably necessary to determine whether the taxes imposed by this chapter have been paid or whether the vehicle is being operated in compliance with the provisions of this chapter.
2. If after examination or investigation it is determined by the secretary or his or her authorized representative that the tax imposed by this chapter has not been paid with respect to the alternative fuels being used in the vehicle, the secretary or his or her representative shall immediately assess the tax due, together with the penalty hereinafter provided, to the owner of the vehicle and give the owner written notice of the assessment by handing it to the driver of the vehicle.
3. The secretary or his or her representative is empowered to impound any vehicle found to be operating in violation of this chapter by a person other than a person who has furnished the bond required of users by § 26-62-204 until such time as any tax assessed as provided herein has been paid.
1. It is unlawful and a violation of this chapter to operate with alternative fuels any motor vehicle licensed for highway operation on which an odometer or hub meter is not kept at all times in good operating condition to correctly measure and register the miles traveled by the motor vehicle.
2. It shall be unlawful for any person to operate with alternative fuels any vehicle of Arkansas domestic registry unless he or she has in his or her possession an invoice, if required, for the alternative fuels and the invoice meets the requirements of § 26-62-207, or, if the user has purchased such alternative fuels pursuant to § 26-62-203, he or she has in his or her possession the required documents mandated by the provisions of § 26-62-207(e).
3. 1. In addition to any other penalties which may be incurred, there is levied a specific penalty of twenty-five dollars ($25.00) for each violation of the provisions of this section.
  2. This penalty shall be assessed by the Secretary of the Department of Finance and Administration or his or her representative and shall be collected in the same manner as is provided for the collection of tax in § 26-62-212.
1. Any alternative fuels supplier, garage, mechanic, owner, or operator of a motor vehicle who converts or causes a vehicle to be converted to enable the vehicle to be operated on any type of alternative fuels shall report the conversion to the Secretary of the Department of Finance and Administration on forms prescribed by the secretary, which shall include, but not be limited to, the model, make, license number, and vehicle identification number of the converted vehicle within ten (10) days after the conversion.
2. The converting or equipping of a vehicle for natural gas propulsion shall be in compliance with rules to be made and promulgated by the secretary.
3. 1. It shall be unlawful for any person to operate any motor vehicle which has been converted or equipped to use alternative fuels unless the vehicle has been reported to the secretary and any permit, if required by this chapter of that person, has been obtained.
  2. If any owner or operator fails to report a conversion of a vehicle to the secretary within the time prescribed above, such person shall be assessed a penalty of two hundred fifty dollars ($250) which shall be in addition to any criminal penalty in this chapter.
1. The Secretary of the Department of Finance and Administration shall administer this chapter.
2. The secretary shall prescribe forms and promulgate rules for the proper enforcement of this chapter, including without limitation the manner and time the taxes levied by this chapter shall be collected, reported, and paid and how a sale will be sourced.
3. Except as otherwise provided in this chapter, any law or rule relating to the administration, enforcement, or collection of a tax levied under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., applies to this chapter if it is applicable.
1. The administration cost of this chapter shall not exceed three percent (3%) of the actual revenues collected under this chapter.
2. If any funds appropriated for the administration of this chapter remain in the possession of the Secretary of the Department of Finance and Administration at the end of each fiscal year that have not been actually used in the administration of this chapter, then the funds shall be remitted by the secretary to the Treasurer of State for distribution in the same manner and for the same purposes provided for in § 26-63-106.
1. Except as otherwise provided in this chapter, all taxes, interest, penalties, and costs received by the Secretary of the Department of Finance and Administration under this chapter are general revenues and shall be deposited into the State Treasury to the credit of the State Apportionment Fund.
2. The Treasurer of State shall allocate and transfer the general revenues described in subsection (a) of this section to the various State Treasury funds participating in general revenues in the respective proportions to those funds as provided by and to be used for the respective purposes set forth in the Revenue Stabilization Law, § 19-5-101 et seq.
1. It is unlawful for any taxpayer to transact business within this state prior to registering with the Secretary of the Department of Finance and Administration.
2. The secretary may promulgate rules to implement this section.
1. 1. Upon discontinuance of a business by sale or otherwise, any taxpayer registered to operate under this chapter shall notify the Secretary of the Department of Finance and Administration in writing and remit any unpaid or accrued taxes due under this chapter.
  2. Failure to pay any unpaid or accrued taxes due under this chapter is sufficient cause for the secretary to refuse to allow the taxpayer to engage in or transact any other business in this state.
  3. In the case of a sale of any business, the tax levied by this chapter is due at the time of the sale of the fixtures and equipment incident to the business, and any tax due under this chapter constitutes a lien against the stock and the fixtures and equipment in the possession of the purchaser of the fixtures and equipment or any other third party until the tax due under this chapter is paid.
2. The secretary shall not register a taxpayer to continue to conduct a business until all tax due under this chapter has been settled and paid.
1. As used in this section:
  1. “Motor vehicle” means any vehicle required to be licensed for highway use under Arkansas law; and
  2. “Short-term rental” means a rental or lease of tangible personal property for a period of less than thirty (30) days, except rentals or leases of motor vehicles, trailers, or farm machinery and equipment.
2. 1. In addition to the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., there is levied a short-term rental tax of one percent (1%) on the gross receipts received from the short-term rental of tangible personal property.
  2. The tax levied by this section is applicable to a short-term rental regardless of whether the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., was paid on the rented tangible personal property at the time of purchase.
3. The tax levied by this section does not apply to the lease or rental of:
  1. A diesel truck leased or rented for commercial shipping; and
  2. Farm machinery or farm equipment leased or rented for a commercial purpose.
4. The tax levied by this section does not apply to a short-term rental of tangible personal property that is subject to the tourism tax levied in § 26-63-401 et seq.
1. 1. 1. In addition to the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., there is levied a rental vehicle tax.
    2. The rental vehicle tax is levied on the gross receipts or gross proceeds derived from the rental of a motor vehicle required to be licensed that is leased for a period of less than thirty (30) days.
    3. The gross receipts or gross proceeds derived from a rental described in subdivision (a)(1)(B) of this section is taxable whether or not the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., was paid at the time of registration.
  2. The gross receipts or gross proceeds derived from the sale of a motor vehicle to a person engaged in the business of renting a motor vehicle required to be licensed is exempt from taxation under the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and any municipal or county sales taxes if the motor vehicle is used exclusively for the purpose of rentals for periods of less than thirty (30) days.
2. 1. In addition to the rate in subsection (c) of this section, the rental vehicle tax is levied at the rate of five percent (5%) and the rate of any applicable municipal or county taxes.
  2. Except as provided otherwise in this section, the rental vehicle tax shall be collected, reported, and paid in the same manner and at the same time as prescribed by this chapter.
  3. 1. The rental vehicle tax shall be remitted to the Secretary of the Department of Finance and Administration and, except for the amount equal to any municipal or county taxes, shall be deposited into the State Treasury as general revenues.
    2. The amount of the rental vehicle tax which is based on the municipal and county sales taxes shall be remitted to the city or county in the same manner as for municipal and county sales taxes.
3. 1. There is also imposed an additional rental vehicle tax at the rate of five percent (5%) on the gross receipts or gross proceeds derived from the rental of a motor vehicle required to be licensed that is leased for a period of less than thirty (30) days.
  2. 1. 1. The additional rental vehicle tax shall be remitted to the secretary, who shall deposit seventy-five percent (75%) of the net revenues derived from the additional rental vehicle tax into the Arkansas Public Transit Trust Fund.
      2. The moneys in the fund resulting from a deposit described in subdivision (c)(2)(A)(i) of this section shall be used by the Arkansas Department of Transportation for the purpose of acquiring federal matching funds for the purchase of public transportation vehicles, for public transit equipment or facilities, and for the operation of the Federal Transit Administration assistance programs.
    2. The remaining twenty-five percent (25%) of the revenues shall be deposited into the Division of Elementary and Secondary Education Public School Fund Account to be used exclusively for teacher salaries.
4. Both the rental vehicle tax and the additional rental vehicle tax levied by this section do not apply to the lease or rental of:
  1. A diesel truck leased or rented for commercial shipping;
  2. Farm machinery or farm equipment leased or rented for a commercial purpose; and
  3. A gasoline-powered or diesel-powered truck leased or rented for residential moving or shipping.
1. 1. In addition to the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., there is levied a long-term rental vehicle tax at the rate of one and five-tenths percent (1.5%) on the gross receipts or gross proceeds derived from a rental of a motor vehicle required to be licensed and that is leased for a period of thirty (30) days or more.
  2. The gross receipts or gross proceeds derived from the rental described in subdivision (a)(1) of this section are taxable regardless of whether the gross receipts tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., was paid at the time of registration.
2. If the Chief Fiscal Officer of the State certifies that three percent (3%) or more of all new motor vehicles registered in Arkansas during a calendar year are leased vehicles based on information and statistics from a reliable source, such as R.L. Polk & Co., then the long-term rental vehicle tax shall expire on June 30 of the fiscal year following the calendar year for which the certification is made.
3. The long-term rental vehicle tax shall be remitted to the Secretary of the Department of Finance and Administration and shall be deposited into the State Treasury as general revenues.
4. The long-term rental vehicle tax does not apply to:
  1. A diesel truck rented or leased for commercial shipping;
  2. Farm machinery or farm equipment rented or leased for a commercial purpose; or
  3. A gasoline-powered or diesel-powered truck rented or leased for residential moving or shipping.
1. The gross receipts or gross proceeds derived from the rental or sale of tangible personal property or a taxable service subject to the tourism tax levied by this subchapter by the State of Arkansas, any county, any municipality, or any other political subdivision of the state are not exempt from the tax.
2. 1. The gross receipts or gross proceeds derived by a church or charitable organization from the admission price to a tourist attraction shall not be exempt from the tax levied by this subchapter.
  2. However, the gross receipts or gross proceeds derived from the sale or rental of other tangible personal property or a taxable service by a church or charitable organization shall be exempt from the tourism tax imposed by this subchapter, except when the organization is engaged in business for a profit.
1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a trust fund to be known as the “Tourism Development Trust Fund”.
2. The revenues derived from the tourism tax levied by this subchapter shall be remitted to the Treasurer of State who shall deposit the revenues into the State Treasury as special revenues and shall credit the revenues to the fund.
3. All revenues collected under this subchapter and credited to the fund shall be used by the Department of Parks, Heritage, and Tourism exclusively for the promotion of tourism in Arkansas.
1. As used in this section:
  1. “Average wholesale selling price” means the United States Gulf Coast regular average wholesale selling price of motor fuel as published in an index by the United States Energy Information Administration or other similar reliable index if the index published by the United States Energy Information Administration is no longer available; and
  2. “Motor fuel” means the same as defined in § 26-55-202.
2. In addition to the taxes levied in §§ 26-55-205, 26-55-1002, 26-55-1006, 26-55-1201, and 26-56-601, there is levied a wholesale sales tax upon the average wholesale selling price of motor fuel at the rate determined under this section.
3. 1. On or before October 1, 2019, the Secretary of the Department of Finance and Administration shall determine the rate of the wholesale sales tax levied under this section by multiplying the twelve-month average wholesale selling price of motor fuel for the period of January 1, 2018, through December 31, 2018, by one and six-tenths percent (1.6%).
  2. The wholesale sales tax rate determined under this subsection is effective for the period of October 1, 2019, through September 30, 2020.
  3. To make the collection of the wholesale sales tax levied under this subsection more efficient, the secretary shall convert the wholesale sales tax calculated under subdivision (c)(1) of this section to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
4. 1. Beginning July 1, 2020, and each July 1 thereafter, the secretary shall calculate the wholesale sales tax levied under this section by multiplying the twelve-month average wholesale selling price of motor fuel for the period of January 1 through December 31 of the immediately preceding year by one and six-tenths percent (1.6%).
  2. The wholesale sales tax rate calculated under this subsection is effective for the twelve-month period beginning on October 1 of the year in which the calculation is made under this subsection.
  3. To make the collection of the wholesale sales tax levied under this subsection more efficient, the secretary shall convert the wholesale sales tax calculated under subdivision (d)(1) of this section to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
  4. 1. If the twelve-month average wholesale selling price calculated in subdivision (d)(1) of this section is more than the twelve-month average wholesale selling price of the year preceding that calculation, the secretary shall convert the resulting wholesale sales tax to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
    2. If the wholesale sales tax rate calculated in subdivision (d)(1) of this section would result in an increase in the wholesale sales tax of more than one-tenth of one cent (0.1¢) per gallon of motor fuel when converted to a cent-per-gallon amount and rounded to the nearest one-tenth of one cent (0.1¢), the percentage used in the calculation of the wholesale sales tax rate under subdivision (d)(1) of this section shall be limited to the highest percentage that results in a cent-per-gallon amount that does not exceed one-tenth of one cent (0.1¢) for that twelve-month period when rounded to the nearest one-tenth of one cent (0.1¢).
  5. If the twelve-month average wholesale selling price used for the calculation in subdivision (d)(1) of this section is less than the twelve-month average wholesale selling price of the preceding year, the calculation under subdivision (d)(1) of this section shall not be made, and the wholesale sales tax rate for the twelve-month period beginning October 1 shall be equal to the wholesale sales tax rate for the immediately preceding twelve-month period.
5. The wholesale sales tax levied under this section shall be paid by motor fuel dealers to motor fuel distributors, who shall collect, report, and remit the tax in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of motor fuel taxes levied in Title 26, Chapter 55, of the Arkansas Code.
6. By August 1 of each year, the Department of Finance and Administration shall publish the cent-per-gallon wholesale sales tax to be collected by motor fuel dealers and paid to motor fuel distributors beginning on October 1 of that year under this section and shall notify motor fuel dealers and motor fuel distributors of the published amount.
1. As used in this section:
  1. “Average wholesale selling price” means the United States Gulf Coast regular average wholesale selling price of distillate special fuel as published in an index by the United States Energy Information Administration or some other similar reliable index if the index published by the United States Energy Information Administration is no longer available; and
  2. “Distillate special fuel” means the same as defined in § 26-56-102, except that it does not include distillate special fuel used for off-road purposes as identified in § 26-56-224.
2. In addition to the taxes levied in §§ 26-56-201, 26-56-502, and 26-56-601, there is levied a wholesale sales tax upon the average wholesale selling price of distillate special fuel at the rate determined under this section.
3. 1. On or before October 1, 2019, the Secretary of the Department of Finance and Administration shall determine the rate of the wholesale sales tax levied under this section by multiplying the twelve-month average wholesale selling price of distillate special fuel for the period of January 1, 2018, through December 31, 2018, by two and nine-tenths percent (2.9%).
  2. The wholesale sales tax rate determined under this subsection is effective for the period of October 1, 2019, through September 30, 2020.
  3. To make the collection of the wholesale sales tax levied under this subsection more efficient, the secretary shall convert the wholesale sales tax calculated under subdivision (c)(1) of this section to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
4. 1. Beginning July 1, 2020, and each July 1 thereafter, the secretary shall calculate the wholesale sales tax levied under this section by multiplying the twelve-month average wholesale selling price of distillate special fuel for the period of January 1 through December 31 of the immediately preceding year by two and nine-tenths percent (2.9%).
  2. The wholesale sales tax rate calculated under this subsection is effective for the twelve-month period beginning on October 1 of the year in which the calculation is made under this subsection.
  3. To make the collection of the wholesale sales tax levied under this subsection more efficient, the secretary shall convert the wholesale sales tax calculated under subdivision (d)(1) of this section to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
  4. 1. If the twelve-month average wholesale selling price calculated in subdivision (d)(1) of this section is more than the twelve-month average wholesale selling price of the year preceding that calculation, the secretary shall convert the resulting wholesale sales tax to a cent-per-gallon amount rounded to the nearest one-tenth of one cent (0.1¢).
    2. If the wholesale sales tax rate calculated in subdivision (d)(1) of this section would result in an increase in the wholesale sales tax of more than one-tenth of one cent (0.1¢) per gallon of distillate special fuel when converted to a cent-per-gallon amount and rounded to the nearest one-tenth of one cent (0.1¢), the percentage used in the calculation of the wholesale sales tax rate under subdivision (d)(1) of this section shall be limited to the highest percentage that results in a cent-per-gallon amount that does not exceed one-tenth of one cent (0.1¢) for that twelve-month period when rounded to the nearest one-tenth of one cent (0.1¢).
  5. If the twelve-month average wholesale selling price used for the calculation in subdivision (d)(1) of this section is less than the twelve-month average wholesale selling price of the preceding year, the calculation under subdivision (d)(1) of this section shall not be made, and the wholesale sales tax rate for the twelve-month period beginning October 1 shall be equal to the wholesale sales tax rate for the immediately preceding twelve-month period.
5. The wholesale sales tax levied under this section shall be paid by distillate special fuel dealers to distillate special fuel suppliers, who shall collect, report, and remit the tax in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of distillate special motor fuel taxes levied in Title 26, Chapter 56, of the Arkansas Code.
6. By August 1 of each year, the Department of Finance and Administration shall publish the cent-per-gallon wholesale sales tax to be collected by distillate special fuel dealers and paid to distillate special fuel suppliers beginning on October 1 of each year under this section and shall notify distillate special fuel dealers and distillate special fuel suppliers of the published amount.
1. 1. Each city and county that expends revenues distributed under this chapter shall submit a report to the Secretary of the Department of Finance and Administration no later than March 15 of each year detailing the following for the previous calendar year:
    1. Amount of revenues received under this chapter;
    2. Expenditures made from the revenues received under this chapter; and
    3. Projects funded using revenues received under this chapter.
  2. The secretary may undertake an investigation of the expenditures reported by the cities and counties under subdivision (a)(1) of this section, including without limitation using the audit procedures under the Arkansas Tax Procedure Act, § 26-18-101 et seq., to verify compliance with this chapter.
2. The Arkansas Department of Transportation shall make a report available to the Governor and the Legislative Council no later than November 1 of each year detailing the expenditures of the revenues distributed to the department under this chapter, including without limitation the expenditures made from the revenues received under this chapter and the projects funded using revenues received under this chapter.
1. 1. In addition to all other authority of local governments to levy taxes provided by law, any county acting through its quorum court or any municipality acting through its governing body may levy any tax not otherwise prohibited by law.
  2. However, no ordinance levying an income tax authorized by this subchapter or any other tax not authorized shall be valid until adopted at a special or general election by the qualified electors of the city or in the area of the county where the tax is to be imposed, as the case may be.
2. A local government shall not levy a tax on fuel, tobacco, or alcoholic beverages except as authorized by law.
3. 1. The provisions of this subchapter shall not apply to lands, buildings, facilities, and equipment, also known as licensed facilities, located in this state used by a franchise holder at any time for licensed horse or dog racing in this state nor to any income of the franchise holder derived from the use of such licensed facilities from every source whatever except the sale of food and beverages at such licensed facilities.
  2. Nor shall this subchapter apply to any moneys derived by the franchise holder from pari-mutuel wagering at such licensed facilities, but this provision shall not exempt a franchise holder from a general income tax levied against all taxpayers in the taxing county or municipality.
4. Nothing in this subchapter shall be construed to diminish the existing powers of county governments or city governments.
5. Any taxes proposed by ordinance at the quorum court of the county shall be designed to benefit not only the county but also the municipalities located wholly or partially within the county.
6. Nothing in this subchapter shall terminate, repeal, or otherwise affect a gross receipts tax on the receipts derived from hotels, motels, and restaurants located within any city levied under the provisions of the Advertising and Promotion Commission Act, § 26-75-601 et seq.
7. Until otherwise authorized by the General Assembly, cities and counties shall have no authority to levy any new sales or use taxes after April 1, 1977.
8. Nothing in this subchapter shall limit the authority of municipalities to assess or contract for franchise fees pursuant to §§ 14-54-704 and 14-200-101 or any other enabling legislation related to franchise fees.
1. 1. A local government may levy a tax upon the income of its individual residents and corporations and individuals owning a business within the boundaries of the local government levying the tax, but no tax shall be levied on the income of corporations or other business entities in any local governmental unit unless a like tax is levied on the income of individual residents of such governmental unit.
  2. However, in the event a municipality levies an income tax or other tax authorized by this subchapter, with the exception of the sales and use tax, the county within which such municipality is located may not levy or collect that tax being levied by the municipality within the corporate limits of such municipality.
2. 1. For individual taxpayers, the rate of tax on income authorized by this section shall be a single percentage of the income tax payable to the State of Arkansas.
  2. 1. For all domestic or foreign corporations, the rate of tax on income authorized by this section shall be a percentage of the income tax payable to the State of Arkansas, calculated on an apportionment formula which shall consist of a fraction, the numerator of which is the property factor, plus the payroll factor, plus the sales factor and the denominator of which is three (3).
    2. The sales factor is a fraction, the numerator of which is the total sales of the corporation within the local government during the tax period and the denominator of which is the total sales of the corporation within the state for the same tax period.
    3. The payroll factor is a fraction, the numerator of which is the total amount paid in the local government during the tax period by the corporation for compensation and the denominator of which is the total compensation paid within the state for the same tax period.
    4. The property factor is a fraction, the numerator of which is the average value of the corporation's real and tangible personal property owned or rented and used in the local government during the tax period and the denominator of which is the average value of all the corporation's real and tangible personal property owned or rented and used within the state during the same tax period.
3. However, a corporation located within the boundaries of a local government and subject to the tax under this section, having no sales, payroll, and property in another local government, shall be permitted the election of being taxed in the same manner as an individual taxpayer under this section.
1. The Secretary of the Department of Finance and Administration shall collect the tax levied under this subchapter and shall perform all functions incident to the administration, collection, enforcement, and operation of the taxes in the manner and following the procedures that are prescribed for the corresponding state taxes.
2. The secretary shall deduct from all revenues collected pursuant to this subchapter up to three percent (3%) as a cost of collection.
1. There are created on the books of the Treasurer of State, the Auditor of State, and the Secretary of the Department of Finance and Administration a Revenue Local Tax Revolving Fund and a Revenue Local Tax Operating Fund.
2. All taxes collected by the secretary under this subchapter shall be deposited into the State Treasury and credited to the Revenue Local Tax Revolving Fund and transmitted at least quarterly in each state fiscal year to the local government levying the tax.
1. 1. No citizen in the State of Arkansas in a county, city, or local community on the grounds of race, color, religion, or national origin shall be excluded from participation in, be denied the benefits of, or be subjected to discrimination of services or participation under any program or activity receiving Arkansas tax funds.
  2. Each county, city, local community, or agency within the State of Arkansas which is empowered to extend financial assistance to any program or activity, by the way of Arkansas state, county, or city tax funds shall not engage in any practice of discrimination in participation, employment, services, or in any other human involvement.
2. Violation of this section shall result in the impoundment of the state, county, or city tax funds so allotted.
1. 1. 1. In order to promote the expeditious and effective collection of any tax levied under authority of this subchapter, a local government may enter into exchange of tax information agreements with the:
      1. Internal Revenue Service;
      2. Secretary of the Department of Finance and Administration; or
      3. Tax administrator of another state or political subdivision.
    2. Any such information exchanged shall be utilized solely for the purpose of enforcing tax laws.
  2. In all other matters concerning the release of tax information, including its release to law enforcement agencies, the local government shall be governed by state law in the same manner as is the secretary.
2. Any person who sells or unlawfully divulges to another person or organization any information acquired through the collection of a tax levied under authority of this subchapter is guilty of a Class A misdemeanor and subject to the penalties therefor as defined in the Arkansas Criminal Code.
1. Any county, city of the first class, city of the second class, or incorporated town may adopt an ordinance levying a special local sales or use tax for the use of such county or city or town in an amount not to exceed one-fourth of one percent (.25%), except that no city or town shall levy the tax herein authorized unless and until the quorum court of the county wherein said city or town is situated fails to pass an ordinance levying said tax on a county-wide basis or the county levying ordinance is defeated by the voters in a county-wide election.
2. The ordinance levying a tax herein authorized shall identify and set forth the purpose for which the levy is made.
1. On the date of the adoption of an ordinance levying a special local sales and use tax for the benefit of a county, city, or town, the county, city, or town by ordinance shall provide for calling and holding a special election on the question.
2. The special election shall be in accordance with § 7-11-201 et seq. and conducted in the manner provided by law for all county or municipal elections unless otherwise specified in this section.
3. The special election shall be called for a date not later than one hundred twenty (120) days from the date of the action of the governing body in establishing the date of the special election.
4. 1. The governing body of the county or municipality shall notify the county board of election commissioners that the measure has been referred to a vote of the people and shall submit a copy of the ballot title to the county board of election commissioners.
  2. The ballot title to be used at the special election shall be substantially in the following form:
1. The tax authorized by this section and §§ 26-73-110 and 26-73-111 shall be in addition to all other sales and use taxes now or hereafter authorized for counties, cities of the first class, cities of the second class, and incorporated towns.
2. With the exception of the purpose for which the tax herein authorized may be used, all provisions of § 26-75-201 et seq., being enabling legislation for cities and incorporated towns to levy and collect local sales and use taxes, and § 26-74-201 et seq. and § 26-74-301 et seq., being enabling legislation for counties to levy and collect local sales and use tax, shall be applicable and controlling in the levy, election, administration, collection, and enforcement of the tax herein authorized, except that the proceeds of a levy made by a county pursuant to this section and §§ 26-73-110 and 26-73-111 shall not be distributed on a per capita basis as provided for by § 26-74-201 et seq. and § 26-74-301 et seq., but shall be remitted and transmitted to the county treasurer and used for the purposes and in the percentage amounts as provided for and set forth in the levying ordinance.
3. A county, city of the first class, city of the second class, or incorporated town shall use the proceeds of the tax authorized by this section and §§ 26-73-110 and 26-73-111 only to provide the public service and purpose of public mass transportation systems and facilities.
1. 1. 1. In lieu of using all or a portion of its authority to levy a sales and use tax solely to pay bonded debt under § 14-164-327, the governing body of any municipality or county may adopt an ordinance levying a tax in the amount of one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), or one percent (1%) upon all taxable sales of property and services subject to the tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and upon the privilege of storing, using, distributing, or consuming within this state any tangible personal property which is subject to the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq. The ordinance or ordinances must specify that the tax is being levied under this law.
    2. By levying a tax under this section, the municipality or county levying a tax hereunder shall lose its authority to levy up to a one-percent sales and use tax under § 14-164-327 solely to pay bonded debt only to the extent of the tax levied hereunder.
  2. The proceeds of a tax levied under this section may be used for one (1) or more of the following:
    1. With respect to a capital improvement, solid waste management system as defined in § 8-6-203, part of a solid waste management system as defined in § 8-6-203, or any combination of a capital improvement, solid waste management system as defined in § 8-6-203, or part of a solid waste management system as defined in § 8-6-203, financing of one (1) or more of the following:
      1. Operation;
      2. Maintenance; or
      3. Rental expense;
    2. Securing the repayment of bonds by the municipality or county issued under §§ 14-164-301 — 14-164-339; or
    3. Acquiring or constructing capital improvements of a public nature for no more than twenty-four (24) months.
2. To the extent permitted by this section, a governing body levying a tax under this section shall follow the procedures prescribed by the Local Government Bond Act of 1985, § 14-164-301 et seq., and the tax shall be collected, reported, and remitted in the same manner and at the same time as a tax levied under the Local Government Bond Act of 1985, § 14-164-301 et seq.
3. 1. 1. A municipality or county levying a sales and use tax under this section may abolish the tax or both abolish the tax and levy a new sales and use tax at a lower rate after an election called in the same manner as provided in the Local Government Bond Act of 1985, § 14-164-301 et seq., or by a petition of the qualified voters of the municipality or county which levied the tax. As to a petition of the qualified voters, the provisions of Arkansas Constitution, Amendment 7, shall govern.
    2. A new sales and use tax levied under this subsection shall be at a rate authorized by subsection (a) of this section.
  2. This section shall also apply to any tax levied by ordinance adopted prior to February 28, 1992, so long as:
    1. The ordinance levying the tax recited that the tax was being levied under this section; and
    2. The tax was approved at a general or special election for one (1) or more of the uses set forth in subdivision (a)(2) of this section. The effect of this provision is for such a tax to be levied for the approved uses, whether or not the ordinance levying the tax was adopted and the election held prior to February 28, 1992, from and after the date a sales and use tax would otherwise become effective under the Local Government Bond Act of 1985, § 14-164-301 et seq.
  3. This section does not prohibit or affect the ability of a municipality or county from levying a sales and use tax under § 26-74-201 et seq., § 26-74-301 et seq., § 26-75-201 et seq., § 26-75-301 et seq., and the Local Government Bond Act of 1985, § 14-164-301 et seq., and using all or a portion of the proceeds of the sales and use tax to do one (1) or more of the following with respect to a capital improvement of a public nature:
    1. Operate;
    2. Maintain; or
    3. Finance.
  4. In any municipality or county in which a local sales and use tax has been adopted under this section, and all or a portion of the tax is pledged to secure the payment of bonds, that portion of the tax pledged to retire the bonds shall not be repealed, abolished, or reduced so long as the bonds are outstanding.
  5. 1. If no election challenge is filed within thirty (30) days of the date of the publication of the proclamation of the results of the election under this subsection, the abolition of the tax and the levy of a new tax, if any, shall become effective on the first day of the first month of the calendar quarter subsequent to the expiration of the thirty-day period for challenge in § 14-164-329.
    2. 1. In the event of an election contest, the tax shall be collected as prescribed in this subsection unless enjoined by court order.
      2. Hearings of such matters of litigation shall be advanced on the docket of the courts and disposed of at the earliest practicable time.
4. Nothing herein shall be construed to expand or limit the aggregate rate at which a sales and use tax may be levied by municipalities and counties under laws in effect on January 1, 1992.
1. When a city or county calls an election on the issue of a sales and use tax, it may designate on the ballot that a portion of the tax will be dedicated to a school district or districts located wholly or partially within the city or county on a per capita basis.
2. 1. The Treasurer of State shall transmit to the treasurer or fiscal officer of each such local school district that district's share of the local sales and use taxes collected under this section at the same time as the city and county taxes are transmitted.
  2. Funds so transmitted may be used by the school district for any purpose for which the school district's general funds may be used.
3. To the extent § 14-58-502 conflicts with this section, it is hereby superseded.
4. 1. When a city or county calls an election on the issue of a sales and use tax, it may designate on the ballot that a portion of the tax will be dedicated to a workforce development center authority under § 6-50-807.
  2. The Treasurer of State shall transmit to the treasurer or fiscal officer of each such workforce development center authority that workforce development center authority's share of the local sales and use taxes collected under this section at the same time as the city and county taxes are transmitted.
  3. Funds so transmitted may be used by the workforce development center authority for any purpose under the Workforce Development Center Authority Act, § 6-50-801 et seq.
1. Upon a request made in accordance with this section, the Department of Finance and Administration shall provide a report listing all businesses remitting sales and use taxes for the requesting governmental entity.
2. In order to obtain a report from the department, no more than quarterly, the chief executive officer of a county, city, or town may request a report from the department on the information noted in subsection (a) of this section.
3. The department shall provide the requested information within thirty (30) calendar days of the request.
1. Any municipal or county sales or use tax levied pursuant to the laws of this state shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
  1. Motor vehicle;
  2. Aircraft;
  3. Watercraft;
  4. Modular home;
  5. Manufactured home; and
  6. Mobile home.
2. This provision shall apply to all municipal and county sales and use taxes adopted before or after this section and shall be in addition to and not in lieu of any other limitations imposed by law.
1. This subchapter is intended to supplement all constitutional provisions and other acts adopted for the acquiring, constructing, and equipping of capital improvements of a public nature and the issuance of bonds for the financing of capital improvements of a public nature.
2. When applicable, in accordance with the provisions of this subchapter, this subchapter may be used by any county as an alternative, notwithstanding and without the necessity of compliance with any constitutional provision or any other act authorizing the county, or any commission or agency of the county, to issue bonds for the purpose of financing the acquisition, construction, and equipment of capital improvements of a public nature.
3. 1. This subchapter is intended to supplement and be levying authority in addition to all other statutes authorizing countywide sales and use taxes.
  2. Collections of a tax levied by this subchapter may be used to secure the payment of bonds or for any purpose for which the general fund of a municipality or county may be used, or a combination thereof, except as may be expressly limited by the ballot for the election at which the tax was approved or by the ballot for a subsequent election on the purposes for the tax.
1. Counties levying the tax permitted in this subchapter are authorized, in addition to the authority existing under the laws of the state, enacted, to acquire, construct, equip, reconstruct, extend, and improve capital improvements of a public nature, collectively referred to as a “project”, within or near such counties, and are authorized to issue bonds to provide funds for accomplishing projects and to pledge all or any part of the revenues which the county is entitled to receive from the tax levied by such county pursuant to this subchapter to pay lease rentals or the principal of, interest on, and fees and expenses in connection with such bonds.
2. Bonds issued by a county pursuant to this subchapter shall be authorized by ordinance of the quorum court. The bonds may:
  1. Be coupon bonds payable to bearer or may be registered as to principal or as to principal and interest;
  2. Be exchangeable for bonds of another denomination;
  3. Be in such form and denominations;
  4. Be made payable at such places within or without the state;
  5. Be issued in one (1) or more series;
  6. Bear such date or dates;
  7. Mature at such time or times, not exceeding forty (40) years from their respective dates;
  8. Bear interest at such rate or rates;
  9. Be payable in such medium of payment;
  10. Be subject to such terms of redemption; and
  11. Contain such other terms, covenants, and conditions as the ordinance authorizing their issuance may provide including, without limitation, those pertaining to:
    1. The custody, investment, and application of the proceeds of the bonds;
    2. The collection and disposition of revenues;
    3. The maintenance of various funds and reserves;
    4. The nature and extent of the security and pledging of revenues;
    5. The rights, duties, and obligations of the county and the trustee for the holders and registered owners of the bonds; and
    6. The rights of the holders and registered owners of the bonds.
3. There may be successive bond issues for the purpose of financing the same project, and there may be successive bond issues for financing the cost of reconstructing, replacing, constructing additions to, extending, improving, and equipping projects already in existence, whether or not originally financed by bonds issued under this subchapter, and with each successive issue to be authorized as provided by this subchapter. Priority between and among issues and successive issues as to security of the pledge of revenues and lien on the project facilities involved may be controlled by the ordinance authorizing the issuance of bonds under this subchapter. Subject to the provisions of this subchapter pertaining to registration, the bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas. A copy of the ordinance authorizing bonds under this subchapter, certified by the county clerk of the county, shall be filed with the Secretary of the Department of Finance and Administration and with the Treasurer of State.
4. The bonds shall be executed by the county judge of the county and attested by the county clerk of the county by their manual or facsimile signatures. Coupons attached to the bonds shall be executed by the facsimile signature of the county judge. In case any of the officers whose signatures appear on the bonds or coupons cease to be such officers before delivery of the bonds or coupons, their signatures shall nevertheless be valid and sufficient for all purposes. The bonds shall be sealed with the seal of the county issuing the bonds.
5. The bonds shall not be general obligations of the county involved but shall be special obligations secured and payable as provided in this subchapter. In no event shall the bonds constitute an indebtedness of the county within the meaning of any constitutional or statutory limitation. The principal of and interest on all bonds issued under the authority of this subchapter shall be secured by a pledge of and shall be payable from all or any part of the revenues derived by the county from the tax levied by the county pursuant to this subchapter or from all or any part of the revenues derived from the operation of the project involved, if and to the extent permitted by other laws of the State of Arkansas authorizing the issuance of revenue bonds secured by the revenues of such facilities. The ordinance authorizing the issuance of bonds together with this subchapter shall constitute a contract by and between the county and the holders and registered owners of the bonds issued by the county under the authority of this subchapter, which contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the contract and all rights of the holders and registered owners of the bonds and the obligations of the county may be enforced by mandamus or any other appropriate proceeding at law or in equity. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter.
6. The ordinance authorizing the bonds may provide for the execution by the county with a bank or trust company, within or without the State of Arkansas, of a trust indenture. The trust indenture may control the priority between and among successive issues and series and may contain any other terms, covenants, and conditions that are deemed desirable by the quorum court including, without limitation, those pertaining to:
  1. The custody, investment, and application of the proceeds of bonds;
  2. The collection and disposition of revenues;
  3. The maintenance of various funds and reserves;
  4. The nature and extent of the security;
  5. The rights, duties, and obligations of the county and the trustee for the holders and registered owners of the bonds; and
  6. The rights of the holders and registered owners of the bonds.
7. Bonds issued under the authority of this subchapter may be sold at public or private sale. If sold at public sale, the bonds shall be sold on sealed bids, and notice of the sale shall be published one (1) time in a newspaper having a general circulation throughout the State of Arkansas, at least ten (10) days prior to the date of the sale. In either case, the bonds may be sold at such price as the county may accept, including sale at a discount.
8. Bonds issued under the authority of this subchapter are made securities in which insurance companies, trust companies, banks, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is authorized by law. Any municipality or county or any board, commission, or other authority established by any such municipality or county or the boards of trustees, respectively, of any retirement fund or retirement system created by or pursuant to authority conferred by the General Assembly in its discretion may invest any of its funds not immediately needed for its purposes in bonds issued under the authority of this subchapter, and bonds issued under the authority of this subchapter shall be eligible to secure the deposit of public funds.
9. The principal of and interest on bonds issued under the authority of this subchapter shall be exempt from all state, county, school district, community college district, and municipal taxes. This exemption shall include income, property, inheritance, and estate taxes.
10. Revenue bonds may be issued under this subchapter for the purpose of refunding any obligations issued under this subchapter or under the authority of any other law for the purpose of providing all or part of the funds for the construction, reconstruction, extension, equipment, acquisition, or improvement of any capital improvements of a public nature. These refunding bonds may be combined with bonds issued under the provisions of this section into a single issue. When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be either applied to the payment of the obligations refunded or deposited in escrow for the retirement thereof. The ordinance under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby. These refunding bonds shall be issued and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of these bonds.
1. 1. A county quorum court may call an election for the levy of a countywide sales and use tax in the amount of:
    1. One-eighth of one percent (0.125%);
    2. One-fourth of one percent (0.25%);
    3. One-half of one percent (0.50%);
    4. Three-fourths of one percent (0.75%);
    5. One percent (1%); or
    6. Any combination of these amounts.
  2. The election shall be held within one hundred twenty (120) days of the ordinance calling the election.
  3. Each tax shall be adopted by ordinance and with approval of the voters of the county in accordance with this subchapter.
2. 1. If a petition is filed requesting an election on the question of the levy of the tax authorized under this subchapter, the quorum court shall submit the question of the levying of the tax to the electors.
  2. The petition must be signed by a number of the legal voters in the county that shall be no less than fifteen percent (15%) of the number of votes cast for the office of circuit clerk at the last preceding general election.
  3. The election shall be held within one hundred twenty (120) days of the filing of the petition.
3. The county quorum court shall notify its county board of election commissioners that the measure has been referred to the vote of the people and shall submit a copy of the ballot title to the county board of election commissioners.
1. The ballot title to be used shall be substantially in the following form:
2. 1. The ballot title may also include an expiration date for the levy of the tax, and if adopted in this form, the tax shall cease to be levied on the date noted on the ballot.
  2. The expiration date shall be the last day of a calendar quarter unless the tax proceeds are pledged for the payment of bonds, in which case the tax shall terminate as otherwise provided by law.
  3. 1. 1. The quorum court of a county may refer to the voters of the county a change in the expiration date for the sales and use tax approved by the voters to extend the levy of the sales and use tax beyond the expiration date previously approved.
      2. The proposed expiration date shall be the last day of the last month of a calendar quarter.
    2. If the quorum court of a county refers a change in the expiration date for an existing sales and use tax levied under this subchapter to the voters, the quorum court shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the expiration date for a sales or use tax levied under this subchapter shall be conducted in the manner provided by law for all other county elections.
      2. The results of the election under this subsection shall be certified, proclaimed, and subject to challenge under § 26-74-209.
    4. 1. To extend the sales and use tax levied under this subchapter to a new expiration date, the county shall notify the Secretary of the Department of Finance and Administration of the new expiration date that was approved by the voters after publication of the proclamation has occurred and at least ninety (90) days before the current expiration date of the sales and use tax.
      2. The sales and use tax extended under this subdivision (b)(3) shall continue to be levied until the new expiration date.
    5. If the voters do not approve a change in the expiration date for the sales and use tax levied under this subchapter, the:
      1. Tax shall continue to be collected until the expiration date previously approved by the voters; and
      2. Question may be resubmitted to the voters at the time permitted by the election laws and § 26-74-210(a)(1) shall not apply.
    6. An election to change the expiration date for a sales or use tax levied under this subchapter is not an election on the levy of the tax.
3. 1. 1. The ballot may also indicate designated uses of the revenues derived from the sales and use tax or the allocation or distribution of revenues, or both, and if the tax is approved, the proceeds shall only be used for the designated purposes and distributed in the manner set forth in the ballot.
    2. The county's share of the proceeds may be used for other designated purposes if the electors approve a change in the designated use of the revenues by vote under this subsection.
  2. 1. The quorum court of a county may refer to the vote of the people a change in the indicated use of revenues derived from a sales and use tax levied by the county that was approved by the voters, but a change shall not alter the allocation of tax collections among the county and municipalities within the county.
    2. If the quorum court of a county refers to the vote of the people a change in the indicated use of revenues derived from a sales and use tax, the quorum court shall:
      1. Notify the county board of election commissioners that the measure has been referred to the vote of the people; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the indicated use of revenues derived from a sales and use tax shall be conducted in the manner provided by law for all other county elections.
      2. The results of an election under this subsection shall be certified, proclaimed, and subject to challenge under the procedures stated in § 26-74-209.
  3. If the voters approve a change in the indicated use of revenues derived from a sales and use tax, the change in the indicated use shall apply to all revenues collected on the first day of the calendar month following the expiration of the thirty-day challenge period under § 26-74-209.
  4. 1. If the voters do not approve a change in the indicated use of revenues derived from a sales and use tax, the tax shall continue to be collected and the revenues derived from the tax shall continue to be used for the purposes indicated in the ballot for the tax.
    2. An election to change the indicated use of revenues derived from a sales and use tax shall not constitute an election on the levy of the tax.
  5. Notwithstanding anything in this subchapter to the contrary, in any county that a local sales and use tax has been adopted in the manner provided for in this subchapter and a portion of the revenues derived from the tax has been pledged to secure lease rentals or bonds, the purpose for the tax may not be changed to reduce the pledge in favor of the lease or bonds.
4. 1. The ballot may indicate an effective date for the levy of the tax that is effective later than the effective date provided in § 26-74-209(d)(2)(A)(i).
  2. The effective date of a levy of the tax that is delayed under subdivision (d)(1) of this section shall be:
    1. Stated in the ordinance levying the tax and on the ballot; and
    2. Scheduled on the first day of the first month of a calendar quarter.
  3. The effective date of a levy of the tax that is delayed under subdivision (d)(1) of this section shall not be delayed for more than thirty-six (36) months after the date the tax would be effective under § 26-74-209(d)(2)(A)(i).
5. 1. Any tax adopted for a specified period of time shall cease to be levied on the date indicated on the ballot.
  2. This section shall be effective retroactive to December 1, 1981, and if a majority of the qualified electors of any county in this state voting on the question at an election held subsequent to this date have voted to adopt a sales tax levy for a specific duration of time as stated on the ballot, the authority to levy the sales tax shall cease on the date specified on the ballot for termination of the sales tax the same as if the question had been voted upon under the provisions of this subchapter, which are made retroactive to December 1, 1981.
1. The election shall be conducted in the manner provided by law for all other county elections unless otherwise specified in this subchapter.
2. When the election results have been certified, the county court shall immediately issue a proclamation declaring the results of the election and cause the proclamation to be published one (1) time in a newspaper having general circulation within the county.
3. Any person desiring to challenge the results of the election as published in the proclamation shall file the challenge in the circuit court of the county within thirty (30) days after the date of publication of the proclamation.
4. 1. The county court shall notify the Secretary of the Department of Finance and Administration of the countywide tax after publication of the proclamation has occurred and ninety (90) days before the effective date of the tax.
  2. 1. 1. Except as provided in subdivision (d)(2)(A)(ii) of this section, if an election challenge is not timely filed, the countywide tax shall be levied, effective on the first day of the first month of the calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers and after the expiration of the thirty-day challenge period, on the gross receipts from the sale at retail within the county of all items and services that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
      2. The effective date of the levy of the countywide tax may be delayed under § 26-74-208(d).
    2. In every county where the local sales and use tax has been adopted under this subchapter, there is imposed an excise tax on the storage, use, distribution, or consumption within the county of tangible personal property or services purchased, leased, or rented from any retailer outside the state after the effective date of the sales and use tax for storage, use, distribution, or other consumption in the county at the same rate on the sale price of the property or in the case of leases or rentals on the lease or rental price, the rate of the use tax to correspond to the rate of the sales tax portion of the tax.
  3. The use tax portion of the local sales and use tax shall be collected according to the terms of the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
5. 1. In the event of an election challenge, the tax shall be collected as prescribed in subsection (d) of this section unless enjoined by a court order.
  2. A hearing involving this litigation shall be advanced on the docket of the court and disposed of at the earliest feasible time.
1. 1. When the question of the levy or repeal of a county sales and use tax is submitted to the electors and the proposition is approved or defeated, the question shall not again be submitted to the electors by ordinance of the quorum court of the county or by petition of electors at a special or general election for a period of six (6) months from the date the proposition was last voted upon.
  2. 1. A petition requesting that the issue be submitted to the electors of the county shall contain the signatures of at least fifteen percent (15%) of the electors of the county as determined by the total number of votes cast for all candidates for circuit clerk of the county at the last preceding general election.
    2. 1. The petition shall be filed and verified by the county clerk.
      2. If the petition is found to be sufficient, the issue shall be submitted to the electors at a special election on a date as may be requested by the petition.
    3. The special election shall be called in accordance with § 7-11-201 et seq. for a date not more than ninety (90) days from the date on which the county clerk certifies the sufficiency of the petition to the county board of election commissioners.
2. 1. The ballot title for use in an election on the question of abolishing the county sales and use tax shall be the same as indicated in § 26-74-208, except that the word “ABOLISH” shall be substituted for the word “ADOPTION”.
  2. The effective date of any affirmative vote to abolish the tax shall correspond to the dates indicated in this subchapter for the initial effective date of the tax.
3. Notwithstanding anything in this subchapter to the contrary, in any county in which a local sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure lease rentals or the payment of bonds as authorized by this subchapter, that portion of the tax pledged to lease rentals or bonds shall not be repealed, abolished, or reduced so long as the lease is effective or any of such bonds are outstanding.
1. Within ten (10) days after the certification of the votes of any election resulting in the adoption or abolition of a tax levied pursuant to this subchapter and ninety (90) days before its effective date, the county court shall notify the Secretary of the Department of Finance and Administration of the results.
2. A rate change will be effective only on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers.
3. A rate change on a purchase from a printed catalog in which the purchaser computed the tax based upon local tax rates published in the catalog will be applicable on the first day of a calendar quarter after a minimum of one hundred twenty (120) days' notice by the secretary to the sellers.
4. For sales and use tax purposes only, a local boundary change will become effective on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers.
1. A county sales tax levied under this subchapter or in § 26-74-301 et seq. shall be applicable to sales of items and services sold by a business, and the tax shall be administered under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. When a direct pay permit holder purchases tangible personal property or taxable services either from an Arkansas or out-of-state vendor for use, storage, consumption, or distribution in Arkansas, the permit holder shall accrue and remit the county sales or use tax, if any, pursuant to the sourcing rules in §§ 26-52-521 and 26-52-522.
1. A county shall provide in its ordinance authorized by this subchapter a rebate from the county for taxes collected pursuant to this subchapter in excess of the tax on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
  1. Motor vehicle;
  2. Aircraft;
  3. Watercraft;
  4. Modular home;
  5. Manufactured home; or
  6. Mobile home.
2. 1. If a rebate would be due pursuant to the provisions of this subchapter as a result of the purchase of a new or used motor vehicle and if the tax on the new or used motor vehicle is collected directly from the purchaser pursuant to the provisions of § 26-52-510, then the Secretary of the Department of Finance and Administration shall collect only the amount of tax due less the amount to which the purchaser would be entitled under the rebate provisions of this subchapter.
  2. If the rebate is credited against tax paid as set out in this subsection, then no other rebate of the tax shall be given.
3. In a county that has adopted a county sales tax pursuant to § 26-74-301 et seq. before December 1, 1981, the county quorum court may by ordinance provide for a rebate of any county sales and use taxes collected in excess of a specified amount on the sale of a:
  1. Motor vehicle;
  2. Aircraft;
  3. Watercraft;
  4. Modular home;
  5. Manufactured home; or
  6. Mobile home.
1. 1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this subchapter and other subchapters authorizing county sales and use taxes in each county and shall deposit all such revenues with the Treasurer of State.
  2. 1. Upon receipt of the funds, the Treasurer of State shall deduct three percent (3%) of the funds as a charge by the state for its services as specified in this subchapter and all other subchapters authorizing county sales and use taxes and shall credit the three percent (3%) to the Constitutional Officers Fund and the State Central Services Fund.
    2. In addition, the Treasurer of State may retain in the Local Sales and Use Tax Trust Fund an amount not to exceed five percent (5%) of the total amount received from the tax levied by each county, to be used by the Treasurer of State to:
      1. Make remittances to the county for rebates made by the county for taxes in excess of amounts specified by the particular county ordinances paid by a taxpayer on a single transaction;
      2. Make refunds for overpayment of the taxes; and
      3. Redeem dishonored checks and drafts received and deposited into the Local Sales and Use Tax Trust Fund.
2. 1. Except as set forth in subsections (f)-(h) of this section, all funds received by the Treasurer of State from the sales tax levied by each county after deducting the three percent (3%) for the Constitutional Officers Fund and the State Central Services Fund shall be deposited into the Local Sales and Use Tax Trust Fund and shall be credited to the account of the county in which it was collected.
  2. 1. 1. The Treasurer of State shall monthly transmit to the county treasurer and to the city treasurer of each municipality located in a county levying the tax authorized in this subchapter and all other subchapters authorizing county sales and use taxes their per capita share, if any, of the moneys received by the Treasurer of State from all of the sales taxes levied by the county and credited to the account of the county in the Local Sales and Use Tax Trust Fund.
      2. The county treasurer of any county that has levied a sales tax pursuant to this subchapter and that rebates taxes paid on a single transaction in excess of a specified amount shall monthly certify to the Treasurer of State the total amount of rebates paid since the preceding certification, and the Treasurer of State shall remit that amount to the county treasurer from the Local Sales and Use Tax Trust Fund.
    2. 1. If the ballot is silent on the method of distribution, it shall be per capita among the county and each municipality located within the county unless an interlocal agreement is executed between the affected county and its municipalities indicating a different distribution.
      2. If an interlocal agreement is used, a copy of the interlocal agreement shall be furnished to the Treasurer of State and the distribution of the tax shall be as agreed upon in the interlocal agreement.
      3. The ballot shall specify the method of distribution contained in the interlocal agreement if any method of distribution other than a per capita share is to be used.
      4. A copy of the ballot shall be furnished to the Treasurer of State.
3. 1. Funds received by the counties and municipalities pursuant to the provisions of this subchapter may be used by the counties and municipalities for any purpose for which the county general funds or the city general funds may be used, subject to designations set forth in the ballot, if any.
  2. 1. The ballot for the tax may provide for distribution to a public entity in the county other than a municipality or a county.
    2. In the case of allocations other than to a county or municipality, the Treasurer of State shall transmit funds to the county treasurer, and the county treasurer shall promptly transmit the funds to the designated public entity.
  3. If the funds received are as a result of a ballot dedicating all or a portion of a tax to a technical college, community college, two-year college, or satellite campus of a community college for capital improvements or for maintenance and operation, the Treasurer of State shall transmit tax funds for the college to the county treasurer, and the county treasurer shall promptly transmit the funds to the college for which the tax was approved.
4. The Treasurer of State may make refunds for overpayment of the county sales tax and redeem dishonored checks and drafts issued in payment of the county sales tax from the Local Sales and Use Tax Trust Fund.
5. 1. When any tax adopted by a county pursuant to this subchapter is abolished, the secretary shall retain in the account of that county in the Local Sales and Use Tax Trust Fund for a period of one (1) year an amount equal to five percent (5%) of the final remittance to the county and municipalities in the county at the time of termination of the collection of the tax to:
    1. Cover possible rebates by the county;
    2. Cover refunds for overpayment of taxes; and
    3. Redeem dishonored checks and drafts deposited to the credit of the Local Sales and Use Tax Trust Fund.
  2. After one (1) year has elapsed after the effective date of the abolition of the tax in any county, the secretary shall transfer the balance in that county's account to the county and municipalities in the county and shall close the account.
6. 1. As indicated by a certified copy of an ordinance of the quorum court of the county previously filed with the secretary and the Treasurer of State, any moneys collected that are pledged to secure lease rentals or the payment of bonds authorized by this subchapter shall not be deposited into the State Treasury but shall be deposited by the Treasurer of State into a bank or banks designated by the county, as cash funds, and transmitted to the county subject to the charges payable and retainage authorized in this section.
  2. Charges deducted shall be transmitted to the Treasurer of State, and amounts retained shall be retained by the secretary as cash funds.
7. 1. Except for revenue collected under subdivision (g)(2) of this section, money collected that is derived from a tax on aviation fuel levied by a county where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport located within the levying county and transmitted to the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this section.
8. Money collected that is derived from a tax on aviation fuel levied by a county that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the county and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any local tax imposed pursuant to this subchapter shall be the same as for the state gross receipts tax and compensating tax, as set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any city or county under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from such sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the city or county.
1. Subject to the provisions of subsection (b) of this section, if the General Assembly shall levy an additional statewide gross receipts tax of one percent (1%) or more, the quorum court of any county which has levied a sales tax or a sales and use tax pursuant to the authority granted in this subchapter or under the provisions of § 26-74-301 et seq., may repeal that county sales tax or county sales and use tax by ordinance approved by the quorum court.
2. In any county in which a local sales tax or sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure the payment of lease rentals or bonds as authorized by this subchapter, that portion of the tax pledged to lease rentals or bonds shall not be repealed, abolished, or reduced so long as the lease is effective or any of the bonds are outstanding.
1. 1. Any county general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
2. 1. Each vendor who is liable for one (1) or more county sales or use taxes shall report a combined county sales tax and a combined county use tax on his or her sales and use tax report.
  2. The combined county sales tax is equal to the sum of all sales taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
  3. The combined county use tax is equal to the sum of all use taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
3. This section applies only to a tax collected by the Secretary of the Department of Finance and Administration.
1. 1. There is created a trust fund for the remittance of local sales and use taxes which shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes which was collected in local taxing jurisdictions which are not immediately identifiable and money collected in local jurisdictions which have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money which has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
    3. 1. Money reported as local sales and use taxes, which was collected by an out-of-state vendor and which is not identifiable, shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes. Any such funds so deposited shall not be included for computation of transfer to general revenue in subdivision (a)(2)(B) of this section.
      2. The Treasurer of State shall distribute unidentified local sales and use taxes collected by out-of-state vendors to the county treasurers and city treasurers as determined by their proportionate share of distribution from the Local Sales and Use Tax Trust Fund on a monthly basis.
2. 1. The Treasurer of State as the administrator of the Local Sales and Use Tax Trust Fund shall review the flow of moneys through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. After making the estimate, the administrator shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall monthly transmit to the county treasurers and city treasurers their proportionate share of the interest derived from investment of the Local Sales and Use Tax Trust Fund.
1. In any county having previously adopted a one percent (1%) countywide sales tax pursuant to this subchapter or § 26-74-301 et seq., which has not adopted a one percent (1%) countywide compensating use tax, the one percent (1%) countywide sales tax is levied and recognized to be in full force and effect as of the date of its adoption and previous levy by the county.
2. The collection and distribution of funds collected pursuant to this section shall be pursuant to this subchapter or § 26-74-301 et seq., and the procedures thereunder.
1. In all counties which adopt a local sales tax under the provisions of this subchapter or § 26-74-301 et seq., or which prior to September 4, 1987, have adopted a local sales tax under the provisions of this subchapter or § 26-74-301 et seq., there is also levied a local compensating use tax. The rate of use tax levied by this section shall be the same as that of the sales tax in the county.
2. No additional tax shall be levied by this section when a use tax is otherwise levied under the provisions of §§ 26-74-201 — 26-74-219, 26-74-221, 26-74-315 — 26-74-317, 26-75-223, and 26-75-318.
3. Any tax levied under the provisions of this section shall be levied, collected, and administered in accordance with the provisions of §§ 26-74-201 — 26-74-219, 26-74-221, 26-74-315 — 26-74-317, 26-75-223, and 26-75-318.
1. This subchapter is intended to supplement all constitutional provisions and other acts adopted for the acquiring, constructing, and equipping of capital improvements of a public nature and the issuance of bonds for the financing of a capital improvement of a public nature.
2. When applicable in accordance with the provisions of this subchapter, this subchapter may be used by any county as an alternative notwithstanding and without the necessity of compliance with any constitutional provision or any other act authorizing the county, or any commission or agency of the county, to issue bonds for the purpose of financing the acquisition, construction, and equipment of capital improvements of a public nature.
3. 1. This subchapter is intended to supplement and be levying authority in addition to all other statutes authorizing countywide sales and use taxes.
  2. Collections of a tax levied by this subchapter may be used to secure the payment of bonds or for any purpose for which the general fund of a municipality or county may be used, or a combination thereof, except as may be expressly limited by the ballot for the election at which the tax was approved or by the ballot for a subsequent election on the purposes for the tax.
1. Counties levying the tax permitted in this subchapter are authorized, in addition to the authority existing under the laws of this state, to acquire, construct, equip, reconstruct, extend, and improve capital improvements of a public nature, collectively referred to as a “project”, within or near such counties and are authorized to issue bonds to provide funds for accomplishing projects and to pledge all or any part of the revenues which the county is entitled to receive from the tax levied by such county pursuant to this subchapter to pay lease rentals, or principal of, interest on, and fees and expenses in connection with such bonds.
2. Bonds issued by a county pursuant to this subchapter shall be authorized by ordinance of the quorum court of the county. The bonds may:
  1. Be coupon bonds payable to bearer or may be registered as to principal or as to principal and interest;
  2. Be exchangeable for bonds of another denomination;
  3. Be in such form and denominations;
  4. Be made payable at such places within or without the state;
  5. Be issued in one (1) or more series;
  6. Bear such date or dates;
  7. Mature at such time or times, not exceeding forty (40) years from their respective dates;
  8. Bear interest at such rate or rates;
  9. Be payable in such medium of payment;
  10. Be subject to such terms of redemption; and
  11. Contain such terms, covenants, and conditions as the ordinance authorizing their issuance may provide including, without limitation, those pertaining to:
    1. The custody, investment, and application of the proceeds of the bonds;
    2. The collection and disposition of revenues;
    3. The maintenance of various funds and reserves;
    4. The nature and extent of the security and pledging of revenues;
    5. The rights, duties, and obligations of the county and the trustee for the holders and registered owners of the bonds; and
    6. The rights of the holders and registered owners of the bonds.
3. There may be successive bond issues for the purpose of financing the same project, and there may be successive bond issues for financing the cost of reconstructing, replacing, constructing additions to, extending, improving, and equipping projects already in existence, whether or not originally financed by bonds issued under this subchapter, and with each successive issue to be authorized as provided by this subchapter. Priority between and among issues and successive issues as to security of the pledge of revenues and lien on the project facilities involved may be controlled by the ordinance authorizing the issuance of bonds under this subchapter. Subject to the provisions of this subchapter pertaining to registration, the bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas. A copy of the ordinance authorizing bonds under this subchapter, certified by the county clerk of the county, shall be filed with the Secretary of the Department of Finance and Administration and with the Treasurer of State.
4. The bonds shall be executed by the county judge of the county and attested by the county clerk of the county, by their manual or facsimile signatures. Coupons attached to the bonds shall be executed by the facsimile signature of the county judge. In case any of the officers whose signatures appear on the bonds or coupons cease to be such officers before delivery of the bonds or coupons, their signatures shall nevertheless be valid and sufficient for all purposes. The bonds shall be sealed with the seal of the county issuing the bonds.
5. The bonds shall not be general obligations of the county involved but shall be special obligations secured and payable as provided in this subchapter. In no event shall the bonds constitute an indebtedness of the county within the meaning of any constitutional or statutory limitation. The principal of and interest on all bonds issued under the authority of this subchapter shall be secured by a pledge of, and shall be payable from, all or any part of the revenues derived from the tax levied by the county, and to which the county is entitled, pursuant to this subchapter or from all or any part of the revenues derived from the operation of the project involved, if and to the extent permitted by other laws of the State of Arkansas authorizing the issuance of revenue bonds secured by the revenues of such facilities. The ordinance authorizing the issuance of bonds together with this subchapter shall constitute a contract by and between the county and the holders and registered owners of the bonds issued by the county under the authority of this subchapter, which contract, and all covenants, agreements, and obligations therein, shall be promptly performed in strict compliance with the terms and provisions of the contract, and the contract and all rights of the holders and registered owners of the bonds and the obligations of the county may be enforced by mandamus or by any other appropriate proceeding at law or in equity. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter.
6. The ordinance authorizing the bonds may provide for the execution by the county with a bank or trust company, within or without the State of Arkansas, of a trust indenture. The trust indenture may control the priority between and among successive issues and series, and may contain any other terms, covenants, and conditions that are deemed desirable by the governing body, including, without limitation, those pertaining to:
  1. The custody, investment, and application of the proceeds of bonds;
  2. The collection and disposition of revenues;
  3. The maintenance of various funds and reserves;
  4. The nature and extent of the security;
  5. The rights, duties, and obligations of the county and the trustee for the holders and registered owners of the bonds; and
  6. The rights of the holders and registered owners of the bonds.
7. Bonds issued under the authority of this subchapter may be sold at public or private sale. If sold at public sale, the bonds shall be sold on sealed bids, and notice of the sale shall be published one (1) time in a newspaper having a general circulation throughout the State of Arkansas, at least ten (10) days prior to the date of the sale. In either case, the bonds may be sold at such price as the county may accept, including sale at a discount.
8. Bonds issued under the authority of this subchapter are made securities in which insurance companies, trust companies, banks, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them. Such bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is authorized by law. Any municipality or county, or any board, commission, or other authority established by any such municipality or county, or the boards of trustees, respectively, of any retirement fund or retirement system created by or pursuant to authority conferred by the General Assembly in its discretion may invest any of its funds not immediately needed for its purposes in bonds issued under the authority of this subchapter, and bonds issued under the authority of this subchapter shall be eligible to secure the deposit of public funds.
9. The principal of and interest on bonds issued under the authority of this subchapter shall be exempt from all state, county, school district, community college district, and municipal taxes. This exemption shall include income, property, inheritance, and estate taxes.
10. Revenue bonds may be issued under this subchapter for the purpose of refunding any obligations issued under this subchapter or under the authority of any other law for the purpose of providing all or part of the funds for the construction, reconstruction, extension, equipment, acquisition, or improvement of any capital improvements of a public nature. These refunding bonds may be combined with bonds issued under the provisions of this section into a single issue. When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be either applied to the payment of the obligations refunded or deposited in escrow for the retirement thereof. The ordinance under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby. These refunding bonds shall be issued and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of these bonds.
1. 1. A county quorum court may call an election for the levy of a countywide sales tax in an amount of:
    1. One-eighth of one percent (0.125%);
    2. One-fourth of one percent (0.25%);
    3. One-half of one percent (0.5%);
    4. Three-fourths of one percent (0.75%);
    5. One percent (1%); or
    6. Any combination of these amounts.
  2. The election shall be held within one hundred twenty (120) days of the ordinance calling for the election.
  3. Each tax shall be adopted by ordinance and with approval of the voters of the county in accordance with this subchapter.
2. The quorum court shall notify its county board of election commissioners that the measure has been referred to the vote of the people and shall submit a copy of the ballot title to its county board of election commissioners.
1. The ballot title to be used shall be substantially in the following form:
2. 1. The ballot title may also include an expiration date, and if adopted in this form, the tax shall cease to be levied on the date noted on the ballot.
  2. The expiration date shall be the last day of a calendar quarter unless the proceeds are pledged for the payment of bonds, in which case the tax shall terminate as otherwise provided by law.
  3. 1. 1. The quorum court of a county may refer to the voters of the county a change in the expiration date for the sales and use tax approved by the voters to extend the levy of the sales and use tax beyond the expiration date previously approved.
      2. The proposed expiration date shall be the last day of the last month of a calendar quarter.
    2. If the quorum court of a county refers a change in the expiration date for an existing sales and use tax levied under this subchapter to the voters, the quorum court shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the expiration date for a sales or use tax levied under this subchapter shall be conducted in the manner provided by law for all other county elections.
      2. The results of the election under this subsection shall be certified, proclaimed, and subject to challenge under § 26-74-309.
    4. 1. To extend the sales and use tax levied under this subchapter to a new expiration date, the county shall notify the Secretary of the Department of Finance and Administration of the new expiration date that was approved by the voters after publication of the proclamation has occurred and at least ninety (90) days before the current expiration date of the sales and use tax.
      2. The sales and use tax extended under this subdivision (b)(3) shall continue to be levied until the new expiration date.
    5. If the voters do not approve a change in the expiration date for the sales and use tax levied under this subchapter, the tax shall continue to be collected until the expiration date previously approved by the voters.
    6. An election to change the expiration date for a sales or use tax levied under this subchapter is not an election on the levy of the tax.
3. 1. 1. The ballot may also indicate designated uses of the revenues derived from the sales and use tax, and if the tax is approved, the proceeds shall be used only for the designated purposes.
    2. The county's share of the proceeds may be used for other designated purposes if the electors approve a change in the designated use of the revenues by vote under this subsection.
  2. 1. The quorum court of a county may refer to the vote of the people a change in the indicated use of revenues derived from a sales and use tax levied by the county that was approved by the voters, but a change shall not alter the allocation of tax collections among the county and municipalities within the county.
    2. If the quorum court of a county refers to the vote of the people a change in the indicated use of revenues derived from a sales and use tax, then the quorum court shall:
      1. Notify the county board of election commissioners that the measure has been referred to the vote of the people; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the indicated use of revenues derived from a sales and use tax shall be conducted in the manner provided by law for all other county elections.
      2. The results of an election under this subsection shall be certified, proclaimed, and subject to challenge under the procedures stated in § 26-74-309.
  3. If the voters approve a change in the indicated use of revenues derived from a sales and use tax, the change in the indicated use shall apply to all revenues collected on the first day of the calendar month following the expiration of the thirty-day challenge period under § 26-74-309.
  4. 1. If the voters do not approve a change in the indicated use of revenues derived from a sales and use tax, the tax shall continue to be collected and the revenues derived from the tax shall continue to be used for the purposes indicated in the ballot for the tax.
    2. An election to change the indicated use of revenues derived from a sales and use tax shall not constitute an election on the levy of the tax.
  5. Notwithstanding anything in this subchapter to the contrary, in any county that a local sales and use tax has been adopted in the manner provided for in this subchapter and a portion of the revenues derived from the tax has been pledged to secure lease rentals or bonds, the purpose for the tax may not be changed to reduce the pledge in favor of the lease or bonds.
4. 1. The ballot may indicate an effective date for the levy of tax that is effective later than the effective date provided in § 26-74-309(d)(2)(A).
  2. The effective date of a levy of the tax that is delayed under subdivision (d)(1) of this section shall be:
    1. Stated in the ordinance levying the tax and on the ballot; and
    2. On the first day of the first month of a calendar quarter.
  3. The effective date of a levy of the tax that is delayed under subdivision (d)(1) of this section shall not be delayed for more than thirty-six (36) months after the date the tax would be effective under § 26-74-309(d)(2)(A).
1. The election shall be conducted in the manner provided by law for all other county elections unless otherwise specified in this subchapter.
2. When the election results have been certified, the county court shall immediately issue a proclamation declaring the results of the election and cause the proclamation to be published one (1) time in a newspaper having general circulation within the county.
3. Any person desiring to challenge the results of the election as published in the proclamation shall file the challenge in the circuit court of the county within thirty (30) days after the date of publication of the proclamation.
4. 1. The county court shall notify the Secretary of the Department of Finance and Administration of the countywide tax after publication of the proclamation has occured and ninety (90) days before the effective date of the tax.
  2. 1. Except as provided in subdivision (d)(2)(B) of this section, if an election challenge is not timely filed, the countywide tax shall be levied, effective on the first day of the first month of the calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers and after the expiration of the thirty-day challenge period, on the gross receipts from the sale at retail within the county of all items and services that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
    2. The effective date of the levy of the countywide tax may be delayed under § 26-74-308(d).
5. 1. In the event of an election challenge, the tax shall be collected as prescribed in subsection (d) of this section unless enjoined by a court order.
  2. A hearing involving this litigation shall be advanced on the docket of the court and disposed of at the earliest practicable time.
1. In any county in which a local sales tax has been levied pursuant to this subchapter, and all or any portion pledged to secure lease rentals or the payment of bonds as authorized by this subchapter, that portion of the tax pledged to lease rentals or bonds shall not be abolished so long as any of the lease is effective or such bonds are outstanding.
2. 1. The county may abolish all or that portion of the sales tax that is not pledged to lease rentals or outstanding bonds after, and only after, an election called in the same manner as provided in § 26-74-307 or by a petition of the qualified voters of the county.
  2. As to such a petition of the qualified voters, the provisions of Arkansas Constitution, Amendment 7 shall govern.
  3. The ballot title for use in any such election shall be the same as indicated in § 26-74-308, except that the word “ABOLITION” shall be substituted for the word “ADOPTION” as it appears in the ballot title set forth in that section.
  4. The effective date of any affirmative vote to abolish such tax shall correspond to the dates indicated in § 26-74-309 for the initial effective date of such tax.
1. Within ten (10) days after the certification of the votes of any election resulting in the adoption or abolition of a tax levied pursuant to this subchapter and ninety (90) days before the effective date, the county court shall notify the Secretary of the Department of Finance and Administration of the results.
2. A rate change will become effective only on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers.
3. A rate change on a purchase from a printed catalog in which the purchaser computed the tax based upon local tax rates published in the catalog will be applicable beginning on the first day of a calendar quarter after a minimum of one hundred twenty (120) days' notice by the secretary to the sellers.
4. For sales and use tax purposes only, a local boundary change will become effective only on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to the sellers.
1. On and after the effective date of any tax imposed under the provisions of this subchapter, the Secretary of the Department of Finance and Administration shall perform all functions incidental to the administration, collection, enforcement, and operation of the tax.
2. In addition to the state gross receipts tax, the secretary shall collect an additional tax under the authority of this subchapter on the gross receipts from the sale of all items and services that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
3. 1. The tax imposed under this subchapter and the tax imposed under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., shall be collected together and reported upon such forms and under such administrative rules as may be prescribed by the secretary not inconsistent with the provisions of this subchapter.
  2. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on his or her sales and use tax report.
    2. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
    3. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. This subsection only applies to a tax collected by the secretary.
4. On and after the effective date of any proposition to abolish a tax levied pursuant to this subchapter, the secretary shall comply with the proposition as provided in this subchapter.
1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this subchapter and other subchapters authorizing county sales and use taxes in each county. The secretary shall determine the population of the unincorporated area of each of the counties and shall furnish the information to the Treasurer of State.
2. Except as set forth in subsections (c), (e), and (f) of this section, any tax collected by the secretary under this subchapter on behalf of any county shall be deposited with the Treasurer of State in trust and shall be kept in a separate suspense account.
3. Any moneys collected by the secretary, as indicated by a certified copy of an ordinance of the quorum court of the county, previously filed with the secretary and the Treasurer of State, which are pledged to secure the payment of lease rentals or bonds authorized by this subchapter shall not be deposited into the State Treasury but shall be deposited by the Treasurer of State into banks designated by the county, as cash funds, and transmitted to the county subject to the charges payable to the State of Arkansas set forth in subsection (d) of this section. Charges deducted shall be transmitted to the Treasurer of State.
4. 1. The Treasurer of State shall transmit to the treasurer or financial officer of each city and county its per capita share, after deducting the amount required for claims, overpayments, and bad checks, as certified by the secretary.
  2. 1. Except as is otherwise provided in subdivision (d)(8) of this section, the last official federal decennial census or later special census that included the county as a whole shall be used in computing the per capita share that each city and county shall receive from the proceeds of the tax. Every county that is petitioned by, and city or town located in that county for, a countywide special census to be conducted shall request a countywide special census on the condition that the city or town requesting the census post adequate bond with the county clerk to cover the cost of the census. Further, the cost of conducting the census shall be borne by the several taxing units within the county in the same proportion that they will receive an increase in the distribution of a countywide sales tax as a result of the special census.
    2. However, in the case of those counties in which an official census has been conducted in a municipality therein since the last federal decennial census and before April 7, 1987, the proceeds from the countywide sales tax shall continue to be distributed in the manner and under the same formula as was used for the distribution of funds prior to April 7, 1987, until such time as a countywide census is conducted in that county.
  3. Transmittals shall be made at least quarterly in each fiscal year. Funds so transmitted may be used by the cities and counties for any purpose for which the city's general funds or county's general funds may be used. Before transmitting these funds, the Treasurer of State shall deduct three percent (3%) of the sum collected as a charge by the state for its services specified in this subchapter, and the amount so deducted shall be deposited by the Treasurer of State to the credit of the Constitutional Officers Fund and the State Central Services Fund or to any successor State Treasury fund or funds established by law to replace the Constitutional Officers Fund and the State Central Services Fund.
  4. The secretary is authorized to retain in the suspense account a balance not to exceed five percent (5%) of the amount remitted to the local governments. The secretary is authorized to make refunds from the suspense account of any overpayments made and to redeem dishonored checks and drafts deposited to the credit of the suspense account.
  5. When any tax adopted pursuant to this subchapter is thereafter abolished, the secretary shall retain in the suspense account for a period of one (1) year five percent (5%) of the final remittance to the local governments at the time of termination of collection of the tax to:
    1. Cover possible refunds for overpayment of the tax; and
    2. Redeem dishonored checks and drafts deposited to the credit of the suspense account.
  6. After one (1) year has elapsed after the effective date of the abolishment of the tax, the secretary shall remit the balance of the account to the governing bodies of the cities and counties and close the account.
  7. The restriction of the use of the last federal decennial census referred to in this subsection shall not apply in the case of annexation, nor shall it affect the taking of a special census for any purpose other than the distribution of a countywide sales tax.
  8. It is the intention of this subsection that the proceeds from the countywide gross receipts tax shall be allocated and distributed to each county and the municipalities therein on the basis of the last federal decennial census or the last countywide special census, whichever is the most recent. However, in those counties in which one (1) or more municipalities had a special census before April 7, 1987, and the proceeds of the tax were distributed on the basis of the special census, the proceeds of the tax shall continue to be allocated and distributed in the same manner as those funds were distributed before April 7, 1987, until a special countywide census or a federal decennial census is conducted in the county.
5. 1. Except for revenue collected under subdivision (e)(2) of this section, money collected that is derived from a tax on aviation fuel levied by a county where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport located within the levying city and county and transmitted to the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this subsection.
6. Money collected that is derived from a tax on aviation fuel levied by a county that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the county and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. 1. There is created a trust fund for the remittance of local sales and use taxes which shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes which was collected in local taxing jurisdictions which are not immediately identifiable and money collected in local jurisdictions which have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money which has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
    3. 1. Money reported as local sales and use taxes, which was collected by an out-of-state vendor and which is not identifiable, shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes. Any such funds so deposited shall not be included for computation of transfer to general revenue in subdivision (a)(2)(B) of this section.
      2. The Treasurer of State shall distribute unidentified local sales and use taxes collected by out-of-state vendors to the county treasurers and city treasurers as determined by their proportionate share of distribution from the Local Sales and Use Tax Trust Fund on a monthly basis.
2. 1. The Treasurer of State, as the administrator of the Local Sales and Use Tax Trust Fund shall review the flow of moneys through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. After making the estimate, the administrator shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall monthly transmit to the county treasurers and city treasurers their proportionate share of the interest derived from investment of the Local Sales and Use Tax Fund.
1. In any county having previously adopted a one percent (1%) countywide sales tax pursuant to this subchapter or § 26-74-201 et seq., which has not adopted a one percent (1%) countywide compensating use tax, the one percent (1%) countywide sales tax is levied and recognized to be in full force and effect as of the date of its adoption and previous levy by the county.
2. The collection and distribution of funds collected pursuant to this section shall be pursuant to this subchapter or § 26-74-201 et seq., and the procedures thereunder.
1. In all counties which adopt a local sales tax under the provisions of this subchapter or § 26-74-201 et seq., or which prior to September 4, 1987, have adopted a local sales tax under the provisions of this subchapter or § 26-74-201 et seq., there is also levied a local compensating use tax. The rate of use tax levied by this section shall be the same as that of the sales tax in the county.
2. No additional tax shall be levied by this section when a use tax is otherwise levied under the provisions of §§ 26-74-201 — 26-74-219, 26-74-221, 26-74-315 — 26-74-317, 26-75-223, and 26-75-318.
3. Any tax levied under the provisions of this section shall be levied, collected, and administered in accordance with the provisions of §§ 26-74-201 — 26-74-219, 26-74-221, 26-74-315 — 26-74-317, 26-75-223, and 26-75-318.
1. 1. Any county general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
2. 1. Each vendor who is liable for one (1) or more county sales or use taxes shall report a combined county sales tax and a combined county use tax on his or her sales and use tax report.
  2. The combined county sales tax is equal to the sum of all sales taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
  3. The combined county use tax is equal to the sum of all use taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
3. This section applies only to taxes collected by the Secretary of the Department of Finance and Administration.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any local tax imposed pursuant to this subchapter shall be the same as for the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., as set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any city or county under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from the sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the city or county.
1. The county quorum court of any county not having a countywide one percent (1%) sales and use tax on March 14, 1991, may call an election for the levy of a one-half percent (0.5%) countywide sales and use tax for any purpose for which the county general fund or county road fund may be used including allocating portions of this tax to the municipalities located therein. The election shall be held within one hundred twenty (120) days of the ordinance calling the election.
2. The quorum courts shall notify their respective county board of election commissioners that the measure has been referred to the vote of the people and shall submit a copy of the ballot title to their respective boards.
1. The ballot title to be used shall be substantially in the following form:
2. The ballot title may also include an expiration date for the levy of the tax, and if adopted in this form the tax shall cease to be levied on the date noted on the ballot.
3. Any tax adopted for a specified period of time shall cease to be levied on the date indicated on the ballot.
1. The election shall be conducted in the manner provided by law for all other county elections unless otherwise specified in this subchapter.
2. When the election results have been certified, the county court shall immediately issue a proclamation declaring the results of the election and cause the proclamation to be published one (1) time in a newspaper having general circulation within the county.
3. Any person desiring to challenge the results of the election as published in the proclamation shall file the challenge in the circuit court of the county within thirty (30) days after the date of publication of the proclamation.
4. 1. The county court shall notify the Secretary of the Department of Finance and Administration of the tax after publication of the proclamation has occurred and ninety (90) days before the effective date of the tax.
  2. 1. If no election challenge is timely filed, there shall be levied, effective on the first day of the first month of the calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers and after the expiration of the thirty-day challenge period, a one-half-percent tax on the gross receipts from the sale of all items that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
    2. In every county where the local sales and use tax has been adopted pursuant to the provisions of this subchapter, there is imposed an excise tax on the storage, use, distribution, or consumption within the county of tangible personal property and services purchased, leased, or rented from any retailer outside the state after the effective date of the sales and use tax for storage, use, distribution, or other consumption in the county at a rate of one-half percent (0.5%) of the sale price of the property and services or in the case of leases or rentals of the lease or rental price, the rate of the use tax to correspond to the rate of the sales tax portion of the tax.
  3. The use tax portion of the local sales and use tax shall be collected according to the terms of the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
5. 1. In the event of an election challenge, the tax shall be collected as prescribed in subsection (d) of this section unless enjoined by a court order.
  2. A hearing involving this litigation shall be advanced on the docket of the courts and disposed of at the earliest feasible time.
1. Within ten (10) days after the certification of the votes of any election resulting in the adoption of a tax levied pursuant to this subchapter and ninety (90) days before the effective date of the rate change, the county court shall notify the Secretary of the Department of Finance and Administration of the results.
2. A rate change will become effective only on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers.
3. A rate change on a purchase from a printed catalog in which the purchaser computed the tax based upon local tax rates published in the catalog will be applicable beginning on the first day of a calendar quarter after a minimum of one hundred twenty (120) days' notice by the secretary to the sellers.
4. For sales and use tax purposes only, a local boundary change will become effective only on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers.
1. A county shall provide in its ordinance authorized by this subchapter a rebate from the county for taxes collected pursuant to this subchapter in excess of two thousand five hundred dollars ($2,500) of the gross receipts, gross proceeds, or sales price on the sale of a:
  1. Motor vehicle;
  2. Aircraft;
  3. Watercraft;
  4. Modular home;
  5. Manufactured home; or
  6. Mobile home.
2. 1. When a rebate would be due pursuant to the provisions of this subchapter as a result of the purchase of a new or used motor vehicle and when the tax on the new or used motor vehicle is collected directly from the purchaser pursuant to the provisions of § 26-52-510, then the Secretary of the Department of Finance and Administration shall collect only the amount of tax due less the amount to which the purchaser would be entitled under the rebate provisions of this subchapter.
  2. When the rebate is credited against tax paid as set out in this subsection, then no other rebate of the tax shall be given.
1. 1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this subchapter and all other subchapters authorizing a county sales and use tax in each county and shall deposit all such revenues with the Treasurer of State.
  2. 1. Upon receipt of the funds, the Treasurer of State shall deduct three percent (3%) thereof as a charge by the state for its services as specified in this subchapter and shall credit the three percent (3%) to the Constitutional Officers Fund and the State Central Services Fund.
    2. In addition, the Treasurer of State is authorized to retain in the Local Sales and Use Tax Trust Fund an amount not to exceed five percent (5%) of the total amount received from the tax levied by each county, to be used by the Treasurer of State to:
      1. Make remittances to the county for rebates made by the county for taxes in excess of amounts specified by the particular county ordinances paid by a taxpayer on a single transaction;
      2. Make refunds for overpayment of the taxes; and
      3. Redeem dishonored checks and drafts received and deposited into the Local Sales and Use Tax Trust Fund.
  3. Furthermore, the Treasurer of State shall determine which cities or towns within the county do not levy a local sales tax and remit to those cities or towns a percentage of the tax based upon the population of the city or town versus the population of the county.
2. 1. Except as set forth in subsections (g) and (h) of this section, all funds received by the Treasurer of State from the sales tax levied by each county, after deducting the amounts required by subsection (a) of this section, shall be credited to the account of the county where collected.
  2. 1. The Treasurer of State shall monthly transmit to the county treasurer the moneys received by the Treasurer of State from the sales tax levied by such county and credited to the account of the county in the Local Sales and Use Tax Trust Fund.
    2. The county treasurer of any county which has levied a sales tax pursuant to this subchapter and which rebates taxes paid on a single transaction in excess of a specified amount shall monthly certify to the Treasurer of State the total amount of rebates paid since the preceding certification, and the Treasurer of State shall remit that amount to the county treasurer from the Local Sales and Use Tax Trust Fund.
3. Funds received by the counties pursuant to the provisions of this subchapter may be used by the counties for any purpose for which the county general fund or county road fund may be used, including allocating portions to municipalities located therein.
4. The Treasurer of State is authorized to make refunds for overpayment of the county sales tax and to redeem dishonored checks and drafts issued in payment of the county sales tax from the Local Sales and Use Tax Trust Fund.
5. When any tax adopted by a county pursuant to this subchapter ceases, the secretary shall retain in the account of that county in the Local Sales and Use Tax Trust Fund for a period of one (1) year an amount equal to five percent (5%) of the final remittance to the county and municipalities therein at the time of termination of the collection of the tax to:
  1. Cover possible rebates by the county;
  2. Cover refunds for overpayment of taxes; and
  3. Redeem dishonored checks and drafts deposited to the credit of the Local Sales and Use Tax Trust Fund.
6. After one (1) year has elapsed after the tax ceases in any county, the secretary shall transfer the balance in that county's account to the county and shall close the account.
7. 1. Except for revenue collected under subdivision (g)(2) of this section, money collected that is derived from a tax on aviation fuel levied by a county where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport located within the levying county and transmitted to the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this section.
8. Money collected that is derived from a tax on aviation fuel levied by a county that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the county and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any local tax imposed pursuant to this subchapter shall be the same as for the state gross receipts tax and compensating tax, as set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any county under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from such sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the county.
1. 1. 1. Any county general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
      1. Motor vehicle;
      2. Aircraft;
      3. Watercraft;
      4. Modular home;
      5. Manufactured home; or
      6. Mobile home.
    2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
      1. Motor vehicle;
      2. Aircraft;
      3. Watercraft;
      4. Modular home;
      5. Manufactured home; or
      6. Mobile home.
  2. A vendor collecting, reporting, and remitting the county sales or use taxes shall show county sales taxes as a separate entry on the tax report form filed with the Secretary of the Department of Finance and Administration.
2. 1. In the case of any taxpayer not subject to the levy of a use tax on tangible personal property or taxable services brought into the State of Arkansas for storage until such property is subsequently initially used in the State of Arkansas, a county use tax shall be computed on each purchase of such property and services by the taxpayer as if all the property was subject upon purchase to the county use tax up to the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. The taxes so computed shall be aggregated on a monthly basis, and the aggregate monthly amount shall be divided by the sum of the total purchases of such property on which the taxes are computed, and the quotient shall be multiplied by the amount of the taxpayer's property subsequently initially used and subject to levy of a use tax within the county during the month for which the monthly aggregate tax figure was computed, and the product shall be the amount of county use tax liability for the taxpayer for the month computed.
1. 1. There is created a trust fund for the remittance of local sales and use taxes which shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes which was collected in local taxing jurisdictions which are not immediately identifiable and money collected in local jurisdictions which have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money which has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
2. 1. The Treasurer of State as the administrator of the Local Sales and Use Tax Trust Fund shall review the flow of moneys through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. After making the estimate, the administrator shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall monthly transmit to the county treasurers and city treasurers their proportionate share of the interest derived from investment of the Local Sales and Use Tax Trust Fund.
1. Notwithstanding any other laws granting counties authority to levy sales and use taxes, no county levying a tax pursuant to this subchapter shall have authority to levy combined total sales and use taxes at a rate greater than two percent (2%).
2. If any county levying a one-half percent (0.5%) tax under the authority of this subchapter subsequently levies any additional sales and use taxes under authority of any other law, the net revenues derived from any such additional levy or levies shall be allocated and distributed to the county and the municipalities in the county on a per capita basis in the manner provided in § 26-74-313.
1. If petitions are filed requesting an election for an initiated ordinance levying the tax authorized under this subchapter, the quorum court shall submit the question of the levying of the tax to the electors. The petitions must be signed by not less than five hundred (500) electors of the county. The election shall be held within one hundred twenty (120) days of the filing of the petitions. The tax shall be levied upon approval of a majority of the qualified electors voting on the issue at the election.
2. If petitions requesting a referendum election are filed, the quorum court levying a tax under this subchapter shall submit the question of the levying of the tax to the electors. The petitions must be signed by not less than five hundred (500) electors of the county and must be filed with the quorum court within thirty (30) days after the adoption of the ordinance levying the tax.
1. 1. In any county levying a tax as authorized in this subchapter, the tax so levied shall be paid by the persons, firms, and corporations liable therefor and shall be collected by the advertising and promotion commission of the levying county or by a designated agent of the advertising and promotion commission in the same manner and at the same time as the tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
  2. The advertising and promotion commission or its designated agent shall transmit monthly to the county public facilities board the revenues collected to be used as prescribed in this subchapter.
2. 1. The person paying the tax shall report and remit the tax upon forms provided by the advertising and promotion commission and as directed by the advertising and promotion commission.
  2. The rules, forms of notice, assessment procedures, and the enforcement and collection of the tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., so far as practicable shall be applicable with respect to the enforcement and collection of the tax levied pursuant to the authority of this subchapter. However, the administration and enforcement and all actions shall be by and in the name of the advertising and promotion commission through the proper advertising and promotion commission officials or agents.
3. Any county levying a tax as authorized in this subchapter shall create a county advertising and promotion commission to be composed of seven (7) members, as follows:
  1. Four (4) members shall be owners or managers of businesses in the tourism industry, at least three (3) of whom shall be owners or managers of hotels, motels, or restaurants, and all of whom shall be appointed by the governing body of the county for staggered terms of four (4) years;
  2. Two (2) members of the advertising and promotion commission shall be members of the governing body of the county and selected by the governing body; and
  3. One (1) member shall be from the public at large and shall be nominated by the county judge and approved by the governing body of the county for a term of four (4) years.
4. In any county which levies a tax as authorized in this subchapter and creates a advertising and promotion commission as provided in this section, the four (4) tourism industry representatives appointed by the governing body of the county at the first meeting of the advertising and promotion commission shall draw lots for terms so that:
  1. One (1) of the members will serve for a term of one (1) year;
  2. One (1) shall serve for a term of two (2) years;
  3. One (1) shall serve for a term of three (3) years; and
  4. One (1) shall serve for a term of four (4) years.
1. As an alternative to the method for dissolution of a district set forth in § 6-61-519(b), the question of dissolving the district and repealing the millage tax may be authorized by the affirmative vote of a majority of the members of the local board of the community college and submitted to the electors of the district at a special or general election called by ordinance of the quorum court of the county in which the district is located.
2. The dissolution of the district and repeal of the millage tax may be made contingent upon the electors levying a countywide sales and use tax pursuant to this subchapter.
3. The question of dissolving the district, repealing the millage tax, and levying the countywide sales and use tax shall be subject to approval by a majority of the qualified electors of the district voting on the question at the election.
1. Any eligible county may by ordinance of its quorum court levy a countywide sales and use tax in the amount of one-eighth of one percent (0.125%), one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), or one percent (1%) to provide capital improvements to or the maintenance and operation of an eligible campus.
2. 1. No ordinance shall be adopted by the quorum court of an eligible county for the purpose of levying a tax under this subchapter unless the quorum court shall have been requested to adopt the ordinance by the local board and until a majority of the qualified electors of the eligible county voting on the question at a special election shall have approved levy of the tax.
  2. The election shall be called by ordinance and proclamation issued in accordance with § 7-11-201 et seq.
  3. The ballot for the election shall be subject to the approval of the local board.
3. 1. The quorum court of an eligible county levying a tax under this subchapter may refer to the voters of the county the question of an extension of the period during which the tax is to be levied and an extension of the period during which the tax cannot be repealed or reduced.
  2. The end of the period for which the tax is levied shall be the last day of a calendar quarter.
  3. The election to extend the period during which the tax authorized under this subchapter is to be levied and to extend the period during which the tax cannot be repealed or reduced shall be called by ordinance issued under § 7-11-201 et seq.
  4. An election to extend the period of the levy of the tax and to extend the period during which the tax cannot be repealed or reduced is not an election on the levy of the tax.
4. The quorum court shall notify its county board of election commissioners that a measure has been referred to the vote of the people under this section and shall submit a copy of the ordinance calling the election and the proposed ballot language to its county board of election commissioners.
1. The ballot for an election called under § 26-74-603(b) shall be substantially in the form and of the content determined by the quorum court of the eligible county.
2. In addition to the question of the levy of the tax, the ballot for the election called under § 26-74-603(b) at the request of the local board may provide for the dissolution of the district pursuant to the merger of the community college into the qualified university.
3. 1. The ballot for an election called under § 26-74-603(b) may provide for an effective date for the levy of the tax under § 26-74-605(g) for termination or reduction of the tax after a specified period and for restrictions on the power to repeal or reduce the tax if the agreement for merger is entered into in reliance on such restrictions.
  2. The period for which the tax cannot be repealed or reduced shall not exceed thirty (30) years.
4. 1. The ballot for an election called under § 26-74-603(c) on the question of an extension of the period for the levy of the tax and the period during which the tax cannot be reduced or repealed shall state the period during which the levy of the tax is to be extended and the new period during which the tax cannot be reduced or repealed.
  2. After giving effect to the proposed extension period, the period for which the tax cannot be repealed or reduced shall not exceed thirty (30) years from the effective date of the tax.
1. An election called under § 26-74-603 shall be conducted in the manner provided by law for all other county elections unless otherwise specified in this subchapter.
2. 1. Notice of the election shall be given by the county clerk by one (1) publication in a newspaper having a general circulation within the eligible county not less than ten (10) days prior to the election.
  2. No other publication or posting of a notice by any other public official shall be required.
3. When the election results have been certified, the county judge shall immediately issue a proclamation declaring the results of the election and cause the proclamation to be published one (1) time in a newspaper having general circulation within the eligible county.
4. Any person desiring to challenge the results of the election as published in the proclamation shall file the challenge in the circuit court of the eligible county within thirty (30) days after the date of publication of the proclamation.
5. 1. 1. If a challenge to an election called under § 26-74-603(b) is not timely filed, there shall be levied effective on the first day of the first month of the calendar quarter after a minimum of sixty (60) days' notice by the Secretary of the Department of Finance and Administration to sellers and subsequent to the expiration of the thirty-day challenge period a countywide tax on the gross receipts from the sale at retail within the eligible county of all items that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
    2. Furthermore, in every eligible county in which a local sales and use tax has been adopted under this subchapter, there is imposed an excise tax on the storage, use, distribution, or consumption within the eligible county of taxable services and tangible personal property purchased, leased, or rented from any retailer outside the state after the effective date of the sales and use tax for storage, use, distribution, or other consumption in the eligible county at the same rate as on the sale price of the property or in the case of leases or rentals of the lease or rental price, the rate of the use tax to correspond to the rate of the sales tax portion of the tax.
  2. The use tax portion of the local sales and use tax shall be collected according to the terms of the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
6. 1. In the event of an election challenge, the tax shall be collected as prescribed in subsection (e) of this section unless enjoined by a court order.
  2. A hearing involving this litigation shall be advanced on the docket of the courts and disposed of at the earliest feasible time.
7. Notwithstanding the provisions of subsections (e) and (f) of this section, the effective date of the levy of the tax may be delayed beyond the effective date as set forth in subsection (e) of this section to a date to be determined as set forth in the ballot, which date must be the first day of a calendar quarter.
8. 1. To extend the period for the levy of a tax under § 26-74-603(c), after the publication of the proclamation has occurred and at least ninety (90) days before the current period for the levy of the tax is set to expire, the county shall notify the secretary of the new period for the levy of the tax that was approved by the voters.
  2. A tax extended under § 26-74-603(c) shall continue to be levied until the end of the new tax period.
  3. If the voters do not approve a change in the period for the levy of the tax, the:
    1. Tax shall continue to be levied until the end of the period previously approved by the voters; and
    2. Question may be resubmitted to the voters at the time permitted by the applicable election laws.
1. Subject to the restriction on the ballot for the levy of the tax as set forth in § 26-74-604, the tax shall expire only after a majority of electors voting on the question have approved the abolishment of the tax.
2. The termination date shall be the last day of a calendar quarter determined by using the provisions of § 26-74-605(c)-(e) as if the tax were being approved.
1. A tax levied pursuant to the authority granted in this subchapter shall be applicable to sales of items and services sold by a business, and the tax shall be administered under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. When a direct pay permit holder purchases tangible personal property or taxable services either from an Arkansas or out-of-state vendor for use, storage, consumption, or distribution in Arkansas, the permit holder shall accrue and remit the county sales or use tax, if any, pursuant to the sourcing rules in §§ 26-52-521 and 26-52-522.
1. 1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this subchapter and all other subchapters authorizing a county sales and use tax in each eligible county and shall deposit all such revenues with the Treasurer of State.
  2. 1. Upon receipt of the funds, the Treasurer of State shall deduct three percent (3%) of the funds as a charge by the state for its services as specified in this subchapter and shall credit the three percent (3%) to the Constitutional Officers Fund and the State Central Services Fund.
    2. In addition, the Treasurer of State may retain in the Local Sales and Use Tax Trust Fund an amount not to exceed five percent (5%) of the total amount received from the tax levied by each eligible county, to be used by the Treasurer of State to:
      1. Make refunds for overpayment of the taxes; and
      2. Redeem dishonored checks and drafts received and deposited into the Local Sales and Use Tax Trust Fund.
2. 1. All funds received by the Treasurer of State from the tax levied by each eligible county after deducting the amounts required by subsection (a) of this section shall be credited to the account of the eligible county in which collected.
  2. The Treasurer of State shall transmit monthly to the county treasurer the moneys received by the Treasurer of State from the sales tax levied by the eligible county and credited to the account of the eligible county in the Local Sales and Use Tax Trust Fund.
3. Within a reasonable time after receipt by the eligible county, all collections of the tax shall be transmitted to the qualified university and applied to the capital improvements to or the operation and maintenance of the eligible campus.
4. The Treasurer of State may make refunds for overpayment of the county sales tax and to redeem dishonored checks and drafts issued in payment of the county sales tax from the Local Sales and Use Tax Trust Fund.
5. When any tax adopted by an eligible county pursuant to this subchapter ceases, the secretary shall retain in the account of that eligible county in the Local Sales and Use Tax Trust Fund for a period of one (1) year an amount equal to five percent (5%) of the final remittance to the eligible county at the time of termination of the collection of the tax to:
  1. Cover refunds for overpayment of taxes; and
  2. Redeem dishonored checks and drafts deposited to the credit of the Local Sales and Use Tax Trust Fund.
6. After one (1) year has elapsed after the tax ceases in any eligible county, the secretary shall transfer the balance in that eligible county's account to the eligible county and shall close the account.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any tax imposed pursuant to this subchapter shall be the same as for the state gross receipts tax and the state compensating tax, as set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any eligible county under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from the sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the eligible county.
1. 1. Any county general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
2. A vendor collecting, reporting, and remitting the tax shall show the tax as a separate entry on the tax report form filed with the Secretary of the Department of Finance and Administration.
1. 1. There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a trust fund for the remittance of local sales and use taxes that shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes that was collected in local taxing jurisdictions that are not immediately identifiable and money collected in local jurisdictions that have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money that has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
2. 1. As the administrator of the Local Sales and Use Tax Trust Fund, the Treasurer of State shall review the flow of money through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. 1. After making the estimate, the Treasurer of State shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas.
    2. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall transmit monthly to the county treasurer the county's proportionate share of the interest derived from investment of the Local Sales and Use Tax Trust Fund.
1. This subchapter is intended to supplement all constitutional provisions and other acts adopted for the acquiring, constructing, and equipping of capital improvements of a public nature and the issuance of bonds for the financing of capital improvements of a public nature.
2. When applicable, in accordance with the provisions of this subchapter, this subchapter may be used by any city as an alternative, notwithstanding and without the necessity of compliance with any constitutional provision or any other act authorizing the city, or any commission or agency of the city, to issue bonds for the purpose of financing the acquisition, construction, and equipment of capital improvements of a public nature.
3. 1. This subchapter is intended to supplement and be levying authority for all Arkansas municipalities in addition to all other statutes authorizing municipal sales and use taxes.
  2. Collections of a tax levied by this subchapter may be used to secure the payment of bonds or for any purpose for which the municipality's general fund may be used or for a combination thereof.
1. A city levying the tax as permitted in this subchapter in addition to the authority existing under the laws of the state is authorized to acquire, construct, equip, reconstruct, extend, and improve capital improvements of a public nature, collectively referred to as a “project”, within or near such city and is authorized to issue bonds to provide funds for accomplishing projects and to pledge all or any part of the revenues which the city is entitled to receive from the tax levied by such city pursuant to this subchapter to pay lease rentals or the principal of, interest on, and fees and expenses in connection with such bonds.
2. Bonds issued by a city pursuant to this subchapter shall be authorized by ordinance of the governing body. The bonds may:
  1. Be coupon bonds payable to bearer or may be registered as to principal or as to principal and interest;
  2. Be exchangeable for bonds of another denomination;
  3. Be in such form and denominations;
  4. Be made payable at such places within or without the state;
  5. Be issued in one (1) or more series;
  6. Bear such date or dates;
  7. Mature at such time or times, not exceeding forty (40) years from their respective dates;
  8. Bear interest at such rate or rates;
  9. Be payable in such medium of payment;
  10. Be subject to such terms of redemption; and
  11. May contain such other terms, covenants, and conditions, as the ordinance authorizing their issuance may provide, including, without limitation, those pertaining to:
    1. The custody, investment, and application of the proceeds of the bonds;
    2. The collection and disposition of revenues;
    3. The maintenance of various funds and reserves;
    4. The nature and extent of the security and pledging of revenues;
    5. The rights, duties, and obligations of the city and the trustee for the holders and registered owners of the bonds; and
    6. The rights of the holders and registered owners of the bonds.
3. There may be successive bond issues for the purpose of financing the same project, and there may be successive bond issues for financing the cost of reconstructing, replacing, constructing additions to, extending, improving, and equipping projects already in existence, whether or not originally financed by bonds issued under this subchapter, and with each successive issue to be authorized as provided by this subchapter. Priority between and among issues and successive issues as to security of the pledge of revenues and lien on the project facilities involved may be controlled by the ordinance authorizing the issuance of bonds under this subchapter. Subject to the provisions of this subchapter pertaining to registration, the bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas. A copy of the ordinance authorizing bonds under this subchapter, certified by the clerk or recorder of the city, shall be filed with the Secretary of the Department of Finance and Administration and with the Treasurer of State.
4. The bonds shall be executed by the mayor of the city and attested by the clerk or recorder of the city, by their manual or facsimile signatures. Coupons attached to the bonds shall be executed by the facsimile signature of the mayor. In case any of the officers whose signatures appear on the bonds or coupons cease to be such officers before delivery of the bonds or coupons, their signatures shall nevertheless be valid and sufficient for all purposes. The bonds shall be sealed with the seal of the city issuing the bonds.
5. The bonds shall not be general obligations of the city involved, but shall be special obligations secured and payable as provided in this subchapter. In no event shall the bonds constitute an indebtedness of the city within the meaning of any constitutional or statutory limitation. The principal of, and interest on, all bonds issued under the authority of this subchapter shall be secured by a pledge of, and shall be payable from, all or any part of the revenues derived from the tax levied by the city pursuant to this subchapter or from all or any part of the revenues derived from the operation of the project involved, if and to the extent permitted by other laws of the State of Arkansas authorizing the issuance of revenue bonds secured by the revenues of such facilities. The ordinance authorizing the issuance of bonds together with this subchapter shall constitute a contract by and between the city and the holders and registered owners of the bonds issued by the city under the authority of this subchapter, which contract, and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the contract and all rights of the holders and registered owners of the bonds and the obligations of the city may be enforced by mandamus or any other appropriate proceeding at law or in equity. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter.
6. The ordinance authorizing the bonds may provide for the execution by the city with a bank or trust company, within or without the State of Arkansas, of a trust indenture. The trust indenture may control the priority between and among successive issues and series, and may contain any other terms, covenants, and conditions that are deemed desirable by the governing body including, without limitation, those pertaining to:
  1. The custody, investment, and application of the proceeds of bonds;
  2. The collection and disposition of revenues;
  3. The maintenance of various funds and reserves;
  4. The nature and extent of the security;
  5. The rights, duties, and obligations of the city and the trustee for the holders and registered owners of the bonds; and
  6. The rights of the holders and registered owners of the bonds.
7. Bonds issued under the authority of this subchapter may be sold at public or private sale. If sold at public sale, the bonds shall be sold on sealed bids, and notice of the sale shall be published one (1) time in a newspaper having a general circulation throughout the State of Arkansas, at least ten (10) days prior to the date of the sale. In either case, the bonds may be sold at such price as the city may accept, including sale at a discount.
8. Bonds issued under the authority of this subchapter are made securities in which insurance companies, trust companies, banks, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds including capital in their control or belonging to them. Such bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is authorized by law. Any municipality or county, or any board, commission, or other authority established by any such municipality or county, or the boards of trustees, respectively, of any retirement fund or retirement system created by or pursuant to authority conferred by the General Assembly in its discretion may invest any of its funds not immediately needed for its purposes in bonds issued under the authority of this subchapter, and bonds issued under the authority of this subchapter shall be eligible to secure the deposit of public funds.
9. The principal of and interest on bonds issued under the authority of this subchapter shall be exempt from all state, county, school district, community college district, and municipal taxes. This exemption shall include income, property, inheritance, and estate taxes.
10. Revenue bonds may be issued hereunder for the purpose of refunding any obligations issued under this subchapter or under the authority of any other law for the purpose of providing all or part of the funds for the construction, reconstruction, extension, equipment, acquisition, or improvement of any capital improvements of a public nature. These refunding bonds may be combined with bonds issued under the provisions of this section into a single issue. When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be either applied to the payment of the obligations refunded or deposited in escrow for the retirement thereof. The ordinance under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby. These refunding bonds shall be issued and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of these bonds.
1. 1. The governing body of any city may adopt an ordinance levying a local sales and use tax in the amount of one-eighth of one percent (0.125%), one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), one percent (1%), or any combination of these amounts for the benefit of the city in accordance with the provisions of this subchapter.
  2. Each local sales and use tax authorized under this subchapter shall be adopted by ordinance or by petition as described in subsection (b) of this section and with the approval of the voters of the municipality in accordance with this subchapter.
2. 1. A legal voter of a city may file a petition with the governing body of that city requesting a special election on the question of levying a local sales and use tax authorized under this subchapter in an amount as provided in subdivision (a)(1) of this section.
  2. The petition shall be signed by a number of the legal voters in the city that is no less than fifteen percent (15%) of the number of votes cast for the office of city clerk at the last preceding general election.
3. 1. The governing body of the city by such levying ordinance or the petition described in subsection (b) of this section is not required to but may provide for an expiration date for such local sales and use tax.
  2. If an expiration date is provided, that date shall be the last day of the last month of a calendar quarter.
4. 1. The levying ordinance or the petition may indicate an effective date for the ordinance or petition that is effective later than the effective date provided in § 26-75-209(1)(D)(ii).
  2. The effective date of the ordinance or petition delayed under subdivision (d)(1) of this section shall:
    1. Be scheduled on the first day of the first month of a calendar quarter; and
    2. Not be delayed for more than thirty-six (36) months after the date the ordinance or petition would be effective under § 26-75-209(1)(D)(ii).
5. The sales tax portion of any local sales and use tax adopted under this subchapter shall be levied by the governing body on the receipts from the sale at retail of all items and services that are subject to taxation under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
1. 1. On the date of the filing of a petition described in § 26-75-207(b) or on the date of adoption of an ordinance levying a local sales and use tax for the benefit of the city, or within thirty (30) days following the filing of the petition described in § 26-75-207(b) or adoption of the ordinance, the city by ordinance shall provide for the calling of a special election on the question in accordance with § 7-11-201 et seq.
  2. The special election shall be called for a date no later than one hundred twenty (120) days from the date of action of the governing body in establishing the date of the special election.
  3. The date for the special election may be the same as the date for the next regular municipal election if the next regular municipal election is to be held within the one-hundred-twenty-day period.
  4. The governing body of the city shall notify the county board of election commissioners that the question has been referred to the vote of the people and shall submit a copy of the ballot title to the county board of election commissioners.
  5. The election shall be conducted in the manner provided by law for all other municipal elections unless otherwise provided in this subchapter.
2. 1. The ballot title to be used at such election shall be substantially in the following form:
  2. If an expiration date as described in § 26-75-207(c) for the local sales and use tax has been provided for by the governing body of the city in the levying ordinance or the petition described in § 26-75-207(b), the ballot title shall also include an expiration date for the levy of the tax, and if adopted in this form, the tax shall cease to be levied on the date noted on the ballot.
  3. 1. 1. The governing body of a city may refer to the voters a change in the expiration date for the sales and use tax approved by the voters to extend the levy of the sales and use tax beyond the expiration date previously approved.
      2. The proposed expiration date shall be the last day of the last month of a calendar quarter.
    2. If the governing body of a city refers a change in the expiration date for an existing sales and use tax levied under this subchapter to the voters, the governing body shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the expiration date for a sales and use tax levied under this subchapter shall be conducted in the manner provided by law for all other municipal elections.
      2. The results of the election under this subsection shall be certified, proclaimed, and subject to challenge under § 26-75-209.
    4. 1. To extend the sales and use tax levied under this subchapter to a new expiration date, the city shall notify the Secretary of the Department of Finance and Administration of the new expiration date that was approved by the voters after publication of the proclamation has occurred and at least ninety (90) days before the current expiration date of the sales and use tax.
      2. The sales and use tax extended under this subdivision (b)(3) shall continue to be levied until the new expiration date.
    5. If the voters do not approve a change in the expiration date for the sales and use tax levied under this subchapter, the:
      1. Sales and use tax shall continue to be collected until the expiration date previously approved by the voters; and
      2. Question may be resubmitted to the voters at the time permitted by the election laws and § 26-75-213(a)(1) shall not apply.
    6. An election to change the expiration date for a sales and use tax levied under this subchapter is not an election on the levy of the sales and use tax.
  4. 1. If an effective date for the ordinance or petition is delayed under § 26-75-207(d), the ballot title shall also include the effective date of the ordinance or petition or the effective date of the levy of the tax.
    2. If the ballot title with the delayed effective date is approved by the voters, the ordinance or petition or the tax shall not become effective until the date stated on the ballot.
3. 1. 1. The ballot may also indicate designated uses of the revenues derived from the sales and use tax.
    2. If the ballot indicates designated uses and the tax is approved, the proceeds shall only be used for the designated uses set forth in the ballot.
  2. The proceeds may be used for other designated uses if the electors approve a change in the designated use of the revenues by vote under this subsection.
  3. 1. The governing body of a city may refer to the voters a change in the designated use of revenues derived from a sales or use tax that was approved by the voters.
    2. If the governing body of a city refers a change in the designated use of revenues derived from a sales or use tax to the voters, the governing body shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the designated use of revenues derived from a sales or use tax shall be conducted in the manner provided by law for all other municipal elections.
      2. The results of an election under this subsection shall be certified, proclaimed, and subject to challenge under the procedures stated in § 26-75-209.
  4. If the voters approve a change in the designated use of revenues derived from a sales or use tax, the change in the designated use shall apply to all revenues collected on the first day of the calendar month following the expiration of the thirty-day challenge period under § 26-75-209.
  5. 1. If the voters do not approve a change in the designated use of revenues derived from a sales or use tax, the tax shall continue to be collected, and the revenues derived from the tax shall continue to be used for the purposes indicated in the ballot for the tax.
    2. An election to change the designated use of revenues derived from a sales or use tax shall not constitute an election on the levy of the tax.
  6. Any city that has levied a local sales and use tax under this subchapter with a portion of the revenues derived from the tax pledged to secure lease rentals or bonds may not change the tax to reduce the pledge in favor of the lease or bonds.
1. 1. Except as set forth in subsection (b) of this section, in any city in which a city sales and use tax has been adopted in the manner provided in this subchapter, and subsequent to the adoption of the city tax the county where the city is located enacts a county sales and use tax, then the city may abolish its sales and use tax:
    1. By a roll call of two-thirds (2/3) of all the members elected to the governing body of the city, excluding the mayor; or
    2. After an election called by:
      1. Action of the governing body of the city; or
      2. A petition of the qualified voters in the city.
  2. In all other cases, except under subsection (b) of this section, the city may abolish all or a portion of the sales and use tax by:
    1. A roll call vote of two-thirds (2/3) of all members elected to the governing body of the city, excluding the mayor, if the governing body of the city has determined that the purposes of the tax cannot be fulfilled or cannot continue to be fulfilled; or
    2. After an election called by:
      1. Action of the governing body of the city; or
      2. A petition of the qualified voters in the city.
  3. The initiative procedures in Arkansas Constitution, Article 5, § 1, and any ordinances of the city's governing initiative procedures shall govern the petition of the qualified voters under this subsection and the calling and holding of an election concerning the abolishment of the tax.
  4. The governing body of the city may call for an election under this subsection according to the procedures set forth in this subchapter for the calling of the initial election on such question.
  5. 1. The ballot title for use in any election under this subsection shall be substantially the same as indicated in § 26-75-208(b), except that the word “ABOLITION” shall be substituted for the word “ADOPTION” as it appears in the ballot title set forth in § 26-75-208(b).
    2. A ballot title that contains a question for qualified voters on whether to continue the levy of a local sales and use tax complies with this subdivision (a)(5).
2. 1. In any city in which a local sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure the payment of lease rentals or bonds as authorized by this subchapter, that portion of the tax pledged to lease rentals or bonds shall not be repealed, abolished, or reduced so long as the lease is in effect or any of the bonds are outstanding.
  2. The bonds shall not be deemed outstanding to the extent that sufficient tax collections have been set aside to pay the bonds when due.
3. The effective date of any affirmative vote of the qualified voters to abolish the tax under subsection (a) of this section shall correspond to the dates indicated in § 26-75-209 for the initial effective date of the tax.
4. 1. The effective date of any affirmative vote by the governing body of the city to abolish the tax under subsection (a) of this section shall be on the first day of the calendar quarter after the expiration of ninety (90) days from the date a written statement signed by the chief executive officer of the city abolishing the tax is filed with the Secretary of the Department of Finance and Administration certifying that the governing body of the city has adopted an ordinance abolishing the tax.
  2. A copy of the ordinance shall be attached to the certificate.
1. As soon as is feasible, and no later than ten (10) days following each of the events set forth in the ordinance with reference to the procedure for the adoption or abolition of a tax and the effective dates of such an action, the city clerk of the city shall notify the Secretary of the Department of Finance and Administration of such event.
2. 1. If any city in which a local sales and use tax has been imposed in the manner provided for in this subchapter shall thereafter change or alter its boundaries, the city clerk of the city shall forward to the secretary at least ninety (90) days before the effective date a certified copy of the ordinance adding or detaching territory from the city, which shall be accompanied by a map clearly showing the territory added or detached.
  2. After receipt of the ordinance and map, the tax imposed under this subchapter shall be effective in the added territory or abolished in the detached territory on the first day of the first month of the calendar quarter following the expiration of sixty (60) days' notice by the secretary to sellers.
1. 1. 1. In each city where a local sales and use tax has been imposed in the manner provided by this subchapter, every retailer shall add the tax imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and the tax imposed by this subchapter to his or her sale price, and when added, the combined tax shall:
      1. Constitute a part of the price;
      2. Be a debt of the purchaser to the retailer until paid; and
      3. Be recoverable at law in the same manner as the purchase price.
    2. When the sale price in the city shall involve a fraction of a dollar, the two (2) combined taxes shall be added to the sale price.
    3. A retailer shall be entitled to the same discount with respect to tax remitted under this subchapter as is authorized for the collection and remission of gross receipts taxes to the State of Arkansas as authorized in § 26-52-503.
  2. 1. Any fraction of one cent (1¢) of tax that is less than one-half of one cent (½ of 1¢) shall not be collected.
    2. Any fraction of one cent (1¢) of tax equal to one-half of one cent (½ of 1¢) or more shall be collected as a whole one cent (1¢) of tax.
  3. In the event that the General Assembly or the electors of the state shall either increase or decrease the rate of the state gross receipts tax, the combined rate of the state gross receipts tax and the local sales tax shall be the sum of the two (2) rates.
2. The tax levied in this subchapter on new and used motor vehicles shall be collected by the Secretary of the Department of Finance and Administration directly from the purchaser in the manner prescribed in § 26-52-510.
3. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on the vendor's sales and use tax report.
  2. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  4. This subsection only applies to a tax collected by the secretary.
1. 1. Except as provided in § 26-75-210 and in subsection (b) of this section, when the question of the levy or repeal of a city sales and use tax is submitted to the electors and the proposition is approved or defeated, the question shall not again be submitted to the electors by ordinance of the governing body of the city or by a petition of electors for a period of six (6) months from the date the question was last voted upon.
  2. A petition requesting that the question be submitted to the electors of the city shall contain the signatures of at least fifteen percent (15%) of the electors of the city as determined by the total number of votes cast for all candidates for mayor of the city at the last preceding general election.
  3. 1. The petition shall be filed with and verified by the city clerk.
    2. If the petition is found to be sufficient, the question shall be submitted to the electors at a special election on a date as may be requested by the petition.
  4. The special election shall be called in accordance with § 7-11-201 et seq. for a date not more than ninety (90) days from the date on which the city clerk certifies the sufficiency of the petition to the governing body of the city.
2. In any city in which a local sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure the payment of lease rentals or bonds as authorized by this subchapter, that portion of the tax pledged to the payment of lease rentals or bonds shall not be repealed, abolished, or reduced so long as the lease is in effect or any of the bonds are outstanding.
1. On and after the effective date of any tax imposed under the provisions of this subchapter, the Secretary of the Department of Finance and Administration shall perform all functions incidental to the administration, collection, enforcement, and operation of the tax.
2. In addition to the state gross receipts tax and compensating tax, the secretary shall collect an additional tax under the authority of this subchapter on the receipts from the sale at retail or on the sale price or lease or rental price on the storage, use, distribution, or other consumption of all taxable items and services subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
3. 1. The tax imposed under this subchapter and the tax imposed under the gross receipts tax and compensating tax shall be collected together and reported upon such forms and under such administrative rules as may be prescribed by the secretary not inconsistent with the provisions of this subchapter.
  2. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on his or her sales and use tax report.
  3. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  4. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  5. This subsection only applies to a tax collected by the secretary.
4. On and after the effective date of any proposition to abolish such local sales and use tax in any city, the secretary shall comply with the proposition as provided in this subchapter.
1. Subject to the provisions of subsection (b) of this section, if the General Assembly shall levy an additional statewide gross receipts tax of one percent (1%) or more, the governing body of any city which has levied a city sales and use tax pursuant to the authority granted in this subchapter, or under the provisions of § 26-75-301 et seq., § 26-75-501 et seq., or the Advertising and Promotion Commission Act, § 26-75-601 et seq., by ordinance approved by the governing body may repeal such city sales tax or city sales and use tax.
2. In any city in which a local sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure the payment of lease rentals or bonds as authorized by this subchapter, that portion of the tax pledged to the payment of lease rentals or bonds shall not be repealed, abolished, or reduced so long as the lease is in effect or any of the bonds are outstanding.
1. A city sales and use tax levied pursuant to the authority granted in this subchapter or in § 26-75-301 et seq. shall be applicable to sales of items and services sold by a business and shall be administered in accordance with the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. When a direct pay permit holder purchases tangible personal property or taxable services either from an Arkansas or out-of-state vendor for use, storage, consumption, or distribution in Arkansas, the permit holder shall accrue and remit the city sales and use tax, if any, pursuant to the sourcing rules in §§ 26-52-521 and 26-52-522.
1. 1. The Treasurer of State shall transmit to the treasurer or financial officer of each such city that city's share of local sales and use taxes collected under this subchapter periodically as promptly as feasible. Transmittals required under this subchapter shall be made at least monthly in each state fiscal year. Funds so transmitted may be used by the city for any purpose for which the city's general funds may be used.
  2. Before transmitting such funds, the Treasurer of State shall deduct three percent (3%) of the sum collected from each such city during such period as a charge by the state for its services specified in this subchapter, and the amount so deducted shall be deposited by the Treasurer of State to the credit of the account of the Constitutional Officers Fund and the State Central Services Fund.
2. 1. The Treasurer of State is authorized to retain in the suspense account of any city a portion of the city's share of the tax collected under this subchapter. Such balance so retained in the suspense account shall not exceed five percent (5%) of the amount remitted to the city.
  2. The Treasurer of State is authorized to make refunds from the suspense account of any city for overpayments made to such accounts, after such refunds have been approved by the Secretary of the Department of Finance and Administration, and to redeem dishonored checks and drafts deposited to the credit of the suspense account of such cities.
3. 1. When any city shall adopt the local sales and use tax and shall thereafter abolish such tax, the Treasurer of State shall retain in the suspense account of such city for a period of one (1) year five percent (5%) of the final remittance to such city at the time of termination of collection of such tax in the city to cover possible refunds for overpayment of the tax and to redeem dishonored checks and drafts deposited to the credit of such accounts.
  2. After one (1) year has elapsed after the effective date of abolishment of such tax, the Treasurer of State shall remit the balance of such account to the city and close the account. After this one-year period has lapsed and the account is closed, no refund will be allowed.
4. Any moneys collected which as indicated by a certified copy of an ordinance of the city previously filed with the secretary and the Treasurer of State are pledged to secure lease rentals or the payment of bonds authorized by this subchapter shall not be deposited into the State Treasury but shall be deposited by the Treasurer of State into banks designated by the city as cash funds and transmitted to the city subject to the charges payable and retainage authorized in this section. Charges deducted shall be transmitted to the Treasurer of State, and amounts retained shall be retained by the Treasurer of State as cash funds.
5. 1. Except for revenue collected under subdivision (e)(2) of this section, money collected from a tax on aviation fuel by a city where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport located within the levying city or within the county and transmitted to the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this subsection.
6. Except for revenue collected under subsection (e) of this section, money collected that is derived from a tax on aviation fuel levied by a city that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the city and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any local tax imposed pursuant to this subchapter shall be the same as for the state gross receipts tax and compensating tax, except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when such taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any city under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from such sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the city.
1. All city taxes adopted pursuant to § 26-75-301 et seq., § 26-75-501 et seq., or the Advertising and Promotion Commission Act, § 26-75-601 et seq., which are in effect on December 1, 1981, shall remain in full force and effect and are not repealed by the provisions of this subchapter except as to the administration, collection, enforcement, and operation of the tax as specifically set out in this subchapter.
2. It is recognized by the General Assembly that several municipalities, such as North Little Rock, Siloam Springs, Mountain Home, Conway, Caddo Valley, and others, have enacted a sales and use tax pursuant to § 26-75-301 et seq. It is the intent of the General Assembly to affirm the validity of sales and use taxes adopted and enacted by those municipalities. It is provided further that for city sales and use taxes adopted pursuant to these statutes, the procedures for repeal and enforcement as set out in this subchapter shall hereinafter be applicable to any such tax adopted by any city pursuant to them.
1. 1. Any municipal general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price from the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price from the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
2. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on his or her sales and use tax report.
  2. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
3. This section only applies to a tax collected by the Secretary of the Department of Finance and Administration.
1. 1. There is created a trust fund for the remittance of local sales and use taxes which shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes which was collected in local taxing jurisdictions which are not immediately identifiable and money collected in local jurisdictions which have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money which has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
    3. 1. Money reported as local sales and use taxes which was collected by an out-of-state vendor and which is not identifiable shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes. Any such funds so deposited shall not be included for computation of transfer to general revenue in subdivision (a)(2)(B) of this section.
      2. The Treasurer of State shall distribute unidentified local sales and use taxes collected by out-of-state vendors to the county treasurers and city treasurers as determined by their proportionate share of distribution from the Local Sales and Use Tax Trust Fund on a monthly basis.
2. 1. The Treasurer of State as the administrator of the Local Sales and Use Tax Trust Fund shall review the flow of moneys through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. After making the estimate the administrator shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall monthly transmit to the county treasurers and city treasurers their proportionate share of the interest derived from investment of the Local Sales and Use Tax Trust Fund.
1. This subchapter is intended to supplement all constitutional provisions and other acts adopted for the acquiring, constructing, and equipping of capital improvements of a public nature and the issuance of bonds for the financing of capital improvements of a public nature.
2. When applicable, in accordance with the provisions of this subchapter, this subchapter may be used by any city as an alternative, notwithstanding and without the necessity of compliance with any constitutional provision or any other act authorizing the city, or any commission or agency of the city, to issue bonds, for the purpose of financing the acquisition, construction, and equipment of capital improvements of a public nature.
3. 1. This subchapter is intended to supplement and be levying authority for all Arkansas municipalities in addition to all other statutes authorizing municipal sales and use taxes.
  2. Collections of a tax levied by this subchapter may be used to secure the payment of bonds or for any purpose for which the municipality's general fund may be used or for a combination thereof.
1. A city levying the tax permitted in this subchapter in addition to the authority existing under the laws of this state is authorized to acquire, construct, equip, reconstruct, extend, and improve capital improvements of a public nature, collectively referred to as a “project”, within or near such city and is authorized to issue bonds to provide funds for accomplishing projects and to pledge all or any part of the revenues from the tax levied by such city pursuant to this subchapter to pay lease rentals or the principal of, interest on, and fees and expenses in connection with such bonds.
2. Bonds issued by a city pursuant to this subchapter shall be authorized by ordinance of the governing body. The bonds may:
  1. Be coupon bonds payable to bearer or may be registered as to principal or as to principal and interest;
  2. Be exchangeable for bonds of another denomination;
  3. Be in such form and denominations;
  4. Be made payable at such places within or without the state;
  5. Be issued in one (1) or more series;
  6. Bear such date or dates;
  7. Mature at such time or times, not exceeding forty (40) years from their respective dates;
  8. Bear interest at such rate or rates;
  9. Be payable in such medium of payment;
  10. Be subject to such terms of redemption; and
  11. Contain such other terms, covenants, and conditions, as the ordinance authorizing their issuance may provide including, without limitation, those pertaining to:
    1. The custody, investment, and application of the proceeds of the bonds;
    2. The collection and disposition of revenues;
    3. The maintenance of various funds and reserves;
    4. The nature and extent of the security and pledging of revenues;
    5. The rights, duties, and obligations of the city and the trustee for the holders and registered owners of the bonds; and
    6. The rights of the holders and registered owners of the bonds.
3. There may be successive bond issues for the purpose of financing the same project, and there may be successive bond issues for financing the cost of reconstructing, replacing, constructing additions to, extending, improving, and equipping projects already in existence, whether or not originally financed by bonds issued under this subchapter, and with each successive issue to be authorized as provided by this subchapter. Priority between and among issues and successive issues as to security of the pledge of revenues and lien on the project facilities involved may be controlled by the ordinance authorizing the issuance of bonds under this subchapter. Subject to the provisions of this subchapter pertaining to registration, the bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas. A copy of the ordinance authorizing bonds under this subchapter, certified by the clerk or recorder of the city, shall be filed with the Secretary of the Department of Finance and Administration and with the Treasurer of State.
4. The bonds shall be executed by the mayor of the city and attested by the clerk or recorder of the city, by their manual or facsimile signatures. Coupons attached to the bonds shall be executed by the facsimile signature of the mayor. In case any of the officers whose signatures appear on the bonds or coupons cease to be such officers before delivery of the bonds or coupons, their signatures shall nevertheless be valid and sufficient for all purposes. The bonds shall be sealed with the seal of the city issuing the bonds.
5. The bonds shall not be general obligations of the city involved but shall be special obligations secured and payable as provided in this subchapter. In no event shall the bonds constitute an indebtedness of the city within the meaning of any constitutional or statutory limitation. The principal of, and interest on, all bonds issued under the authority of this subchapter shall be secured by a pledge of, and shall be payable from, all or any part of the revenues derived from the tax levied by the city pursuant to this subchapter or from all or any part of the revenues derived from the operation of the project involved, if and to the extent permitted by other laws of the State of Arkansas authorizing the issuance of revenue bonds secured by the revenues of such facilities. The ordinance authorizing the issuance of bonds together with this subchapter shall constitute a contract by and between the city and the holders and registered owners of the bonds issued by the city under the authority of this subchapter, which contract, and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the contract and all rights of the holders and registered owners of the bonds and the obligations of the city may be enforced by mandamus or by any other appropriate proceeding at law or in equity. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter.
6. The ordinance authorizing the bonds may provide for the execution by the city with a bank or trust company, within or without the State of Arkansas, of a trust indenture. The trust indenture may control the priority between and among successive issues and series, and may contain any other terms, covenants, and conditions that are deemed desirable by the governing body including, without limitation, those pertaining to:
  1. The custody, investment, and application of the proceeds of bonds;
  2. The collection and disposition of revenues;
  3. The maintenance of various funds and reserves;
  4. The nature and extent of the security;
  5. The rights, duties, and obligations of the city and the trustee for the holders and registered owners of the bonds; and
  6. The rights of the holders and registered owners of the bonds.
7. Bonds issued under the authority of this subchapter may be sold at public or private sale. If sold at public sale, the bonds shall be sold on sealed bids, and notice of the sale shall be published one (1) time in a newspaper having a general circulation throughout the State of Arkansas, at least ten (10) days prior to the date of the sale. In either case, the bonds may be sold at such price as the city may accept, including sale at a discount.
8. Bonds issued under the authority of this subchapter are made securities in which insurance companies, trust companies, banks, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds including capital in their control or belonging to them. Such bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is authorized by law. Any municipality or county, or any board, commission, or other authority duly established by any such municipality or county, or the boards of trustees, respectively, of any retirement fund or retirement system created by or pursuant to authority conferred by the General Assembly in its discretion may invest any of its funds not immediately needed for its purposes in bonds issued under the authority of this subchapter, and bonds issued under the authority of this subchapter shall be eligible to secure the deposit of public funds.
9. The principal of and interest on bonds issued under the authority of this subchapter shall be exempt from all state, county, school district, community college district, and municipal taxes. This exemption shall include income, property, inheritance, and estate taxes.
10. Revenue bonds may be issued under this subchapter for the purpose of refunding any obligations issued under this subchapter or under the authority of any other law for the purpose of providing all or part of the funds for the construction, reconstruction, extension, equipment, acquisition, or improvement of any capital improvements of a public nature. These refunding bonds may be combined with bonds issued under the provisions of this section into a single issue. When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be either applied to the payment of the obligations refunded or deposited in escrow for the retirement thereof. The ordinance under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby. These refunding bonds shall be issued and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of these bonds.
1. 1. The governing body of any city may adopt an ordinance levying a local sales or gross receipts and use tax in the amount of one-eighth of one percent (0.125%), one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), one percent (1%), or any combination of these amounts for the benefit of the city in accordance with the provisions of this subchapter.
  2. Each local sales or gross receipts and use tax authorized under this subchapter shall be adopted by ordinance or by petition as described in subsection (b) of this section and with the approval of the voters of the municipality in accordance with this subchapter.
2. 1. A legal voter of a city may file a petition with the governing body of that city requesting a special election on the question of levying a local sales or gross receipts and use tax authorized under this subchapter in an amount as provided in subdivision (a)(1) of this section.
  2. The petition shall be signed by a number of the legal voters in the city that is no less than fifteen percent (15%) of the number of votes cast for the office of city clerk at the last preceding general election.
1. 1. On the date of the filing of a petition described in § 26-75-307(b) or on the date of adoption of an ordinance levying a local sales and use tax for the benefit of the city, or within thirty (30) days following the filing of the petition described in § 26-75-307(b) or adoption of the ordinance, the city by ordinance shall provide for the calling and holding of a special election on the question in accordance with § 7-11-201 et seq.
  2. The special election shall be called for a date no later than one hundred twenty (120) days from the date of action of the governing body in establishing the date of special election.
  3. The governing body of the city shall notify the county board of election commissioners that the question has been referred to the vote of the people and shall submit a copy of the ballot title to the county board of election commissioners.
2. 1. The ballot title to be used at the election shall be substantially in the following form:
  2. The election shall be conducted in the manner provided by law for all other municipal elections unless otherwise specified in this subchapter.
3. 1. The ballot title may also include an expiration date, and if adopted in this form, the tax shall cease to be levied on the date noted on the ballot.
  2. The expiration date shall be the last day of a calendar quarter unless the proceeds are pledged for the payment of bonds, in which case the tax shall terminate as otherwise provided by law.
  3. 1. 1. The governing body of a city may refer to the voters a change in the expiration date for the sales and use tax approved by the voters to extend the levy of the sales and use tax beyond the expiration date previously approved.
      2. The proposed expiration date shall be the last day of the last month of a calendar quarter.
    2. If the governing body of a city refers a change in the expiration date for an existing sales and use tax levied under this subchapter to the voters, the governing body shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the expiration date for a sales and use tax levied under this subchapter shall be conducted in the manner provided by law for all other municipal elections.
      2. The results of the election under this subsection shall be certified, proclaimed, and subject to challenge under § 26-75-309.
    4. 1. To extend the sales and use tax levied under this subchapter to a new expiration date, the city shall notify the Secretary of the Department of Finance and Administration of the new expiration date that was approved by the voters after publication of the proclamation has occurred and at least ninety (90) days before the current expiration date of the sales and use tax.
      2. The sales and use tax extended under this subdivision (c)(3) shall continue to be levied until the new expiration date.
    5. If the voters do not approve a change in the expiration date for the sales and use tax levied under this subchapter, the sales and use tax shall continue to be collected until the expiration date previously approved by the voters.
    6. An election to change the expiration date for a sales and use tax levied under this subchapter is not an election on the levy of the sales and use tax.
4. 1. The ballot may indicate an effective date for the ordinance or petition or an effective date for the levy of the tax that is effective later than the effective date of the ordinance or petition under § 26-75-309(1)(D)(ii).
  2. The effective date of the ordinance or petition or the effective date of the levy of the tax delayed under subdivision (d)(1) of this section shall be:
    1. Stated in the ordinance or petition levying the tax and on the ballot; and
    2. Scheduled on the first day of the first month of a calendar quarter.
  3. The effective date of an ordinance or petition or a levy of the tax delayed under subdivision (d)(1) of this section shall not be delayed for more than thirty-six (36) months after the date the ordinance or petition would be effective under § 26-75-309(1)(D)(ii).
5. 1. 1. The ballot may also indicate designated uses of the revenues derived from the sales or use tax.
    2. If the tax is approved, the proceeds shall only be used for the designated purposes.
  2. The proceeds may be used for other designated purposes if the electors approve a change in the designated use of the revenues by vote under this subsection.
  3. 1. The governing body of a city may refer to the voters a change in the designated use of revenues derived from a sales or use tax that was approved by the voters.
    2. If the governing body of a city refers a change in the designated use of revenues derived from a sales or use tax to the voters, the governing body shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the designated use of revenues derived from a sales or use tax shall be conducted in the manner provided by law for all other municipal elections.
      2. The results of an election under this subsection shall be certified, proclaimed, and subject to challenge under the procedures stated in § 26-75-309.
  4. If the voters approve a change in the designated use of revenues derived from a sales or use tax, the change in the designated use shall apply to all revenues collected on the first day of the calendar month following the expiration of the thirty-day challenge period under § 26-75-309.
  5. 1. If the voters do not approve a change in the designated use of revenues derived from a sales or use tax, the tax shall continue to be collected, and the revenues derived from the tax shall continue to be used for the purposes indicated in the ballot for the tax.
    2. An election to change the designated use of revenues derived from a sales or use tax shall not constitute an election on the levy of the tax.
  6. Any city that has levied a local sales and use tax under this subchapter with a portion of the revenues derived from the tax pledged to secure lease rentals or bonds may not change the tax to reduce the pledge in favor of the lease or bonds.
1. 1. In any city in which a local sales and use tax has been adopted in the manner provided for in this subchapter and all or any portion pledged to secure the payment of lease rentals or bonds as authorized by this subchapter, that portion of the tax pledged to lease rentals or bonds shall not be abolished so long as the lease is effective or any of the bonds are outstanding.
  2. The bonds shall not be deemed outstanding to the extent that there are sufficient tax collections set aside to pay the bonds when due.
2. The city may abolish all or that portion of the sales and use tax that is not pledged to lease rentals during which the lease is effective or to outstanding bonds:
  1. By a roll call vote of two-thirds (2/3) of all members elected to the governing body of the city, excluding the mayor, if the governing body of the city has determined that the purposes of the tax cannot be fulfilled or cannot continue to be fulfilled; or
  2. After an election called by:
    1. Action of the city's governing body; or
    2. A petition of the qualified voters in the city.
3. The initiative procedures in Arkansas Constitution, Article 5, § 1, and any ordinances of the city's governing initiative procedures shall govern the petition of the qualified voters under subsection (b) of this section and the calling and holding of an election concerning the abolishment of the tax.
4. The governing body of the city may call for an election under subsection (b) of this section according to the procedures set forth in this subchapter for the calling of the initial election on the question.
5. 1. The ballot title for use in the election under subsection (b) of this section shall be substantially the same as indicated in § 26-75-308(b), except that the word “ABOLITION” shall be substituted for the word “ADOPTION” as it appears in the ballot title set forth in § 26-75-308(b).
  2. A ballot title that contains a question for qualified voters on whether to continue the levy of a local sales and use tax complies with this subsection.
6. The effective dates of any affirmative vote by the qualified voters to abolish the tax under subsection (b) of this section shall correspond to the dates indicated in § 26-75-309 for the initial effective date of the tax.
7. 1. The effective date of any affirmative vote by the governing body of the city to abolish the tax under subsection (b) of this section shall be on the first day of the calendar quarter after the expiration of ninety (90) days from the date a written statement signed by the chief executive officer of the city abolishing the tax is filed with the Secretary of the Department of Finance and Administration certifying that the governing body of the city has adopted an ordinance abolishing the tax.
  2. A copy of the ordinance shall be attached to the certificate.
1. 1. As soon as is practicable, and no later than ten (10) days following each of the events set forth in the ordinance with reference to the procedure for the adoption or abolition of such tax and the effective dates of such action, the city clerk of the city shall notify the Secretary of the Department of Finance and Administration of such event.
  2. Accompanying the first of any such notices, the city clerk shall send to the secretary a map of the city clearly showing the boundaries of the city.
2. 1. If any such city in which a local sales and use tax has been imposed in the manner provided for in this subchapter shall thereafter change or alter its boundaries, the city clerk of the city shall forward to the secretary at least ninety (90) days before the effective date a certified copy of the ordinance adding or detaching territory from the city, which shall be accompanied by a map clearly showing the territory added or detached.
  2. After receipt of the ordinance and the map, the tax imposed under this subchapter shall be effective in the added territory or abolished in the detached territory on the first day of the first month of the calendar quarter following the expiration of thirty (30) days from the date that the annexation or detachment becomes effective or after a minimum of sixty (60) days' notice by the secretary to sellers, whichever expires last.
1. 1. In each city in which a local sales and use tax has been imposed in the manner provided by this subchapter, every retailer shall add the tax imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and the tax imposed by this subchapter to his or her sale price, and when added, the combined tax shall:
    1. Constitute a part of the price;
    2. Be a debt of the purchaser to the retailer until paid; and
    3. Be recoverable at law in the same manner as the purchase price.
  2. When the sale price in the city shall involve a fraction of a dollar, the two (2) combined taxes shall be added to the sale price.
  3. A retailer shall be entitled to the same discount with respect to tax remitted under this subchapter as is authorized for the collection and remission of gross receipts taxes to the State of Arkansas in § 26-52-503.
2. 1. Any fraction of one cent (1¢) of tax that is less than one-half of one cent (½¢) shall not be collected.
  2. Any fraction of one cent (1¢) of tax equal to one-half of one cent (½¢) or more shall be collected as a whole one cent (1¢) of tax.
3. In the event the General Assembly or the electors of the state shall either increase or decrease the rate of the state gross receipts tax, the combined rate of state tax and the local sales tax shall be the sum of the two (2) rates.
4. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on the vendor's sales and use tax report.
  2. 1. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
    2. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. This subsection applies only to taxes collected by the Secretary of the Department of Finance and Administration.
1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this subchapter and other subchapters authorizing city sales taxes in each city and shall deposit all such revenues with the Treasurer of State.
2. Any moneys collected by the secretary which as indicated by a certified copy of an ordinance of the city previously filed with the secretary and the Treasurer of State, are pledged to secure the payment of lease rentals or bonds authorized by this subchapter shall not be deposited into the State Treasury but shall be deposited by the Treasurer of State into banks designated by the city as cash funds and transmitted to the city subject to the charges payable to the State of Arkansas set forth in § 26-75-217.
1. In every city in which the local sales and use tax has been adopted pursuant to the provisions of this subchapter, there is imposed an excise tax on the storage, use, distribution, or other consumption within the city of tangible personal property and taxable services purchased, leased, or rented from any retailer outside the state after the effective date of the sales and use tax for storage, use, distribution, or other consumption in the city at a rate of one-half of one percent (½%) or at the rate of one percent (1%) of the sale price of the property and services, or in the case of leases or rentals of the lease or rental price, the rate of the use tax to correspond to the rate of the sales tax portion of the tax.
2. The use tax portion of the local sales and use tax shall be collected according to the terms, procedures, and rules of the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., except as otherwise provided.
3. The tax imposed under this subchapter and the tax imposed under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., shall be collected together and reported upon such forms and under such administrative rules as may be prescribed by the Secretary of the Department of Finance and Administration not inconsistent with the provisions of this subchapter.
4. On and after the effective date of any proposition to abolish such local sales and use tax in any city, the secretary shall comply with the proposition as provided in this subchapter.
1. All city taxes adopted pursuant to this subchapter, § 26-75-501 et seq., or the Advertising and Promotion Commission Act, § 26-75-601 et seq., which are in effect on December 1, 1981, shall remain in full force and effect and are not repealed by the provisions of § 26-75-201 et seq., except as to the administration, collection, enforcement, and operation of the tax as specifically set out in § 26-75-201 et seq.
2. It is recognized by the General Assembly that several municipalities such as North Little Rock, Siloam Springs, Mountain Home, Conway, Caddo Valley, and others have enacted a sales and use tax pursuant to this subchapter. It is the intent of the General Assembly to affirm the validity of sales and use taxes adopted and enacted by those municipalities. It is provided further that for city sales and use taxes adopted pursuant to these statutes, the procedures for repeal and enforcement as set out in § 26-75-201 et seq., shall be applicable to any such tax adopted by any city pursuant to them.
1. 1. There is created a trust fund for the remittance of local sales and use taxes which shall be known as the “Local Sales and Use Tax Trust Fund”.
  2. 1. There is also created a trust fund which shall be known as the “Identification Pending Trust Fund for Local Sales and Use Taxes”.
    2. 1. Money reported as local sales and use taxes which was collected in local taxing jurisdictions which are not immediately identifiable and money collected in local jurisdictions which have no tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. When a local tax jurisdiction is identified for money which has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
      3. When the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
    3. 1. Money reported as local sales and use taxes which was collected by an out-of-state vendor and which is not identifiable shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes. Any such funds so deposited shall not be included for computation of transfer to general revenue in subdivision (a)(2)(B) of this section.
      2. The Treasurer of State shall distribute unidentified local sales and use taxes collected by out-of-state vendors to the county treasurers and city treasurers as determined by their proportionate share of distribution from the Local Sales and Use Tax Trust Fund on a monthly basis.
2. 1. The Treasurer of State as the administrator of the Local Sales and Use Tax Trust Fund shall review the flow of moneys through the Local Sales and Use Tax Trust Fund into the State Treasury for the purpose of estimating the amount of the moneys as may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. After making the estimate, the administrator shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the State of Arkansas. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall monthly transmit to the county treasurers and city treasurers their proportionate share of the interest derived from investment of the Local Sales and Use Tax Trust Fund.
1. 1. Any municipal general sales or use tax levied pursuant to this subchapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
  2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of a:
    1. Motor vehicle;
    2. Aircraft;
    3. Watercraft;
    4. Modular home;
    5. Manufactured home; or
    6. Mobile home.
2. 1. Each vendor who is liable for one (1) or more municipal sales or use taxes shall report a combined city sales tax and a combined city use tax on his or her sales and use tax report.
  2. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
3. This section only applies to a tax collected by the Secretary of the Department of Finance and Administration.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing any local tax imposed pursuant to this subchapter shall be the same as for the gross receipts tax and compensating tax, as set out in the Arkansas Tax Procedure Act, § 26-18-101 et seq., except as specifically set out in this subchapter.
2. 1. When property is seized by the secretary under the provisions of any law authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any tax imposed by this subchapter, the secretary shall sell sufficient property to pay the delinquent taxes and penalty due to any city under this subchapter in addition to that required to pay any amount due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds from the sale shall first be applied to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the city.
1. The provisions of §§ 26-74-220, 26-75-207 — 26-75-212, and 26-75-222 shall be applicable to any tax levied under this subchapter.
2. Section 26-75-213 shall be applicable to the resubmission of the question of the levy or repeal of the local sales and use tax authorized by this subchapter.
1. 1. The governing body of any city of the first class, city of the second class, or incorporated town in the state by ordinance may levy a temporary local sales and use tax of either one percent (1%) or one-half of one percent (½%) for the purpose of providing funds for the acquisition, construction, or improvement of parks and recreation facilities within the city or town.
  2. Such a tax may be levied for any period not to exceed two (2) years.
2. The ordinance levying the tax shall state the period for which the tax shall be levied and collected and shall contain a description of parks and recreation facilities to be acquired, constructed, or improved with the revenues from the tax.
3. Any tax levied pursuant to the authority granted in this section shall be effective only after approval of the tax by the qualified electors of such city or town in the manner provided in this subchapter.
1. 1. When the governing body of any city or town adopts an ordinance levying a local sales and use tax as authorized in this subchapter, the governing body either in the ordinance levying the tax or in a separate ordinance shall provide for submission of the question of the levy to the qualified electors of the city or town either at the next regular municipal election or at a special election.
  2. If the ordinance provides for submitting the question at a special election, the election shall be called in accordance with § 7-11-201 et seq. for a date not more than ninety (90) days from the date of the adoption of the ordinance calling the special election.
2. The governing body of the city or town shall notify the county board of election commissioners that the question of the levy of the tax has been referred to a vote of the people at the next regular municipal election or at a special election to be held on the date set by ordinance and shall submit a copy of the ballot title to the county board of election commissioners.
3. The ballot title to be used at the election shall be in substantially the following form:
4. 1. Following the election, the mayor of the city or town shall issue a proclamation of the results of the election, and the proclamation shall be published one (1) time in a newspaper having general circulation in the city or town.
  2. 1. If a majority of the electors voting on the issue vote against the levy of the tax, the tax shall not be levied, and the question of the levy of a tax under this subchapter shall not again be submitted to the electors of the city or town for one (1) year.
    2. If a majority of the electors voting on the issue vote for the levy of the tax, the tax shall be levied and collected as provided for in this subchapter for the period prescribed in the ordinance.
  3. 1. A person desiring to challenge the results of the election shall file the challenge in the circuit court of the county where the city or town is located within thirty (30) days of the date of publication of the proclamation.
    2. 1. The mayor of the city or town shall notify the Secretary of the Department of Finance and Administration of the rate change after publication of the proclamation has occurred and ninety (90) days before the effective date of the tax.
        
        If no election challenge is filed within the thirty-day challenge period, the ordinance shall become effective on the first day of the first month of the calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers and after the expiration of the thirty-day period for challenge of the results of the election.
        
        In the case of a purchase made from a printed catalog in which the purchaser computed the tax based upon local tax rates published in the catalog, the applicable date will be the first day of the quarter after a minimum of one hundred twenty (120) days' notice by the secretary to sellers.
      2. In the event of an election contest, the tax shall be collected as prescribed in subdivision (d)(3)(B)(i) of this section.
5. 1. If a majority of electors voting on the issue vote “FOR” the levy of the tax, a copy of the mayor's proclamation of the results of the election shall be transmitted to the secretary within ten (10) days after the election.
  2. 1. At the time of transmitting the proclamation, the clerk shall also send to the secretary a map of the city or town clearly showing the boundaries of the city or town.
    2. 1. If any such city or town shall thereafter change or alter its boundaries, the city or town clerk shall forward to the secretary ninety (90) days before the effective date of the boundary changes a certified copy of the ordinance adding or detaching territory from the city or town, and the ordinance shall be accompanied by a map clearly showing the territory added or detached.
      2. After receipt of the ordinance and map, the tax imposed under this subchapter shall be effective in the added territory or abolished in the detached territory on the first day of the first month of the calendar quarter following the expiration of thirty (30) days from the date that the annexation or detachment becomes effective or after a minimum of sixty (60) days' notice by the secretary to sellers, whichever expires last.
1. When any city or town levies a sales and use tax pursuant to the authority granted in this subchapter, the tax shall be levied upon the same sales and the same items and services as are subject to taxation under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. The local sales and use tax authorized by this subchapter will apply in the same manner as set out in § 26-75-216 as § 26-75-216 modifies the levy and collection of the tax.
1. 1. In each city or town in which a local sales and use tax has been imposed in the manner provided by this subchapter, every retailer shall add the tax imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and this subchapter to the retailer's sale price.
  2. When added, the combined tax shall:
    1. Constitute a part of the price;
    2. Be a debt of the purchaser to the retailer until paid; and
    3. Be recoverable at law in the same manner as the purchase price.
2. 1. Retailers shall collect and remit the tax levied by any city or town pursuant to this subchapter in the same manner and at the same time as the state gross receipts tax or compensating tax is collected and remitted.
  2. The tax levied in this section on motor vehicles shall be collected by the Secretary of the Department of Finance and Administration directly from the purchaser in the same manner as the state gross receipts tax.
3. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on the vendor's sales and use tax report.
  2. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  4. This provision applies only to taxes collected by the secretary.
1. The Secretary of the Department of Finance and Administration shall deposit all local sales and use taxes collected under this subchapter with the Treasurer of State.
2. All deposits and transfers shall be made in the same manner and subject to the same charges and retainage as set forth in § 26-74-214.
1. All revenues received by a city or town from taxes levied pursuant to the authority granted in this subchapter shall be deposited into the city or town treasury and credited to a special account and shall be used for the acquisition, construction, or improvement of parks and recreational facilities within the municipality as prescribed in the levying ordinance.
2. Any balance remaining in the special account described in subsection (a) of this section after the projects prescribed in the levying ordinance have been completed and paid for shall be used for maintenance and upkeep of municipal parks and recreational facilities.
1. 1. On and after the effective date of any tax imposed pursuant to the provisions of this subchapter, the Secretary of the Department of Finance and Administration shall perform all functions incidental to the administration, collection, enforcement, and operation of the tax.
  2. The secretary shall collect taxes levied pursuant to this subchapter at the same time and in the same manner as the secretary collects the state gross receipts tax and the state compensating tax.
2. When notified that any tax levied under this subchapter has expired or has been abolished, the secretary shall cease to collect the tax as provided in this subchapter.
1. Any city of the first class or city of the second class having a population of not more than forty thousand (40,000) persons according to the most recent federal census and that has been or may in the future be designated as a model city under the Demonstration Cities and Metropolitan Development Act of 1966, 42 U.S.C. § 3301 et seq., by an ordinance passed by its governing body, may levy a tax for the benefit of the city of not to exceed one percent (1%) on gross proceeds or gross receipts derived from sales, as such sales and gross proceeds or gross receipts are defined in the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. Rules promulgated by the Secretary of the Department of Finance and Administration for the State of Arkansas in connection with the collection and administration of the state gross receipts tax shall be equally applicable with respect to any tax levied under this subchapter.
3. The ordinance authorizing the levy of the tax shall set the rate of the tax within the limits authorized in this subchapter.
4. The operation of any ordinance levying the tax shall be subject to approval of the voters as required in § 26-75-503.
5. After initial adoption of the tax as provided in this subchapter, that tax rate may be increased by the city under the same procedure but not to exceed the maximum prescribed in this subchapter.
1. An ordinance of a city of the first class or city of the second class as provided in § 26-75-502 shall not become operative until approved in an election in the city levying such a tax.
2. An election shall be held in the levying city on the question of whether the ordinance shall become effective within sixty (60) days after the receipt of a certified copy of the ordinance and shall be conducted in the manner prescribed by law for holding state, county, or municipal elections, so far as the manner may be applicable.
3. A majority vote of those voting in the election shall determine whether the ordinance shall be operative.
4. 1. If the majority vote “FOR” the ordinance, it shall be deemed to be operative on the date that the governing body of the city makes its official canvass of the election returns.
  2. However, no such tax shall be collected under any such ordinance until the first day of a calendar quarter after a minimum of sixty (60) days' notice by the Secretary of the Department of Finance and Administration to sellers.
  3. For a purchase made from a printed catalog in which the purchaser computed the tax based upon local tax rates published in the catalog, the tax shall be collected on the first day of the quarter after a minimum of one hundred twenty (120) days' notice by the secretary to sellers.
5. Prior to the election the ordinance shall be published one (1) time a week for at least three (3) weeks in at least one (1) newspaper published in the city in which the election is to be held.
6. If a city shall hold an election as provided in this section and if the ordinance shall be rejected, no other election on the ordinance shall be held by the city for a period of one (1) year from the date of holding the prior election.
1. The Secretary of the Department of Finance and Administration shall collect the tax levied under this subchapter concurrently with and in the same manner as taxes collected under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. This additional tax shall be collected by the secretary for the benefit of the city and shall be deposited into the Local Sales and Use Tax Trust Fund for distribution back to the city.
1. All revenues collected by the Secretary of the Department of Finance and Administration pursuant to the provisions of this subchapter, less three percent (3%) thereof which shall be deducted as a cost of collection and deposited into the State Treasury to the credit of the Constitutional Officers Fund and the State Central Services Fund, shall be remitted by the secretary to the levying city at the same time the secretary remits sales tax revenues to the State Treasury.
2. All funds remitted to the levying city under the provisions of this subchapter shall be deposited into the city general fund of the levying city and used for the purposes prescribed by law.
3. 1. Except for revenue collected under subdivision (c)(2) of this section, money collected from a tax on aviation fuel levied by a city where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport located within the levying city or within the county and transmitted to the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this subsection.
4. Except for revenue collected under subsection (c) of this section, money collected that is derived from a tax on aviation fuel levied by a city that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the city and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. In all cities of the first class or cities of the second class that have adopted an ordinance prior to January 1, 1995, levying a local sales tax as provided in § 26-75-502, there is also levied a local compensating use tax.
2. The rate of the use tax levied by this section shall be equal to the rate of the sales tax levied by the city.
3. The use tax levied under this section and the local sales tax levied under § 26-75-502 shall be administered and enforced in accordance with the provisions of §§ 26-75-223 and 26-75-312.
1. Any city of the first class, city of the second class, or incorporated town by ordinance of the governing body thereof may levy a tax not to exceed three percent (3%) upon the gross receipts or gross proceeds identified in subsection (c) of this section.
2. Any city of the first class in which is located a city park of one thousand (1,000) acres or more in a like manner may levy an additional tax of one percent (1%) upon the gross receipts or gross proceeds identified in subsection (c) of this section. Revenues collected from this additional tax shall be used by the city parks and recreation department for the promotion and development of city parks and recreation areas.
3. The tax authorized in this subchapter shall be upon any one (1) or more of the following, as specified in the levying ordinance:
  1. The gross receipts or gross proceeds from renting, leasing, or otherwise furnishing hotel, motel, house, cabin, bed and breakfast, campground, condominium, or other similar rental accommodations for sleeping, meeting, or party room facilities for profit in such city or town, but such accommodations shall not include the rental or lease of such accommodations for periods of thirty (30) days or more;
  2. The portion of the gross receipts or gross proceeds received by restaurants, cafes, cafeterias, delicatessens, drive-in restaurants, carry-out restaurants, concession stands, convenience stores, grocery store-restaurants, or similar businesses as shall be defined in the levying ordinance from the sale of prepared food and beverages for on-premises or off-premises consumption, but such tax shall not apply to such gross receipts or gross proceeds of organizations qualified under 26 U.S.C. § 501(c)(3); and
  3. The admission price to a state park located within the municipal boundary of the city or town.
1. From the effective date of the levying ordinance, the tax so levied shall be paid by the persons, firms, and corporations liable therefor and shall be collected by the advertising and promotion commission of the levying city or by a designated agent of the commission in the same manner and at the same time as the tax levied by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
2. 1. The person paying the tax shall report and remit it upon forms provided by the commission and as directed by the commission. The rules, forms of notice, assessment procedures, and the enforcement and collection of the tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Tax Procedure Act, § 26-18-101 et seq., so far as practicable shall be applicable with respect to the enforcement and collection of the tax levied pursuant to the authority of this subchapter.
  2. However, the administration and enforcement and all actions shall be by and in the name of the commission through the proper commission officials or agents. The commission shall have the authority to sue and be sued in its name.
  3. The Department of Finance and Administration shall have no authority to enforce or collect the tax levied pursuant to this subchapter.
3. The levying city is authorized to adopt ordinances consistent with and in similar form to the Arkansas Tax Procedure Act, § 26-18-101 et seq., to enable the commission or its agent to enforce the tax through examination of records, notices of proposed and final assessment, and administrative hearings on proposed assessments. The levying city is also authorized to adopt ordinances which enable the commission to:
  1. Assess penalties and interest against taxpayers who fail to timely report or pay the tax. The penalty is equal to five percent (5%) of the unpaid tax amount per month not to exceed a total assessment of thirty-five percent (35%) of the unpaid tax. Simple interest on unpaid taxes shall be assessed at the rate of ten percent (10%) per annum;
  2. Assess unpaid or unreported tax within three (3) years of the date the tax is due;
  3. Provide for judicial relief from proposed assessments in accordance with subsection (d) of this section; and
  4. Issue certificates of indebtedness in accordance with subdivision (c)(3) of this section.
4. 1. Within thirty (30) days of the issuance of the notice and demand for payment of a deficiency in tax established by a final determination of the hearing officer, a taxpayer may seek judicial relief from the final determination by either:
    1. Paying under protest the amount of the deficiency, plus penalty and interest determined by the commission to be due, and filing a suit to recover that amount within one (1) year from the date of payment under protest; or
    2. 1. Filing with the commission a bond in double the amount of the tax deficiency due and by filing suit within thirty (30) days thereafter to stay the effect of the commission's determination.
      2. The bond shall be subject to the condition that the taxpayer shall file suit within thirty (30) days after filing the bond, shall faithfully and diligently prosecute the suit to a final determination, and shall pay any deficiency found by the court to be due and any court costs assessed against the taxpayer.
      3. A taxpayer's failure to file suit, diligently prosecute the suit, or pay any tax deficiency and court costs, as required by this subsection, shall result in the forfeiture of the bond in the amount of the assessment and assessed court costs.
  2. The method provided in this section is the exclusive method for seeking relief from a written decision of the commission establishing a deficiency in tax. No injunction shall issue to stay proceedings for assessment or collection of this tax.
5. 1. If a taxpayer does not timely and properly pursue the taxpayer's remedies seeking relief from a decision of the commission and a final assessment is made against the taxpayer, or if the taxpayer fails to pay the deficiency assessed upon notice and demand, then the commission as soon as practicable thereafter shall issue to the circuit clerk of the county where the taxpayer's business is located a certificate of indebtedness certifying that the person named therein is indebted to the commission for the amount of the tax established by the commission as due.
  2. The circuit clerk shall enter immediately upon the circuit court judgment docket:
    1. The name of the delinquent taxpayer;
    2. The amount certified as being due;
    3. The name of the tax; and
    4. The date of entry upon the judgment docket.
  3. The entry of the certificate of indebtedness shall have the same force and effect as the entry of a judgment rendered by the circuit court. This entry shall constitute the commission's lien upon the title of any real and personal property of the taxpayer in the county where the certificate of indebtedness is recorded.
  4. The certificate of indebtedness authorized by this subsection shall continue in force for ten (10) years from the date of recording and shall automatically expire after the ten-year period has run. Actions on the lien on the certificate of indebtedness shall be commenced within ten (10) years after the date of recording of the certificate, and not afterward.
  5. The commission shall have all remedies and may take all proceedings for the collection of the tax which may be taken for the recovery of a judgment at law.
6. The provisions of subsections (d) and (e) of this section shall be effective only when the levying city adopts an ordinance which specifically provides that these provisions shall be utilized by the commission in enforcing the tax.
1. All taxes, interest, penalties, and costs collected pursuant to a tax levied by the city as authorized in this subchapter shall be credited to the city advertising and promotion fund which shall be created by the ordinance levying the tax in the city.
2. When the electors of any city levy a gross receipts tax on hotels and restaurants, and the ballot dedicates the tax for the development, construction, and maintenance of city parks, the proceeds of the tax shall not be deposited into the city advertising and promotion fund but shall be deposited into a special fund to be used for the development, construction, and maintenance of city parks. The funds shall be disbursed by the mayor upon approval of the city council.
3. When the electors of any city levy a gross receipts tax as set forth in subsection (b) of this section, and when the electors of that city have pledged some or all of the proceeds thereof to the repayment of bonds as set forth in § 26-75-606(b)(1) and (2) or § 26-75-613(a)(2), the proceeds so pledged shall be deposited into the city advertising and promotion fund and distributed by the city advertising and promotion commission in accordance with the pledge and enactment of the electors.
1. Any municipality levying a tax pursuant to this subchapter shall create by ordinance a municipal advertising and promotion commission, to be composed of seven (7) members, as follows:
  1. 1. Four (4) members shall be owners or managers of businesses in the tourism industry, and the owner or manager shall reside in the levying municipality or, if the governing body of the municipality provides for by ordinance, the owner or manager may reside outside of the municipality but within the county where the municipality is located.
    2. At least three (3) of these members shall be owners or managers of hotels, motels, or restaurants and shall serve for staggered terms of four (4) years;
  2. Two (2) members of the commission shall be members of the governing body of the municipality and selected by the governing body and shall serve at the will of the governing body; and
  3. One (1) member shall be from the public at large who shall reside within the levying municipality or in the county of the levying municipality and shall serve for a term of four (4) years.
2. In the case of a city creating the commission authorized in this section after March 4, 1993, the initial members of the commission shall be selected as follows:
  1. The four (4) tourism industry positions provided for in subdivision (a)(1) of this section shall be filled by appointment made by the governing body of the city for staggered terms so that:
    1. One (1) member will serve for a term of one (1) year;
    2. One (1) for a term of two (2) years;
    3. One (1) for a term of three (3) years; and
    4. One (1) for a term of four (4) years.
  2. The at-large position provided for in subdivision (a)(3) of this section shall be filled by nomination by the chief administrator of the city and approval by the governing body of the city.
3. 1. In the case of a city in which a city advertising and promotion commission exists on March 4, 1993, the members of the commission shall continue in office for the balance of the terms to which they have been previously appointed.
  2. However, if on that date no commission member has been appointed to hold an at-large position, the mayor shall designate one (1) of the commission members who is also a member of the governing body of the city to fill the at-large position provided for in subdivision (a)(3) of this section for a term of not longer than one (1) year.
4. Whether resulting from expiration of a regular term or otherwise, a vacancy on the commission in any of the four (4) tourism industry positions provided for in subdivision (a)(1) of this section or in the at-large position provided for in subdivision (a)(3) of this section shall be filled by appointment made by the remaining members of the commission, with the approval of the governing body of the city.
1. 1. 1. In the manner as shall be determined by the municipal advertising and promotion commission, all funds credited to the city advertising and promotion fund pursuant to this subchapter shall be used for the:
      1. Advertising and promoting of the city and its environs;
      2. Construction, reconstruction, extension, equipment, improvement, maintenance, repair, and operation of a convention center;
      3. Operation of tourist promotion facilities in the city or the county where the city is located if the city owns an interest in the convention center or facility, and facilities necessary for, supporting, or otherwise pertaining to, a convention center; or
      4. Payment of the principal of, interest on, and fees and expenses in connection with bonds as provided in this subchapter.
    2. The commission may engage such personnel and agencies and incur such administrative costs as it deems necessary to conduct its business.
  2. 1. The commission is the body that determines the use of the city advertising and promotion fund.
    2. Pursuant to this section, if the commission determines that funding of the arts is necessary for or supporting of its city's advertising and promotion endeavors, the commission may use its funds derived from the hotel and restaurant tax.
  3. 1. The commission may purchase, own, operate, sell, lease, contract, or otherwise deal in or dispose of real property, buildings, improvements, or facilities of any nature in accordance with this subchapter.
    2. If the commission is dissolved, the city shall assume the authority under subdivision (a)(3)(A) of this section.
2. 1. 1. Any city of the first class that may levy and does levy a tax pursuant to this subchapter may use or pledge all or any part of the revenues derived from the tax for the purposes prescribed in this subchapter or for the operation of tourist-oriented facilities, including, but not limited to, theme parks and other family entertainment facilities or for the retirement of bonds issued for the establishment and operation of other tourist-oriented facilities, including, but not limited to, theme parks and other family entertainment facilities.
    2. These revenues shall be used or pledged for the purposes authorized in this subsection only upon approval of the commission created pursuant to this subchapter.
  2. Funds credited to the city advertising and promotion fund pursuant to this subchapter may be used, spent, or pledged by the commission, in addition to all other purposes prescribed in this subchapter, on and for the construction, reconstruction, repair, maintenance, improvement, equipping, and operation of public recreation facilities in the city or the county where the city is located if the city owns an interest in the center or facility, including, but not limited to, facilities constituting city parks and also for the payment of the principal of, interest on, and fees and expenses in connection with bonds as provided in this subchapter in the manner as shall be determined by the commission for the purpose of such payment.
3. 1. All local taxes levied as authorized in § 26-75-602(a) shall be credited to the city advertising and promotion fund and shall be used for the purposes described in subsections (a) and (b) of this section.
  2. The taxes shall not be used:
    1. For general capital improvements within the city or county;
    2. For the costs associated with the general operation of the city or county; or
    3. For general subsidy of any civic group or the chamber of commerce.
  3. However, the commission may contract with such groups to provide to the commission actual services that are connected with tourism events or conventions.
  4. The authorization and limitations contained in this subsection shall be reasonably construed so as to provide funds for promoting and encouraging tourism and conventions while not allowing such special revenues to be utilized for expenditures that are normally paid from general revenues of the city.
1. Bonds issued by a municipality pursuant to this subchapter shall be authorized by ordinance of the governing body of the city.
2. The bonds may:
  1. Be in registered or other form;
  2. Be exchangeable for bonds of another denomination;
  3. Be in such form and denominations;
  4. Be made payable at such places within or without the state;
  5. Be issued in one (1) or more series;
  6. Bear such date or dates;
  7. Mature at such time or times, not exceeding forty (40) years from their respective dates;
  8. Bear interest at such rate or rates;
  9. Be payable in such medium of payment;
  10. Be subject to such terms of redemption; and
  11. Contain such other terms, covenants, and conditions, as the ordinance authorizing their issuance may provide, including, without limitation, those pertaining to:
    1. The custody and application of the proceeds of the bonds;
    2. The collection and disposition of revenues;
    3. The maintenance and investment of various funds and reserves;
    4. The nature and extent of the security and pledging of revenues;
    5. The rights, duties, and obligations of the municipality and the trustee for the holders and registered owners of the bonds; and
    6. The rights of the holders and registered owners of the bonds.
3. There may be successive bond issues for the purpose of financing the same convention center project, and there may be successive bond issues for financing the cost of reconstructing, replacing, constructing additions to, extending, improving, and equipping convention center projects already in existence, whether or not originally financed by bonds issued under this subchapter and with each successive issue to be authorized as provided by this subchapter. Priority between and among issues and successive issues as to security of the pledge of revenues and lien on the convention center project facilities involved may be controlled by the ordinance authorizing the issuance of bonds under this subchapter. Subject to the provisions of this subchapter pertaining to registration, the bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas.
1. 1. The bonds shall not be general obligations of the city involved, but shall be special obligations secured and payable as provided in this subchapter.
  2. In no event shall the bonds constitute an indebtedness of the city within the meaning of any constitutional or statutory limitation.
2. The principal of and interest on all bonds issued under the authority of this subchapter shall be secured by a pledge of and shall be payable from all or any part of the revenues derived from the tax levied by the city pursuant to this subchapter or from all or any part of the revenues derived from the operation of the convention center project involved.
3. The ordinance authorizing the issuance of bonds together with this subchapter shall constitute a contract by and between the city and the holders and registered owners of all bonds issued by the city under the authority of this subchapter, which contract and all covenants, agreements, and obligations therein, shall be promptly performed in strict compliance with the terms and provisions of the contract.
4. The contract and all rights of the holders and registered owners of the bonds and the obligations of the city may be enforced by mandamus or any other appropriate proceeding at law or in equity.
5. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter.
1. Bonds issued under the authority of this subchapter are made securities in which insurance companies, trust companies, banks, investment companies, executors, administrators, trustees, and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them.
2. These bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of this state for any purpose for which the deposit of bonds or obligations of the state is authorized by law.
3. Any municipality or county, or any board, commission, or other authority established by any municipality or county, or the boards of trustees, respectively, of any retirement fund or retirement system created by or pursuant to authority conferred by the General Assembly in its discretion may invest any of its funds not immediately needed for its purposes in bonds issued under the authority of this subchapter.
4. Bonds issued under the authority of this subchapter shall be eligible to secure the deposit of public funds.
1. The principal of and interest on bonds issued under the authority of this subchapter shall be exempt from all state, county, and municipal taxes.
2. This exemption shall include income, inheritance, and estate taxes.
1. 1. Any city of the first class levying the tax and creating the commission as permitted in this subchapter is authorized to pledge all or any part of the revenues from the tax levied pursuant to this subchapter to the payment of principal of and interest on bonds issued by the city under the authority of any other law in effect, for the purpose of providing all, or part of, the funds for the acquisition, construction, reconstruction, extension, equipment, improvement, maintenance, or operation of any facility including, without limitation, auditoriums and parking facilities, which will be operated as a part of, or operated or utilized in connection with, or in support of, a convention center project.
  2. Any municipality that has levied a tax, known as the hotel and restaurant tax, as authorized in § 26-75-602(a), may pledge all or any part of the revenues derived from the hotel and restaurant tax to the payment of principal and interest on bonds issued by the municipality under the authority of §§ 14-170-201 — 14-170-214 or any subsequent law and called tourism revenue bonds, or to the extent necessary to match grant funds in an amount at least equal to the proceeds of the bonds to the payment of principal and interest on bonds issued by the municipality under the authority of §§ 14-186-101 and 14-186-301 — 14-186-312, or any subsequent law.
2. 1. The pledge of revenues derived from the hotel and restaurant tax shall be by the ordinance of the municipality authorizing the bonds, called the authorizing ordinance, and in the case of tourism revenue bonds shall be subject to the approval of the city advertising and promotion commission.
  2. The authorizing ordinance shall specify the nature and extent of the pledge of revenues derived from the hotel and restaurant tax and may contain such terms, covenants, and conditions pertaining to the collection, custody, and disposition of revenues derived from the hotel and restaurant tax as the governing body of the municipality deems desirable including, without limitation, a covenant that the hotel and restaurant tax will be collected so long as the bonds are outstanding.
  3. 1. The provisions of the authorizing ordinance relating to the hotel and restaurant tax and the revenues derived therefrom together with this subchapter shall constitute a contract by and between the municipality and the holders and registered owners of the bonds authorized thereby, which contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract.
    2. The contract and all rights of the holders and registered owners of the bonds and all obligations of the municipality may be enforced by mandamus or any other appropriate proceeding at law or in equity.
1. The ordinance authorizing the bonds may provide for the execution by the chief executive officer of the municipality of a trust indenture which defines the rights of the owners of the bonds and provides for the appointment of a trustee for the owners of the bonds.
2. The trust indenture may provide for the priority between and among successive issues and may contain any of the provisions set forth in § 26-75-608 and any other terms, covenants, and conditions that are deemed desirable.
1. Bonds may be issued under this subchapter to refund any outstanding bonds issued pursuant to this subchapter or to refund any outstanding bonds issued pursuant to any other law for the purpose of financing convention center projects.
2. 1. The refunding bonds may be either sold for cash or delivered in exchange for the outstanding obligations.
  2. If sold for cash, the proceeds may be either applied to the payment of the obligations refunded or deposited into irrevocable trust for the retirement thereof either at maturity or on an authorized redemption date.
3. Refunding bonds shall in all respects be authorized, issued, and secured in the manner provided in this subchapter.
4. The ordinance under which the refunding bonds are issued may provide that any refunding bonds shall have the same priority of lien on all project revenues as originally pledged for payment of the obligation refunded thereby.
1. As used in this section:
  1. “City” means a city of the first class, city of the second class, or incorporated town in this state;
  2. “Joint audit” means an audit that is performed by a joint auditor to examine the records of one (1) or more taxpayers and that is necessary to determine the accuracy of a return or to establish the liability of the taxpayer to pay the tax levied by an ordinance of a city under § 26-75-602;
  3. “Joint auditor” means a person with the necessary experience or training to assume the primary responsibility to conduct a joint audit according to an agreement between the cities;
  4. “Records” means:
    1. The books, records, papers, vouchers, accounts, documents, and relevant property or stock of merchandise of the taxpayer that are in the possession of the taxpayer or of a third party that concern the tax levied under § 26-75-602; or
    2. Tax information from the books and records of the Department of Finance and Administration concerning a taxpayer that is necessary to the performance of a joint audit of a taxpayer and is requested by a joint auditor; and
  5. “Taxpayer” means a person subject to or liable for the tax levied by an ordinance of a city under § 26-75-602.
2. 1. Two (2) or more cities that have levied a tax and have adopted an ordinance under the authority of § 26-75-603 may agree to a joint audit in order to reduce the expenditure of time and resources necessary to perform the audit.
  2. The ordinance shall enable the advertising and promotion commission of the levying city to enforce the tax through examination of records.
3. The cities that participate in the joint audit may enter into a joint agreement to employ a joint auditor and to provide any assistance required to the joint auditor in the performance of the joint audit.
4. At a reasonable time, the joint auditor shall be granted access to examine records permitted by a city ordinance under § 26-75-603 and this section.
1. Any city of the first class having a population of less than five thousand (5,000) inhabitants, a portion of which has been designated as a historic district and is included on the National Register of Historic Places, by ordinance of its governing body, may levy a tax not to exceed two percent (2%) upon the gross receipts or gross proceeds from any one (1) or more of the following:
  1. The renting, leasing, or otherwise furnishing of lodging for profit in the city;
  2. Restaurants, cafes, cafeterias, or other business establishments, as defined in the levying ordinance, engaged in the business of selling prepared food for consumption on the premises in the city;
  3. Sales by retail businesses, a majority of whose gross receipts or gross proceeds are derived from the sale of items available for sale to tourists, as defined in the levying ordinance; and
  4. Admission price to tourist attractions, as defined in § 26-63-401.
2. 1. Any tourist attraction with total gross receipts of seven hundred fifty thousand dollars ($750,000) or more that has a portion of the real property on which the attraction is located that abuts and adjoins a city may petition the adjoining city to be included without annexation in the levy and collection of the tax set forth in subsection (a) of this section.
  2. Upon receipt of the petition, the governing body may pass an ordinance effective on or after January 1, 2000, levying the tax set forth in this section on the petitioning area at the same rate as that of the adjoining city.
  3. The adjoining city shall have no authority over the petitioning attraction except as provided in this section.
  4. As used in this section, “tourist attraction” means:
    1. A cultural or historical site;
    2. A recreational or entertainment facility;
    3. An area of natural phenomena or scenic beauty;
    4. A theme park;
    5. An amusement or entertainment park;
    6. An indoor or outdoor play or music show;
    7. A botanical garden; or
    8. A cultural or educational center.
3. 1. As used in this subchapter, “lodging” means furnishing for profit temporary accommodations based on a rental, lease, or other agreement.
  2. “Lodging” includes the furnishing for profit of:
    1. A hotel room, motel room, or other similar room that provides accommodations for a traveler;
    2. A condominium rental agreement; and
    3. A meeting or party room facility.
  3. “Lodging” does not include the rental or lease of an accommodation for thirty (30) consecutive days or more.
1. Any city levying a tax pursuant to this subchapter in the ordinance levying the tax shall create a city advertising and promotion commission to be composed of seven (7) members as follows:
  1. Four (4) members shall be hotel, motel, or restaurant owners or managers of businesses that collect the tax authorized under this subchapter and one (1) member shall be a gift shop owner or manager, each of whom shall be appointed by the mayor with the approval of the governing body of the city;
  2. One (1) member who is appointed at large by the mayor with the approval of the governing body of the city; and
  3. The remaining two (2) members of the commission shall be the mayor and one (1) member of the governing body of the city selected by the governing body of the city or two (2) members of the governing body of the city as provided in the levying ordinance.
2. 1. Each member appointed to the advertising and promotion commission shall serve a term of four (4) years and until his or her successor is selected as provided under this section.
  2. The terms shall be staggered so that no more than two (2) members' terms expire each year.
3. 1. If a vacancy occurs in an appointed position for any reason, the mayor shall appoint a person within sixty (60) days to fill the vacancy.
  2. 1. If the mayor fails to appoint a member to fill a vacancy within sixty (60) days, then the chair of the commission shall appoint a person to fill the vacancy within thirty (30) days, and the appointment shall be approved by a majority of the commissioners.
    2. The governing body of the city shall approve the appointment before a new member appointed under subdivision (c)(2)(A) of this section may act in his or her official capacity.
  3. A new member under this subsection shall serve for the remainder of the unexpired term.
4. The members shall determine by majority vote who shall serve as chair.
1. From the effective date of the levying ordinance, the tax so levied shall be paid by the persons, firms, and corporations liable therefor and shall be collected by the city which has passed the levying ordinance in the same manner and at the same time as the gross receipts tax levied by §§ 26-75-602 — 26-75-613.
2. The person paying the tax shall report and remit the tax upon forms provided by the city, and as directed by the city, and the rules, forms of notice, assessment procedures, and the enforcement and collection of the tax under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., so far as practicable shall be applicable with respect to the enforcement and collection of the tax levied pursuant to the authority of this subchapter. However, the administration and enforcement and all actions shall be by and in the name of the city through the proper city officials.
1. Every city of the first class, city of the second class, and incorporated town by its ordinance may levy a tax of not more than twenty-five dollars ($25.00) per transaction on all sales of goods and services by businesses located on the premises of a municipal airport or a regional airport located within the city or by businesses located on property adjacent to the airport when such businesses provide goods and services for airplanes in excess of two thousand five hundred dollars ($2,500).
2. The tax shall be collected in the manner prescribed by ordinance and shall be used for the maintenance, operation, or construction of the airport facility.
1. Each blank license shall be signed by the clerk and authenticated by the seal of the county court. The county collector in granting every license shall fill in and countersign one (1) of the blank licenses delivered to him or her by the clerk of the county court. No license, unless thus signed, authenticated, and countersigned, shall authorize or avail any person to act under it.
2. The county collector shall be entitled to a five percent (5%) commission on each license for the amount collected, to be paid by the person receiving the license.
1. The account of the clerk of the county court against the county collector for the licenses provided for in this act shall be so kept as to show by denominations and numbers exactly what licenses issued to the county collector by the clerk are in the county collector's hands at any time. Upon the final settlement of each county collector, the clerk of the county court shall require the return by the county collector of all licenses issued to the county collector and not issued by the county collector.
2. The county collector shall receive credit for all of such licenses as he or she shall return to the clerk without having issued them.
3. For all licenses the county collector shall not thus account for, the county collector shall be held liable upon his or her official bond as county collector for so much money as the amount of the licenses, and the clerk shall certify the settlement to the Auditor of State.
1. The privilege taxes paid as provided in this act to the county collector shall be reported by him or her quarterly and paid into the county treasury within twenty (20) days after the granting of the license for which the privilege tax is paid.
2. Each county collector shall at the end of each quarter make to the clerk of the county a detailed report of the licenses issued by the county collector during the quarter, showing:
  1. The number and date of the license;
  2. The name of the license;
  3. The privilege for which it was issued; and
  4. The amount collected for it.
3. 1. If a county collector fails to make the report, the county collector shall be notified by the clerk of the county court and required to make the report.
  2. Upon conviction, a county collector who fails to perform any of the duties required of the county collector under this act is guilty of a violation and shall be fined in any sum not less than three hundred dollars ($300) nor more than one thousand dollars ($1,000).
1. 1. It shall be the duty of the sheriff or any constable of the county to ask, demand, and receive from persons who may attempt in any county to make and exhibit any of the objects or performances, upon which a specified tax is levied, the tax for an exhibition.
  2. Upon demand, if a person shall neglect or refuse to pay the tax, he or she shall be deemed a disturber of the public peace, and it shall be the duty of the officers making the demand to command him or her to immediately desist, and to compel obedience to such command, such officer may call to his or her aid any number of citizens.
2. 1. It shall be the duty of the county collector to call upon any person he or she may know, or have reason to believe, to be pursuing within his or her county any business upon which, by the provisions of this act a specific tax is levied, without having a license therefor, as required by law, to produce a license.
  2. If the person fails or refuses to produce to the county collector a license, then it shall be the duty of the county collector to immediately give information against the person to some justice of the peace of the county. However, if the circuit court is in session, then it shall be the duty of the county collector to give the information to the grand jury of the county.
1. In cases when by the provisions of this act the privilege is to be for twelve (12) months or less, the license shall expire on April 30 next after the date of the delivery thereof by the county collector to the party applying for it.
2. In a case when the privilege is to be for six (6) months or less, the license shall expire on June 30 and December 31, respectively, next after the date thereof.
1. 1. It shall be unlawful for any foreign person or corporation to swap, trade, or traffic in horses or mules in this state, or to peddle organs, stove ranges, or pianos, or vehicles without first paying a license of one hundred dollars ($100) in each county in which they do business.
  2. This section shall not apply to any horse or mule trader, except those who travel through the country carrying their camping outfits and who camp on the public domain.
2. Upon conviction, a person violating this section is guilty of a violation and shall be fined in any sum not less than one hundred dollars ($100) nor more than three hundred dollars ($300). Each day's violation is a separate offense.
3. 1. It shall be the duty of the sheriff of the county or the constable of any township to collect the license for his or her county. When collected, it shall be turned over to the county treasurer, the sheriff or constable shall take duplicate receipts for it, with one (1) to be given to the county clerk and one (1) retained as a voucher for his or her respective settlement with the court.
  2. Upon conviction, a sheriff or constable who knowingly fails to perform any of the duties prescribed in this subsection is guilty of a violation and shall be punished by a fine not exceeding two hundred dollars ($200).
1. Any city council or board of commissioners of any municipal corporation in this state shall have the power to enact by a two-thirds vote of all members elected thereto ordinances requiring any person, firm, individual, or corporation that shall engage in, carry on, or follow any trade, business, profession, vocation, or calling, within the corporate limits of the city or town, to pay a license fee or tax, except such persons, firms, individuals, or corporations that pay a tax to the city, town, or state on gross incomes or premium incomes and except their agents.
2. No person, firm, individual, or corporation shall pay a license fee or tax mentioned in this chapter in more than one (1) city in this state unless such person, firm, individual, or corporation maintains a place of business in more than one (1) city.
3. The license charged and collected shall be for the privilege of doing business or carrying on any trade, profession, vocation, or calling in the city where the trade, business, profession, vocation, or calling is situated, to take out and procure a license therefor and pay into the city or town treasury before receiving it such a sum or amount of money as may be specified by the ordinance for the license and privilege.
4. The council or boards shall have the right to classify and define any trade, business, profession, vocation, or calling and to fix the sum or amount any person, firm, individual, or corporation shall pay for the license required for the privilege of engaging in, carrying on, or following any trade, business, vocation, or calling, based on the amount of goods, wares, or merchandise carried in stock in any business, or the character and kind of trade, business, profession, vocation, or calling. However, no classification shall be based upon earnings or income.
5. The council or boards shall have the full power to punish for violation of these ordinances. Neither the limitation as to the amount of license nor anything contained in this chapter shall be construed as a limitation or restriction upon the power of a city or town to tax, license, regulate, or suppress any trade, business, profession, vocation, or calling in any case in which power has been conferred by any other laws.
1. In ascertaining the persons, firms, individuals, or corporations liable to pay a license for the privilege of engaging in any trade, business, profession, vocation, or calling in any city or town, the city council or board of commissioners may be governed by the list of persons, firms, individuals, or corporations as shown by the latest records of the county assessor of the county where the city or town is situated.
2. In making classifications upon the amount of stock, wares, or merchandise on hand or carried in any business, the council or board may be governed by the latest assessments for personal property on file in the county assessor's office.
3. The council or board shall have the right and power to change, increase, or decrease the amount of the license or the number of persons to pay it according to the change in the county assessor's records made from year to year.
1. The city council or board of commissioners of any city or town by ordinance shall provide all rules and regulations for the payment of a license for the privilege of engaging in any trade, business, profession, vocation, or calling in the city or town.
2. All persons, firms, individuals, or corporations desiring to engage in any business named in this chapter shall comply with the rules and regulations before engaging in their trade, business, profession, vocation, or calling.
1. Cities of the first class are authorized to license, regulate, and tax the privilege of engaging in the mercantile business in their cities. However, this section shall not apply to persons who remain in the mercantile business for a continuous period of six (6) months.
2. Cities of the first class in order to determine who are or may be liable to pay the license or tax may require all persons who enter into the mercantile business in their cities to execute a bond to the city with good and sufficient security, to be approved by the city clerk thereof, conditioned that, if the merchant does not remain in continuous business for a period of six (6) months or longer, then the amount of the license or tax will be paid to the city.
3. This section shall not apply to or be construed to include any vegetables, grain, fruit, or other farm products or livestock of any description.
1. 1. All cities of the first class and cities of the second class are authorized and empowered to license, tax, and regulate gift enterprises, and all persons, firms, and corporations aiding, abetting, or patronizing them.
  2. The license or tax shall not exceed one thousand dollars ($1,000) per annum for each gift enterprise and five hundred dollars ($500) per annum for each person, firm, or corporation aiding, abetting, or patronizing the gift enterprise.
2. As used in this section, “gift enterprise” includes the premium stamp, periodical ticket, trading stamp, and similar schemes and devices, wherein by means of stamps, checks, tickets, or other devices certain merchants, manufacturers, and other persons engaged in lawful occupations or callings are advertised, exploited, and patronized to the exclusion of others on like terms.
1. A municipality in which the manufacturing facilities of a native wine producer are located and which producer produces four hundred thousand gallons (400,000 gals.) of wine per year or more is authorized to levy a tax of not to exceed three percent (3%) on the gross receipts derived from the sale at retail of native wines at the retail outlet of the native wine producer located within the municipality.
2. The tax authorized in this section may be levied by ordinance of the governing body of the municipality and shall be collected and remitted to the city treasurer in such manner, and the proceeds thereof may be used for such purposes, as may be prescribed by ordinance.
1. A municipal corporation may license and tax amusement devices defined in § 26-57-402 and vendors of amusement devices defined in § 26-57-402.
2. However, the fee for the license and tax shall not exceed the amount of tax imposed by § 26-57-404.
1. In addition to such taxes as are levied by the State of Arkansas for the privilege of using and operating motor vehicles on the public roads and highways of this state, the counties of the state and municipalities therein under the conditions set forth in this chapter are authorized, respectively, to levy a tax to the maximum amount specified in § 26-78-104 upon the owners of motor vehicles for the privilege of using and operating their vehicles upon the public roads, streets, and other public ways in the county or municipality.
2. The levy of the tax authorized by this chapter when made by a county shall be by resolution adopted by the quorum court of the county, and when made by a municipality shall be by resolution adopted by the governing body of the municipality.
3. The tax authorized in this chapter to be levied shall be designated and known as the “County and Municipality Vehicle Tax”.
1. 1. The counties of the state shall have the first opportunity to levy the County and Municipality Vehicle Tax.
  2. 1. Any levy by a county may be upon owners residing everywhere in the county or only upon owners residing within the county but outside the corporate boundaries of all municipalities in the county.
    2. That is, the tax must cover the entire county or the area outside all municipalities and cannot cover some municipalities and omit others.
  3. This levy may be in any amount not exceeding the authorized maximum.
  4. A municipality in a county may levy the tax only if the county quorum court by the time of adjournment of its regular annual session in any calendar year has failed to levy the tax upon the owners residing within the corporate limits of the municipality or if by the time of adjournment the court has not levied the full amount of the authorized tax for the next calendar year at the regular annual session or at any special session held in any calendar year prior to its regular annual session in the calendar year.
  5. Each levy by the county quorum court or by the governing body of the municipality shall be for collection during the calendar year next following the year in which the levy is made and, except in the case when bonds are issued as authorized, unless the levy is again made, the tax shall cease to be levied at the expiration of the calendar year for which collected and shall not again be collected until levied by the county quorum court by the time of adjournment of the regular annual session of the county quorum court or thereafter by the governing body of a municipality, as indicated.
2. 1. Notwithstanding other provisions of this chapter, before the tax levied by any county quorum court upon owners residing everywhere in the county or only upon owners residing within the county but outside the corporate boundaries of all municipalities in the county may be collected, the county court shall call a special election in accordance with § 7-11-201 et seq. upon the first levy of the tax by the county quorum court, to be held not more than ninety (90) days from the date of the adoption of the levy of the tax by the quorum court, at which the qualified electors of the area to be affected by the tax shall vote on the question of the levy of the tax.
  2. If at the special election a majority of the qualified electors of the area affected by the tax voting on the issue at the special election shall vote for the levy of the tax, the tax may be thereafter levied in the area in the manner authorized in subsection (a) of this section, and it shall not be necessary that an election be called again in the area on the question of levying the tax.
  3. If a majority of the qualified electors of the affected area voting on the issue at the special election shall vote against the levy of the tax, the tax shall not be levied in the area.
  4. The quorum court of the county at any subsequent annual meeting may propose the levy of the tax, and the election on the tax shall be called as provided in this section.
  5. A special election held pursuant to this chapter shall be conducted in accordance with the election laws of this state, and the form of the ballot, the method of voting, the counting, tabulation, and certification of the special election results shall be in the manner provided by law.
3. 1. Any tax levied by any municipality under the provisions of this chapter for the first time prior to July 1, 1967, and without the calling of a special election of the qualified electors of the municipality, shall continue in full force and effect without the calling of an election.
  2. However, before the tax levied by the governing body of any municipality for the first time after July 1, 1967, upon vehicle owners residing in the municipality may be collected, the mayor shall call a special election in accordance with § 7-5-103(b) [repealed] to be held not more than ninety (90) days from the date of the adoption of the levy of the tax by the governing body of the municipality, at which the qualified electors of the municipality shall vote on the question of the levy of the tax.
  3. At the special election, if a majority of the qualified electors of the municipality voting on the issue shall vote for the levy of the tax, the tax may be thereafter levied in the municipality in the manner authorized in subsection (a) of this section, and it shall not be necessary that an election be called again in the municipality on the question of levying the tax.
  4. If a majority of the qualified electors of the municipality voting on the issue at the special election shall vote against the levy of the tax, the tax shall not be levied in the municipality.
  5. However, the governing body of the municipality at any time after the expiration of one (1) year from the election in the municipality may propose the levy of the tax, and the election on the tax shall be called as provided in this section.
  6. A special election held pursuant to this chapter shall be conducted in accordance with the election laws of this state, and the form of the ballot, the method of voting, the counting, tabulation, and certification of the special election results shall be in the manner provided by law.
1. The resolution of the county quorum court or of the governing body of a municipality, as the case may be, may contain a classification of vehicles by types and the rate of the County and Municipality Vehicle Tax levy, stated in dollars and cents, to be collected from the owners of the vehicles coming within the classifications. However, no such classification at the time of the adoption of any resolution shall include any vehicle for the use of which a state tax or fee for the registration or licensing of motor vehicles is not at the time levied upon the owner.
2. 1. 1. The maximum vehicle tax which may be levied and collected shall not exceed five dollars ($5.00) per year per vehicle, irrespective of its classification.
    2. The owner of a vehicle, having paid the vehicle tax in any one (1) county or municipality for a particular year, shall not be required to pay the vehicle tax for the use of the same vehicle in any other county or municipality for the same year.
  2. 1. If the county quorum court levies the full five dollars ($5.00) per year per vehicle for the next calendar year throughout the county, then no municipality in that county shall levy any tax for the same year, it being declared that the maximum amount that shall be paid by any owner for any vehicle for any year under this chapter shall be five dollars ($5.00).
    2. If the county levies the vehicle tax but excludes the municipalities therein, then any municipality may levy any amount up to the maximum amount of five dollars ($5.00).
    3. If the county levies the vehicle tax throughout the county but levies less than five dollars ($5.00), then any municipality may levy any amount up to the maximum amount which, together with the amount levied by the county quorum court, will not exceed five dollars ($5.00).
1. 1. The County and Municipality Vehicle Tax shall be due and payable, without penalty, during the month of January of the calendar year next following the year in which the levy is made.
  2. Penalty for delinquent payment of the vehicle tax shall be one dollar ($1.00) per vehicle per month for each month's delinquency.
2. 1. Any owner of any vehicle delinquent in the payment of the vehicle tax for more than five (5) months who after the five (5) months shall use and operate the vehicle upon the public roads, streets, and other public ways within the county or municipality levying the vehicle tax or who shall knowingly permit the vehicle to be so used and operated by another person shall be guilty of a violation and upon conviction shall be fined any sum not less than twenty-five dollars ($25.00) and not more than fifty dollars ($50.00) for each violation.
  2. The fine assessed in subdivision (b)(1) of this section shall be in addition to the vehicle tax and penalty provided in subsection (a) of this section.
3. 1. The owner of any vehicle first acquired or first used in the county after July 1 of the taxable year shall be required to pay only one-half (½) of the annual rate of the vehicle tax for the remainder of the calendar year, and the vehicle tax may be paid without penalty during the thirty-day period next following the date of the first acquisition or first use of the vehicle.
  2. However, no vehicle tax shall be required of the owner if the vehicle tax for the particular year has been paid by a former owner of the vehicle, whether or not in the same county or municipality.
1. The County and Municipality Vehicle Tax in the case of a levy by the county shall be collected by the county collector and may be collected at the time personal property taxes of the county are due on personal property of the taxpayer, or may be collected at any time the quorum court determines is reasonable and expedient for the collection of the tax.
2. The county collector's commission for collecting the tax shall be three percent (3%) of the total amount collected.
3. Consecutively numbered receipts, printed in duplicate, shall be used by the county collector to acknowledge payment of the tax. Each receipt shall have printed on it:
  1. The name of the county;
  2. The name of the tax;
  3. The year of the tax;
  4. Space for indicating:
    1. The name and address of the taxpayer;
    2. The date of payment;
    3. The amount of tax;
    4. The amount of penalty;
    5. The total amount collected;
    6. The make and year model of the vehicle; and
    7. The state motor vehicle license number at the time attached to the vehicle; and
  5. Space for the signature of the county collector.
4. At the time of issuing his or her receipt, the county collector shall also deliver to the taxpayer a windshield sticker, metal tag, or other type of identification to be attached to the vehicle by the owner.
5. A new series of receipts shall be issued for each year's tax. A separate receipt shall be issued for each vehicle, the original of which shall be given to the taxpayer at the time of payment of the tax. The duplicate receipt shall be retained by the county collector for accounting and auditing purposes.
6. In the case of municipalities levying the tax, the municipal officer designated by ordinance shall collect the tax and shall follow insofar as practicable the same procedure as set forth in this section with reference to collection by the county collector for the county.
1. For the purpose of segregating and keeping apart the revenues derived from the County and Municipality Vehicle Tax from the other revenues of the county or the municipality, as the case may be, there shall be established a separate account, styled “ County Vehicle Tax Account”, in the case of a county, and “ Municipality Vehicle Tax Account”, in the case of a municipality, in a bank that is an authorized depository of county funds in the case of a county and municipal funds in the case of a municipality. All revenues derived from the tax shall be deposited into the separate account.
2. Withdrawals shall be made from the separate account only for the purpose of paying the cost of duplicate receipts, windshield stickers, or other types of identification to be attached to vehicles as required under this chapter, for payment of the county collector's commission, and thereafter, for transmittal to the county treasurer in the case of the county tax and to the treasurers of the respective municipalities in the county in the case of the municipal tax.
1. In the case of the County and Municipality Vehicle Tax, the county treasurer not later than the tenth day next following the end of each calendar month shall distribute the revenues so received by the county treasurer as follows:
  1. Each municipality shall receive by deposit with the municipal treasurer the full amount paid by a taxpayer residing at the time of payment as reflected by the address of the taxpayer on the receipt referred to in § 26-78-106 within the corporate limits of the municipality; and
  2. The county shall receive the full amount paid by a taxpayer residing at the time of payment as reflected by the address of the taxpayer on the receipt referred to in § 26-78-106 in the county but outside of the corporate limits of any municipality in the county.
2. Except in the case of the issuance of bonds, as provided, proceeds of the vehicle tax shall be handled as follows:
  1. Proceeds of the vehicle tax received by the county treasurer shall be credited to the county highway fund, there to be used for the maintenance, construction, and reconstruction of roads, bridges, and other public ways in the county highway system. The county treasurer shall be entitled to a commission of two percent (2%) for handling the funds;
  2. Proceeds of the tax received by the treasurer of each municipality from collections pursuant to the levy by the county quorum court shall be credited to the street fund, there to be used for the maintenance, construction, and reconstruction of streets and other public ways in the municipality; and
  3. Proceeds received from a levy made directly by the governing body of a municipality, pursuant to the authority and subject to the conditions set forth in this chapter, shall be credited by the treasurer of the municipality to the street fund, there to be used for the maintenance, construction, and reconstruction of streets and other public ways in the municipality.
3. All vehicle tax revenues received by the county and the municipality shall be revenues of the year in which received by the respective treasurers thereof.
1. Any county or municipality levying the County and Municipality Vehicle Tax as authorized in this chapter, in addition to the uses authorized in this chapter, may use revenues derived from the tax for the purpose of providing ambulance services in the county or municipality, for purchasing firefighting equipment, and for providing municipal parks.
2. Twenty-five percent (25%) of all revenues derived from the levy of the tax by any municipality shall be used for the construction and maintenance of local parks and outdoor recreation areas. If any municipality shall not have any local parks or outdoor recreation areas, then all revenues derived from imposing the tax shall be used in the manner and for the purposes provided by law.
3. Any county or municipality levying the motor vehicle tax as authorized by this chapter and any municipality levying a motor vehicle tax as authorized by §§ 14-57-701 — 14-57-712, in addition to the uses authorized in these statutes, may use revenues derived from the tax for the purpose of purchasing, owning, operating, and maintaining a public transportation system with all facilities and equipment useful thereto in providing public transportation to the residents and citizens thereof.
1. Counties and municipalities are authorized to issue revenue bonds and to use the proceeds thereof either alone or together with other available funds and revenues for, in the case of the counties, the construction and reconstruction of roads, bridges, and other public ways in the county highway system including, without limitation, the acquisition of rights-of-way, and in the case of municipalities, the construction and reconstruction of streets and other public ways in the municipality including, without limitation, the acquisition of rights-of-way, and, in either case, to pay necessary incidental expenses, to pay the expenses of the bonds, and to provide for interest on bonds until revenues are available for the payment thereof.
2. The issuance of revenue bonds shall be by ordinance in the case of a municipality and by order of the county court in the case of a county.
1. Revenue bonds may be issued only with the approval of a majority of the qualified electors of the municipality or county voting at an election called for that purpose.
2. An election on the question of issuing revenue bonds shall be held at such time as the governing body of the municipality or the county court of a county shall designate by ordinance or order.
3. The ordinance or order shall specifically state the purpose for which the bonds are to be issued, the total amount of the issue, and the date upon which the election is to be held, which date shall not occur earlier than thirty (30) days after the passage of the ordinance or the entering of the order.
4. The election shall be held and conducted, the vote canvassed, and the results declared in the manner provided for municipal or county elections, so far as they may be applicable, except as otherwise provided.
5. Notice of the election shall be given by the governing body of the municipality or the county in a newspaper of general circulation within the municipality or county one (1) time a week for four (4) consecutive weeks, with the last publication to be not less than ten (10) days prior to the date of the election.
6. Only qualified electors of the municipality or county shall have a right to vote at the election, and the results of the election shall be proclaimed by the governing body of the municipality or county and shall be conclusive unless attacked in the courts within thirty (30) days after the date of the proclamation.
1. As the county court in the case of bonds issued by a county, and the governing body of the municipality in the case of bonds issued by a municipality, shall determine, the bonds may:
  1. Be coupon bonds, payable to bearer, or may be made registrable as to principal only with interest coupons, or may be made registrable as to both principal and interest without coupons, and may be made exchangeable into bonds of another denomination, which bonds of another denomination may in turn be either coupon bonds payable to bearer, or coupon bonds registrable as to principal only, or bonds registrable as to both principal and interest without coupons;
  2. Be in such form and denomination;
  3. Have such date or dates;
  4. Be stated to mature at such times;
  5. Bear interest payable at such times and at such rate or rates;
  6. Be made payable at such places within or without the State of Arkansas;
  7. Be made subject to such terms of redemption in advance of maturity at such prices; and
  8. Contain such other terms and conditions.
2. The bonds shall have all the qualities of negotiable instruments under the laws of the State of Arkansas, subject to provisions as to registration of ownership, as set forth in this subchapter.
1. The bonds may be issued in one (1) or more series, and there may be successive bond issues for the purpose of accomplishing the authorized purposes, subject however, to the provisions and restrictions set forth in the authorizing order or ordinance, as the case may be, controlling priority between and among issues and successive issues as to security.
2. The order or ordinance may provide for the execution by the county or municipality of an indenture which, among other matters, defines the rights of the bondholders and provides for the appointment of a trustee for the bondholders.
3. The indenture may control the priority between and among issues and successive issues and may contain any other terms, covenants, and conditions that are deemed desirable including, without limitation, those pertaining to:
  1. The custody and application of the proceeds of the bonds;
  2. The disposition of pledged revenues;
  3. The maintenance of various funds and reserves;
  4. The nature and extent of the security;
  5. The rights, duties, and obligations of the county or the municipality and the trustee for the holders and registered owners of the bonds; and
  6. The rights of the holders and registered owners of the bonds.
4. In the event the county court of the county or the governing body of the municipality, as the case may be, determines that an indenture is not necessary or desirable, then the details set forth in this section which may be included in the indenture in lieu of the indenture may be included in the authorizing order of the county court or the authorizing ordinance of the municipality, as the case may be.
5. It shall not be necessary for any municipality to publish any indenture if the ordinance authorizing the indenture is published as required by law governing the publication of ordinances of a municipality and the ordinance advises that a copy of the indenture is on file in the office of the clerk or recorder of the municipality for inspection by any interested person, and the copy of the indenture is filed with the clerk or recorder of the municipality.
1. All bonds issued under this chapter may be sold for such price, including, without limitation, sale without discount, and in such manner as the county or municipality may determine, but in no event shall the county or the municipality be required to pay more than four and one-half percent (4.5%) interest on the amount received, computed with relation to the absolute maturity of the bonds in accordance with the standard tables of bond values.
2. The bonds may be sold with the privilege of conversion into an issue bearing a lower rate or rates of interest, upon such terms and conditions as the county or municipality shall determine, but each such determination shall include the condition that the county or municipality receive no less and pay no more than it would receive and pay if the bonds were not converted. The conversion shall be subject to the approval of the county court in the case of bonds issued by the county and to the approval of the governing body of the municipality in the case of bonds issued by the municipality.
1. Bonds shall be executed by the manual or facsimile signature of the county judge and by the manual signature of the county clerk in the case of county bonds and by the manual or facsimile signature of the mayor and the manual signature of the clerk or recorder in the case of bonds issued by a municipality.
2. Coupons attached to the bonds shall be executed by the facsimile signature of the county judge in the case of bonds issued by a county and by the facsimile signature of the mayor in the case of bonds issued by a municipality.
3. In case any of the officers whose signatures appear on the bonds or coupons shall cease to be officers before the delivery of the bonds or coupons, the signatures shall nevertheless be valid and sufficient for all purposes.
1. Revenue bonds issued under this chapter shall not be general obligations of the county or of the municipality but shall be special obligations, and in no event shall the revenue bonds issued under this chapter constitute an indebtedness of the county or the municipality within the meaning of any constitutional or statutory limitation. It shall be plainly stated on the face of each bond that it has been issued under the provisions of this chapter and that it does not constitute an indebtedness of the county or municipality within any constitutional or statutory limitation.
2. The principal of and interest on the revenue bonds shall be payable from the net revenues derived from collections of the County and Municipality Vehicle Tax. Net revenues are defined as the revenues which are available to the county treasurer and the municipal treasurer after payment of the cost of duplicate receipts, windshield stickers, or other types of identification attached to vehicles as required under this chapter, and payment of collector's commissions, all as specified in this chapter. In this regard, provision may be made for the depositing of the net revenues into a special trust fund to be used for no other purpose than that specified in the authorizing order of the county court or the authorizing ordinance of the municipality.
3. Provision may be made in the authorizing order or the authorizing ordinance, or in any indenture provided for therein, for the pledging of all or a specified portion of the proceeds of the net revenues to a particular bond issue, with or without provision for subsequent issues payable from the net revenues on such terms and pursuant to such conditions as may be specified, or a specified portion of the net revenues may be set aside for a particular bond issue, with that bond issue having no call or pledge on the remaining portion of the net revenues which shall then be available for the purposes authorized by this chapter or for the pledging to subsequent bond issues.
4. 1. Once any bonds are issued by a county or by a municipality, then the tax, the net revenues of which are pledged to the bonds, shall constitute and be deemed to be a continuing annual tax which shall not and cannot be made to terminate and which must be collected each year thereafter, without the necessity for any further or additional action by the levying body, for as long as shall be necessary to pay in full the entire principal of and interest on all revenue bonds issued under this chapter to the payment of which the revenues are pledged.
  2. In this regard, however, if a municipality has issued bonds and pledged thereto the revenues received by it under § 26-78-108(a)(1), the vehicle tax levied by the county shall be a continuing annual tax only in the municipalities that have pledged the revenues to bonds to the extent of the pledge. If the county quorum court does not levy the county tax for any year thereafter, the continuing annual tax applicable to a municipality shall by that fact become a municipal tax to be collected and handled under the applicable provisions of this chapter as though levied by the municipality under this chapter.
1. Revenue bonds may be issued for the purpose of refunding any obligations issued under this chapter. The refunding bonds may be combined into a single issue with bonds issued under the provisions of this chapter for the purpose of providing funds for financing additional construction and reconstruction work specified in this chapter. When bonds are issued for refunding purposes, the refunding bonds may either be sold or delivered in exchange for the bonds being refunded. If sold, the proceeds may be either applied to the payment of the bonds being refunded or deposited into escrow for the retirement thereof.
2. All bonds issued under this section in all respects shall be authorized, issued, and secured in the manner provided for other bonds issued under this chapter and shall have all the attributes of such bonds. The order or ordinance under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby.
1. 1. In addition to all other taxes imposed under this chapter for the privilege of using and operating vehicles, a county that is a member of a regional mobility authority may impose an additional tax upon the owner of a motor vehicle for the privilege of operating the motor vehicle upon the public roads, streets, and other public ways in the county.
  2. The tax revenues collected under this section shall be used only for the finance or support of the regional mobility authority.
2. The tax revenues shall be collected by the county collector pursuant to §§ 26-78-105 and 26-78-106.
3. Notwithstanding the provisions of § 26-78-104, the amount of the tax revenues collected under this section shall be determined by the county quorum court and may exceed the maximum amount set forth in § 26-78-104.
4. The procedure for implementing a tax under this section shall be as provided under § 26-78-103.
1. The county court together with a majority of the justices of the peace of the county at the regular term thereof for making the appropriations and levying taxes for the ensuing year may appropriate and levy not exceeding three (3) mills as the road and bridge tax on all of the taxable property of the county.
2. The tax shall be collected by the county collector of the state and county taxes in the same manner as the state and county taxes are collected, except the county collector shall only receive in payment of the road and bridge tax levied under this chapter United States currency or county warrants legally drawn on the road tax fund, on the certificate or receipt of overseers as provided in this chapter.
3. When the county collector shall pay into the county treasury the taxes so collected, the county shall take the county treasurer's receipt for so much money paid into the credit of the district on account of roads and bridges.
4. If the taxes are not paid as provided, the property shall be sold in the same manner that property is sold for the nonpayment of taxes.
1. Of the amount collected from the annual three-mill road tax in any county in the state, the county courts shall apportion one-half (½), except when a greater amount is allowed by law, of the amount collected upon property within the corporate limits of any city or town for use in making and repairing the streets and bridges in the respective cities or towns.
2. 1. The county collector of any county in the state shall pay into the county treasury under § 26-39-204 the amount so apportioned by the county court for the respective cities or towns.
  2. The county treasurer shall distribute the municipal apportionments, which shall be expended exclusively by the cities or towns for the purpose of making and repairing the streets and bridges within the corporate limits of the respective cities or towns.
3. This section shall not repeal, alter, change, or affect any special act passed under which any city or town is receiving any greater or lesser amount than the three-mill county road tax.
1. The county courts shall have the power, and it is required, to appropriate all moneys collected under this act as road tax to the opening, construction, and repair of roads in the road districts in the county when they may have been collected.
2. The county court or county judge shall order and direct the county highway commission, or overseers of each road district wherein the opening, constructing, or repairing of roads is to be done, to make the contract for such opening, constructing, or repairing in such manner as the county court or county judge may direct and to superintend and direct it, and when it is done, to report under oath in writing to the court.
3. When it appears and the county court is satisfied that the contract has been faithfully performed, the county court shall direct the clerk to draw a warrant in favor of the party with whom the contract was made, on the county treasurer, for the amount due on the contract, and the county treasurer shall be directed to pay the amount out of the road fund in the county treasurer's hands.
4. The county court may expend all or any part of the road fund in opening, constructing, and repairing roads through, by, and under the county highway commission, without reference to contracts.
1. There is established a uniform rate of ad valorem property tax of twenty-five (25) mills to be levied on the assessed value of all taxable real property, personal property, and utility property in the state to be used solely by school districts to which it may be distributed according to law for maintenance and operation of the schools.
2. 1. 1. The uniform rate of tax shall be assessed and collected in the same manner as other school property taxes, but the net revenues from the uniform rate of tax shall be remitted to the Treasurer of State and distributed by the state to the county treasurer of each county for distribution to the school districts in that county as provided by subsection (c) of this section.
    2. No portion of the revenues from the uniform rate of tax shall be retained by the state but shall be distributed back to the school district from which the revenues were received or to other school districts pursuant to subsection (c) of this section.
    3. No additional fees or charges shall be assessed at the local level for transmission and redistribution of these funds.
    4. The revenues so distributed shall be used by the school districts solely for maintenance and operation of schools.
  2. 1. The Treasurer of State shall establish procedures, forms, and documentation requirements for the certification of net revenues produced by the uniform rate of tax to be deposited with the Treasurer of State and redistributed as provided by law.
    2. Further, the Treasurer of State shall establish procedures, forms, and documentation requirements for the actual deposit and redistribution of the net revenues produced by the uniform rate of tax.
  3. Each county treasurer shall execute an electronic funds transfer agreement with the Treasurer of State to effectuate the contemporaneous transmittal of funds to the Treasurer of State and the redistribution as provided by law of the net revenues produced by the uniform rate of tax.
  4. 1. 1. The Treasurer of State shall process the necessary documentation to certify the amount to be receipted and redistributed to each county treasurer no more than six (6) times each month, with no interim distributions.
      2. By January 31, 2012, and by January 31 of each year thereafter, each county treasurer shall provide an annual summary report of all proceeds generated from ad valorem tax and distributed by the county to a school district for the period beginning January 1 and ending on December 31 of the preceding calendar year to the:
        
        Treasurer of State;
        
        Division of Elementary and Secondary Education; and
        
        Superintendent of the school district to which the proceeds from the uniform rate of tax are distributed by the county.
      3. Failure to report the annual summary required under subdivision (b)(4)(A)(ii) of this section by the county treasurer by the January 31 deadline shall result in the withholding of all reappraisal funding provided under § 26-26-1907 until the county treasurer complies with subdivision (b)(4)(A)(ii) of this section.
      4. Funds withheld under subdivision (b)(4)(A)(iii) of this section are forfeited as follows:
        
        Twenty percent (20%) of withheld reappraisal funds are forfeited every two (2) months of noncompliance; and
        
        After ten (10) months of noncompliance, the total amount of withheld reappraisal funds is forfeited.
      5. A county is not relieved of the requirement to reappraise property, and funding for reappraisal shall be by local taxing unit sources until the county complies with this subdivision (b)(4)(A).
      6. The Division of Elementary and Secondary Education shall notify the Assessment Coordination Division if a county treasurer violates subdivision (b)(4)(A)(ii) of this section and withholding of reappraisal funding under this subdivision (b)(4)(A) is authorized.
    2. Documentation received and certified on the first, second, third, or fourth Tuesday, or second or third Thursday of each month by the time deadlines established by the Treasurer of State shall be processed for execution of the electronic funds transfer of deposit and redistribution, as provided by law, of the net revenues produced by the uniform rate of tax on the following day.
    3. When a banking holiday occurs, the Treasurer of State shall notify the county treasurers of the revised deadline, which shall minimize delay in the receipt and redistribution, as provided by law, of the net revenues of the uniform rate of tax.
  5. Each county official involved in the process established by the Treasurer of State for receipt and redistribution of the net revenues of the uniform rate of tax shall take all actions and do all things necessary to ensure that the process established is carried out in an efficient and prudent manner.
  6. 1. 1. It is the intent of the General Assembly to have the collection and distribution of tax revenues modified as little as possible by the process under this section.
      2. The General Assembly specifically acknowledges that under other law county treasurers distribute revenues monthly on a pro rata basis to the various taxing units with a reconciliation of actual revenues produced by each levy of each taxing unit in the county taking place only in the final settlement produced for each tax year.
    2. The process under this section is not intended to affect the monthly distribution or final settlement process except for the process set out in subdivision (b)(4) of this section.
3. For each school year, each county treasurer shall remit the net revenues from the uniform rate of tax to each local school district from which the revenues were derived.
4. As used in this section:
  1. “Millage rate” means the millage rate listed in the most recent tax ordinance approved by the county quorum court under the authority of § 14-14-904 for the tax year used in a calculation under this subchapter;
  2. “Net revenues” means the revenues generated from ad valorem taxes collected on behalf of a school district multiplied by the ratio derived from dividing the uniform rate of tax by the total millage rate of the school district; and
  3. “Revenues” means the proceeds generated from ad valorem taxes, including:
    1. Current calendar year collections of ad valorem taxes;
    2. 1. Delinquent ad valorem taxes paid to the county in the current calendar year.
      2. Delinquent ad valorem taxes include the penalties and interest that are distributable to a school district under existing law;
    3. The actual amount of homestead tax credit paid to the county in the current calendar year;
    4. Excess commissions that will be distributed to a school district in the current calendar year;
    5. Interest earned in the current calendar year on any tax funds held in trust and distributed to a school district in the current calendar year;
    6. Ad valorem tax proceeds from land redemptions received by the county in the current calendar year; and
    7. A subtraction of all costs and commissions authorized by law relating to the collection of ad valorem taxes that the county deducts from distributions to a school district in the current calendar year.
1. 1. In addition to the uniform rate of tax as provided in § 26-80-101, school districts are authorized to levy by a vote of the qualified electors respectively thereof an annual ad valorem property tax on the assessed value of taxable real, personal, and utility property for the maintenance and operation of schools and the retirement of indebtedness.
  2. The board of directors of each school district shall prepare, approve, and make public not less than sixty (60) days in advance of the annual school election a proposed budget of expenditures deemed necessary to provide for the foregoing purposes, together with a rate of tax levy sufficient to provide the funds therefor, including the rate under any continuing levy for the retirement of indebtedness.
  3. 1. The board of directors shall submit the tax at the annual school election or at such other time as may be provided by law. If a majority of the qualified voters in the school district voting in the school election approve the rate of tax proposed by the board of directors, then the tax at the rate approved shall be collected as provided by law. In the event a majority of the qualified electors voting in the school election disapprove the proposed rate of tax, then the tax shall be collected at the rate approved at the last preceding school election.
    2. However, if the rate approved has been modified pursuant to the uniform rate of tax calculated by the Division of Elementary and Secondary Education, then the tax shall be collected at the modified rate until another rate is approved.
2. No tax levied pursuant to subsection (a) of this section shall be appropriated to any other district than that for which it is levied.
1. Rates voted for different funds of district school tax shall not be shown separately on the county tax books but shall be shown there only in the total amount of district tax to be levied.
2. The school tax shall be collected in the same manner as county taxes are collected, at the same time and by the same person, and shall be paid into the county treasury.
3. The county treasurer shall separate the proceeds of these taxes into the several funds as is provided by law or the school directors as is authorized by law.
4. 1. The county treasurer in the collecting county shall separate the proceeds from the uniform rate of tax by multiplying the ratio of the uniform rate of tax divided by the total rate of tax for the school district multiplied by the net revenues from the total rate of tax for the school district.
  2. These proceeds shall be remitted to the Treasurer of State and shall be redistributed to the county treasurer as provided by § 26-80-101.
1. 1. Upon the approval of a majority of the qualified voters in the school district voting in the school election, the board of directors of each local school district may designate as dedicated maintenance and operation millage some of the school district's additional maintenance and operation millage that exceeds the uniform rate of tax.
  2. The approved tax shall be assessed, levied, and collected as provided by law for other school taxes.
2. Any funds received from the collection of a dedicated maintenance and operations tax shall be used only for maintenance and operation purposes specifically approved by the majority of the qualified voters of the school district voting in the school election and for no other purposes than those that were stated on the ballot.
3. Any levy of a dedicated maintenance and operation millage shall be limited as set forth in subsection (b) of this section and shall not exceed three (3) mills.
4. Any levy of a dedicated maintenance and operation millage must be specified on the ballot, and that specification must list the purpose for which the dedicated maintenance and operation millage is levied.
5. Dedicated maintenance and operation millage may not be used by a school district to comply with the uniform rate of tax levy.
1. 1. When a new school district is created from all or parts of two (2) or more districts or a school district is dissolved and all or part of the area of the dissolved school district is annexed to or consolidated with an existing school district, the board of directors of the resulting school district shall submit to the electors of the school district at the next annual school election a proposed tax millage rate for the school district.
  2. If the proposed millage rate is approved by the electors of the school district, it shall be the rate for the school district, provided that the rate complies with the uniform rate of tax.
2. 1. If a new school district is created from all or parts of two (2) or more school districts or a school district is dissolved and all or part of the area of the dissolved school district is annexed to or consolidated with an existing school district and if the electors have failed to approve a proposed millage rate at a school election, then the tax shall be collected at the rate approved in the last preceding school election.
  2. However, if the rate last approved has been modified pursuant to Arkansas Constitution, Article 14, § 3(b), or Arkansas Constitution, Article 14, § 3(c)(2), then the tax shall be collected at the modified rate until another rate is approved.
1. On or before October 1 of each year, the Division of Elementary and Secondary Education, in conjunction with the Assessment Coordination Division, shall monitor each school district's compliance with the uniform rate of tax.
2. 1. The Division of Elementary and Secondary Education and the Assessment Coordination Division shall determine compliance with the uniform rate of tax by analyzing the millage rate levied for maintenance and operation millage from the most recent school election in a school district in which the ad valorem tax rate was voted upon.
  2. If the millage rate levied for maintenance and operation millage is equal to or greater than twenty-five (25) mills, then the school district is in compliance with the uniform rate of tax and Arkansas Constitution, Amendment 74.
1. Pursuant to the application of Arkansas Constitution, Amendment 74, to the rollback provisions of Arkansas Constitution, Amendment 59, for millage rates levied by the various school districts within the county, the multiplier that is used to reduce the millage which is determined in item number six (6) of the Base Year Millage Rollback Computation and Certification Form under § 26-26-404(d) shall not be used in item number seven (7) of the Base Year Millage Rollback Computation and Certification Form under § 26-26-404(d) to calculate the rollback of the uniform rate of tax.
2. Under § 26-26-404(d), a multiplier of one (1) shall be applied to the uniform rate of tax, and the calculated multiplier shall apply to all other millage above the uniform rate of tax.
1. 1. Upon the refusal or failure of any state officer to perform any duty imposed upon him or her under the provisions of this subchapter, § 26-80-101 et seq., and Arkansas Constitution, Amendment 74, the Attorney General shall institute mandamus proceedings in a court of proper jurisdiction to compel the state officer to perform his or her duties.
  2. Upon the refusal or failure of any county or school district officer to perform any duty imposed upon him or her under the provisions of this subchapter, § 26-80-101 et seq., and Arkansas Constitution, Amendment 74, the prosecuting attorney of the county including the school district shall institute mandamus proceedings in a court of proper jurisdiction to compel the county or school district officer to perform his or her duties.
2. Any officer who neglects, fails, or refuses to comply with a writ of mandamus obtained pursuant to subsection (a) of this section, shall be subject to removal from office and liable on his or her official bond for the neglect, failure, or refusal to comply with the writ of mandamus.
1. This chapter is intended to supplement existing laws and to authorize the levy of the tax authorized hereby without resort to or reliance upon any other law.
2. Any county which is authorized to levy a tax under this chapter may levy such tax without regard to whether such county, or any municipality located therein, has in effect a sales and use tax or taxes.
1. 1. Any tax levied pursuant to the authority of this chapter shall be a tax equal to one percent (1%) on the sales price on items of personal property and services sold or to be used in the levying county to the extent of and subject to the exemptions with respect to the gross receipts tax and compensating use tax as set forth in the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq. and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., respectively.
  2. 1. Any tax levied pursuant to this chapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price from the sale of a:
      1. Motor vehicle;
      2. Aircraft;
      3. Watercraft;
      4. Modular home;
      5. Manufactured home; or
      6. Mobile home.
    2. A vendor shall be responsible for collecting and remitting the tax only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price from the sale of a:
      1. Motor vehicle;
      2. Aircraft;
      3. Watercraft;
      4. Modular home;
      5. Manufactured home; or
      6. Mobile home.
    3. A vendor collecting, reporting, and remitting the county sales or use taxes shall show county taxes as a separate entry on the tax report form.
2. The tax shall be levied by ordinance of the quorum court of the county.
3. Any tax levied pursuant to this chapter shall be for a period of not longer than four (4) years.
1. 1. No ordinance shall be enacted by a quorum court levying a tax under this chapter until a majority of the qualified electors of the county voting on the question shall have approved the levy of the tax at an election called for that purpose and conducted in accordance with the general election laws.
  2. Any such election shall be called by ordinance of the quorum court of the levying county.
2. The ballot title for the election shall include the expiration date for the tax, and any tax levied pursuant to this chapter shall cease upon the expiration date.
3. The ballot title for the election shall identify the project, and the ballot shall specify whether the levy of the tax is contingent upon the levy of sales and use tax pursuant to this chapter by any other county or counties.
1. 1. Upon certification of the election results, the county judge shall issue a proclamation declaring the results of the election and cause the proclamation to be published one (1) time in a newspaper having general circulation within the county.
  2. The county judge shall notify the Secretary of the Department of Finance and Administration of the results after publication of the proclamation has occured and ninety (90) days before the effective date of the tax.
  3. 1. If no election challenge is timely filed, there shall be levied, effective on the first day of the first month of the calendar quarter after the expiration of the thirty-day challenge period and after a minimum of sixty (60) days' notice by the secretary to sellers, a one-percent tax on the gross receipts from the sale at retail within the county on all items that are subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and an excise tax on the storage, use, or consumption within the county of tangible personal property and services purchased, leased, or rented from any retailer outside the state for storage, use, or other consumption in the county, at a rate of one percent (1%) of the sale price of the property or services or, in the case of leases or rentals, of the lease or rental price, the rate of the use tax to correspond to the rate of the sales tax portion of the tax.
    2. The use tax portion of the local sales and use tax shall be collected according to the terms of the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. 1. Any person desiring to challenge the results of the election as published in the proclamation shall file the challenge in the circuit court of the county within thirty (30) days after the date of publication of the proclamation.
  2. 1. In the event of an election challenge, the tax shall be collected as prescribed in subdivision (a)(2) of this section unless enjoined by court order.
    2. A hearing involving such litigation shall be advanced on the docket of the court and disposed of at the earliest feasible time.
1. The Secretary of the Department of Finance and Administration shall maintain a record of the total amount of tax collected pursuant to this chapter and other subchapters authorizing county sales and use tax in each county and shall deposit all such revenues with the Treasurer of State.
2. 1. Upon receipt of the funds, the Treasurer of State shall deduct three percent (3%) of the funds as a charge by the state for its services as specified in this chapter and shall credit the three percent (3%) to the Constitutional Officers Fund and the State Central Services Fund.
  2. In addition, the Treasurer of State is authorized to retain in the Local Sales and Use Tax Trust Fund an amount not to exceed five percent (5%) of the total amount received from the tax levied by each county, to be used by the Treasurer of State to:
    1. Make remittances to the county for rebates made by the county for taxes, if any, in excess of amounts specified by the particular county ordinances paid by a taxpayer;
    2. Make refunds for overpayment of the taxes; and
    3. Redeem dishonored checks and drafts received and deposited into the Local Sales and Use Tax Trust Fund.
3. 1. Except as set forth in subsections (d) and (e) of this section, all funds received by the Treasurer of State from the sales tax levied by each county after deducting the three percent (3%) for the Constitutional Officers Fund and the State Central Services Fund shall be deposited into the Local Sales and Use Tax Trust Fund and shall be credited to the account of the county in which collected.
  2. 1. The Treasurer of State shall transmit monthly to the county treasurer and to the municipal treasurer of each municipality located in a county levying the tax authorized in this chapter its per capita share of the moneys received by the Treasurer of State from the tax levied by the county and credited to the account of the county in the Local Sales and Use Tax Trust Fund.
    2. The county treasurer of any county that has levied a sales and use tax pursuant to this chapter and that rebates taxes paid in excess of a specified amount shall monthly certify to the Treasurer of State the total amount of rebates paid since the preceding certification, and the Treasurer of State shall remit that amount to the county treasurer from the Local Sales and Use Tax Trust Fund.
4. 1. Except for revenue collected under subdivision (d)(2) of this section, money collected that is derived from a tax on aviation fuel levied by a county where a regional airport as described by the Regional Airport Act, § 14-362-101 et seq., is located shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the regional airport, subject to the charges by the state for its services as specified in this section.
  2. Revenue derived from a tax on aviation fuel in effect on December 30, 1987, is not subject to this subsection.
5. Money collected that is derived from a tax on aviation fuel levied by a county that is not dedicated to a specific purpose and may legally be used for any lawful purpose shall not be deposited into the State Treasury but shall be deposited as cash funds by the Treasurer of State into a bank or banks designated by the county and transmitted directly to the publicly owned airport where the aviation fuel was sold, subject to the charges by the state for its services as specified in this section.
1. The collection of any tax levied pursuant to this chapter shall be distributed as follows:
  1. To the county for the acquisition, construction, and equipping of the project, fifty percent (50%) of the tax collections; and
  2. To the county and to each municipality located in the county, proportionately on the basis of population as reflected in the latest federal census, fifty percent (50%) of the tax collections.
2. Funds received by the counties and municipalities pursuant to the provisions of this chapter, other than those required to be applied to a project, as set forth in subsection (a) of this section may be used by the counties and municipalities for any purpose for which the county general funds or the municipal general funds may be used.
3. 1. When any tax adopted by a county pursuant to this chapter is terminated, the Secretary of the Department of Finance and Administration shall retain in the account of that county in the Local Sales and Use Tax Trust Fund for a period of one (1) year an amount equal to five percent (5%) of the final remittance to the county and municipalities therein at the time of termination of the collection of the tax to:
    1. Cover possible rebates by the county;
    2. Cover refunds for overpayment of taxes; and
    3. Redeem dishonored checks and drafts deposited to the credit of the Local Sales and Use Tax Trust Fund.
  2. After one (1) year has elapsed after the effective date of the abolition of the tax in any county, the secretary shall transfer the balance in that county's account to the county and municipalities in the county and shall close the account.
4. The Treasurer of State is authorized to make refunds for overpayment of the tax and to redeem dishonored checks and drafts issued in payment of the tax from the Local Sales and Use Tax Trust Fund.
1. 1. Each vendor who is liable for one (1) or more city sales or use taxes shall report a combined city sales tax and a combined city use tax on his or her sales and use tax report.
  2. 1. The combined city sales tax is equal to the sum of all sales taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
    2. The combined city use tax is equal to the sum of all use taxes levied by a city under this subchapter or any other provision of the Arkansas Code.
  3. This subsection only applies to a tax collected by the Secretary of the Department of Finance and Administration.
  4. This subsection does not apply to tax collected pursuant to § 26-75-502 et seq., which shall continue to be reported separately.
2. 1. Each vendor who is liable for one (1) or more county sales or use taxes shall report a combined county sales tax and a combined county use tax on his or her sales and use tax report.
  2. The combined county sales tax is equal to the sum of all sales taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
  3. The combined county use tax is equal to the sum of all use taxes levied by a county under this subchapter or any other provision of the Arkansas Code.
  4. This subsection only applies to a tax collected by the secretary.
1. 1. The governing body of a city or county may adopt an ordinance levying a local sales and use tax in the amount of one-eighth of one percent (0.125%), one-fourth of one percent (0.25%), one-half of one percent (0.5%), three-fourths of one percent (0.75%), one percent (1%), or any combination of these amounts to pay project costs of an economic development project located within the levying entity or near the levying entity if still located within the state.
  2. 1. The ordinance may levy multiple local sales and use taxes.
    2. However, there shall not be in effect at any one (1) time local sales and use taxes levied under this chapter at an aggregate rate greater than one percent (1%).
2. A certified copy of the ordinance authorizing the levy of a local sales and use tax shall be provided to the Secretary of the Department of Finance and Administration as soon as practicable after the adoption of the ordinance.
3. The local entity shall:
  1. Determine the maximum amount of revenue to be generated by each local sales and use tax levied under this chapter; and
  2. State in the levying ordinance the maximum amount of revenue to be generated by each local sales and use tax levied under this chapter.
4. 1. The local sales and use tax levied under this chapter shall expire when the maximum amount of revenue determined under subdivision (c)(1) of this section has been collected as determined under this subsection.
  2. 1. Except as otherwise provided in § 26-82-106, to provide for the accomplishment of the administrative duties of the secretary, the local sales and use tax shall terminate on the first day of the calendar quarter after the expiration of ninety (90) days from the date there is filed with the secretary a written statement signed by the chief executive officer of the city or county levying the local sales and use tax and identifying the local sales and use tax to be terminated.
    2. In the statement described in subdivision (d)(2)(A) of this section, the city or county levying the local sales and use tax shall certify that it has received the maximum amount of revenue stated in the levying ordinance.
  3. The chief executive officer of the city or county shall file the certification required under this subsection not later than thirty (30) days after the receipt of the maximum amount of revenue stated in the levying ordinance.
  4. Upon the termination of a local sales and use tax under this subsection, any surplus tax collections that may have accumulated from the local sales and use tax shall be transferred to the general fund of the city or county.
1. 1. Within thirty (30) days following the adoption of an ordinance levying a local sales and use tax under this chapter, the levying entity by ordinance shall provide for the calling of a special election on the question of whether to levy the local sales and use tax under §§ 7-11-201 — 7-11-205.
  2. The date for the special election may be the same as the date for the next regular municipal election or county election.
  3. The governing body of the levying entity shall:
    1. Notify the county board of election commissioners that the question has been referred to the vote of the people; and
    2. Submit a copy of the ballot title to the county board of election commissioners.
  4. The election shall be conducted in the manner provided by law for all other municipal and county elections unless otherwise provided in this chapter.
2. 1. Except as otherwise provided in this subsection, the ballot title to be used at the election shall be in substantially the following form:
  2. 1. The ordinance levying the local sales and use tax may contain an expiration date.
    2. If the ordinance contains an expiration date under subdivision (b)(2)(A) of this section, the ballot title shall include the expiration date for the levy of the tax.
    3. If the ordinance is adopted in the form described in this subsection, the local sales and use tax shall cease to be levied on the date stated on the ballot.
    4. The expiration date shall be the last day of a calendar quarter.
    5. An expiration date included under this subsection does not extend the effective period of the local sales and use tax beyond the expiration date provided under § 26-82-103.
  3. 1. 1. Except as provided in § 26-82-103, the governing body of the levying entity may refer to the voters a change in the expiration date for the local sales and use tax approved by the voters to extend the levy of the local sales and use tax beyond the expiration date previously approved.
      2. The proposed expiration date shall be the last day of a calendar quarter.
    2. If the governing body of the levying entity refers to the voters a change in the expiration date for an existing local sales and use tax levied under this chapter, the governing body shall:
      1. Notify the county board of election commissioners that the measure has been referred to the voters; and
      2. Submit a copy of the ballot title to the county board of election commissioners.
    3. 1. An election to change the expiration date for a local sales and use tax levied under this chapter shall be conducted in the manner provided by law for all other municipal and county elections.
      2. The results of the election under this subsection shall be certified, proclaimed, and subject to challenge under § 26-82-105.
    4. 1. To extend the local sales and use tax levied under this chapter to a new expiration date, the levying entity shall notify the Secretary of the Department of Finance and Administration of the new expiration date approved by the voters:
        
        After publication of the proclamation has occurred; and
        
        At least ninety (90) days before the current expiration date of the local sales and use tax.
      2. The local sales and use tax extended under this subdivision (b)(3) shall continue to be levied until the new expiration date.
    5. 1. If the voters do not approve a change in the expiration date for the local sales and use tax levied under this chapter, the local sales and use tax shall continue to be collected until the expiration date previously approved by the voters.
      2. However, the expiration date shall not be extended beyond the expiration date provided under § 26-82-103.
    6. An election to change the expiration date for a local sales and use tax levied under this chapter is not an election on the levy of the sales and use tax.
1. 1. Except under subsection (b) of this section, the levying entity may abolish all or a portion of the local sales and use tax authorized under this chapter by:
    1. A roll call vote of two-thirds (2/3) of all members elected to the governing body of the levying entity, excluding the mayor and county judge, if the governing body of the levying entity has determined that the purposes of the local sales and use tax cannot be fulfilled or cannot continue to be fulfilled; or
    2. An election called by:
      1. Action of the governing body of the levying entity; or
      2. A petition of the qualified voters in the levying entity.
  2. A petition of the qualified voters and the calling and holding of an election concerning the abolition of the local sales and use tax under this subsection are governed by the initiative procedures in Arkansas Constitution, Article 5, § 1, and any ordinances of the levying entity governing initiative procedures.
  3. The governing body of the levying entity may call for an election under this subsection subject to the same procedures stated in this chapter for the calling of the initial election.
  4. 1. The ballot title for use in an election under this subsection shall be in substantially the following form:
    2. However, a ballot title that contains a question for qualified voters on whether to continue the levy of a local sales and use tax complies with this subdivision (a)(4).
2. 1. In a levying entity in which a local sales and use tax has been adopted under this chapter and all or a portion is pledged to secure the payment of bonds, the portion of the local sales and use tax pledged to the payment of bonds shall not be repealed, abolished, or reduced while the bonds are outstanding.
  2. The bonds are not outstanding to the extent that sufficient tax revenues have been set aside to pay the bonds when due.
3. The effective date of an affirmative vote of the qualified voters to abolish the local sales and use tax under subsection (a) of this section shall be the first day of the calendar quarter after the expiration of ninety (90) days from the date of publication of the election proclamation.
4. 1. The effective date of an affirmative vote by the governing body of the levying entity to abolish the local sales and use tax under subsection (a) of this section shall be on the first day of the calendar quarter after the expiration of ninety (90) days from the date a written statement signed by the mayor or county judge of the levying entity abolishing the tax is filed with the Secretary of the Department of Finance and Administration certifying that the governing body of the levying entity has adopted an ordinance abolishing the local sales and use tax.
  2. A copy of the ordinance abolishing the local sales and use tax shall be attached to the certificate.
1. 1. 1. In each levying entity in which a local sales and use tax has been levied under this chapter, each seller shall add the tax imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and the tax imposed under this chapter to the sale price of the product or service, and when added, the combined tax shall:
      1. Constitute a part of the price;
      2. Be a debt of the purchaser to the seller until paid; and
      3. Be recoverable at law in the same manner as the purchase price.
    2. When the sale price in the levying entity involves a fraction of a dollar, the two (2) combined taxes shall be added to the sale price.
    3. A seller is entitled to the same discount with respect to tax remitted under this chapter as is authorized for the collection and remission of gross receipts taxes to the state under § 26-52-503.
  2. If the General Assembly or the electors of the state increase or decrease the rate of the state gross receipts tax, the combined rate of the state gross receipts tax and the sales and use tax by the levying entity shall be the sum of the two (2) rates.
2. The local sales and use tax levied under this chapter on new and used motor vehicles shall be collected by the Secretary of the Department of Finance and Administration directly from the purchaser under § 26-52-510.
1. On and after the effective date of a local sales and use tax imposed under this chapter, the Secretary of the Department of Finance and Administration shall perform all functions incidental to the administration, collection, enforcement, and operation of the local sales and use tax.
2. In addition to the state gross receipts tax and compensating tax, the secretary shall collect the additional tax under this chapter on the receipts from the sale at retail or on the sale price or lease or rental price on the storage, use, distribution, or other consumption of all taxable items and services subject to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
3. 1. The local sales and use tax imposed under this chapter and the tax imposed under the gross receipts tax and compensating tax shall be collected together and reported upon the forms and under the administrative rules that are prescribed by the secretary and that are not inconsistent with this chapter.
  2. Each vendor who is liable for one (1) or more sales or use taxes levied under this chapter, the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., shall report a combined city and county sales tax and a combined city and county use tax on his or her sales and use tax report.
  3. The combined city sales tax or county sales tax is equal to the sum of all sales taxes levied by a city or county under this chapter and the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.
  4. The combined city or county use tax is equal to the sum of all use taxes levied by a city or county under this chapter and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  5. This subsection applies only to a tax collected by the secretary.
4. On and after the effective date of an ordinance to abolish a local sales and use tax in any levying entity, the secretary shall comply with the ordinance under this chapter.
1. A local sales and use tax levied under this chapter applies to sales of items and services sold by a business and shall be administered under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., and the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
2. When a direct pay permit holder purchases tangible personal property or taxable services either from an Arkansas vendor or an out-of-state vendor for use, storage, consumption, or distribution in Arkansas, the permit holder shall accrue and remit the local sales and use tax, if any, under the sourcing rules in §§ 26-52-521 and 26-52-522.
1. 1. 1. The Treasurer of State shall transmit to the treasurer or financial officer of each levying entity the levying entity's share of local sales and use taxes collected under this chapter.
    2. Transmittals required under this chapter shall be made at least monthly in each state fiscal year.
    3. Funds transmitted under this chapter may be used by the levying entity for any purpose authorized under this chapter.
  2. Before transmitting the funds, the Treasurer of State shall deduct three percent (3%) of the sum collected from each levying entity during the period as a charge by the state for its services specified in this chapter, and the amount deducted shall be deposited by the Treasurer of State to the credit of the account of the Constitutional Officers Fund and the State Central Services Fund.
2. 1. 1. The Treasurer of State may retain in the suspense account of any levying entity a portion of the levying entity's share of the local sales and use tax collected under this chapter.
    2. A balance retained in the suspense account shall not exceed five percent (5%) of the amount remitted to the levying entity.
  2. The Treasurer of State may make refunds from the suspense account of any levying entity:
    1. For overpayments made to the account after the refunds have been approved by the Secretary of the Department of Finance and Administration; and
    2. To redeem dishonored checks and drafts deposited to the credit of the suspense account of the levying entity.
3. 1. When any city or county adopts a local sales and use tax and then abolishes the tax, the Treasurer of State shall retain in the suspense account of the levying entity for a period of one (1) year five percent (5%) of the final remittance to the levying entity at the time of termination of collection of the tax within the levying entity to cover possible refunds for overpayment of the tax and to redeem dishonored checks and drafts deposited to the credit of the account.
  2. 1. After one (1) year has elapsed after the effective date of abolishment of the local sales and use tax, the Treasurer of State shall:
      1. Remit the balance of the account to the levying entity; and
      2. Close the account.
    2. A refund shall not be allowed after the one-year period under subdivision (c)(2)(A) of this section has lapsed and the account is closed.
1. The procedures and penalties used by the Secretary of the Department of Finance and Administration in enforcing a local sales and use tax imposed under this chapter shall be the same as for the state gross receipts tax and compensating tax unless otherwise provided in this chapter.
2. 1. When property is seized by the secretary under any statute authorizing seizure of property of a taxpayer who is delinquent in payment of the taxes imposed by the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and when the taxpayer is also delinquent in payment of any local sales and use tax imposed under this chapter, the secretary shall sell sufficient property to pay the delinquent local sales and use taxes and penalties due to any levying entity under this chapter in addition to the amount required to pay any taxes due to the state under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.
  2. The proceeds of a sale under subdivision (b)(1) of this section shall be applied first to all sums due to the state, and the remainder, if any, shall be applied to all sums due to the levying entity.
1. 1. 1. Money reported as local sales and use taxes that was collected in local taxing jurisdictions that is not immediately identifiable and money collected in local jurisdictions that do not have a local sales and use tax shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
    2. When a local tax jurisdiction is identified for money that has been deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes, the money shall be transferred to the Local Sales and Use Tax Trust Fund.
    3. If the total amount in the Identification Pending Trust Fund for Local Sales and Use Taxes exceeds fifty thousand dollars ($50,000), the Treasurer of State shall transfer any amount in excess of fifty thousand dollars ($50,000) to general revenues.
  2. 1. 1. Money reported as local sales and use taxes that was collected by an out-of-state vendor and that is not identifiable shall be deposited into the Identification Pending Trust Fund for Local Sales and Use Taxes.
      2. Any funds deposited under subdivision (a)(2)(A)(i) of this section shall not be included for computation of transfer to general revenue in subdivision (a)(1) of this section.
    2. The Treasurer of State shall distribute unidentified local sales and use taxes collected by out-of-state vendors to the county treasurers and city treasurers as determined by their proportionate share of distribution from the Local Sales and Use Tax Trust Fund on a monthly basis.
2. 1. The Treasurer of State shall review the flow of moneys through the Local Sales and Use Tax Trust Fund in the State Treasury for the purpose of estimating the amount of the moneys that may be surplus to the immediate requirements of the Local Sales and Use Tax Trust Fund.
  2. 1. After making an estimate under subdivision (b)(1) of this section, the Treasurer of State shall invest the estimated surplus amount in certificates of deposit issued by any financial institution located in the state.
    2. All interest income derived from the certificates of deposit shall be credited as trust fund income to the Local Sales and Use Tax Trust Fund.
  3. The Treasurer of State shall transmit monthly to the county treasurers and city treasurers their proportionate share of the interest derived from the investment of the Local Sales and Use Tax Trust Fund under this subsection.
1. A sales and use tax levied under this chapter shall be levied and collected only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of:
  1. Motor vehicles;
  2. Aircraft;
  3. Watercraft;
  4. Modular homes;
  5. Manufactured homes; or
  6. Mobile homes.
2. 1. 1. For a taxpayer not subject to the levy of a use tax on taxable services or tangible personal property brought into the state for storage until the tangible personal property is subsequently initially used in the state, the use tax portion of the local sales and use tax authorized under this chapter shall be computed on each purchase of the tangible personal property by the taxpayer as if all the tangible personal property was subject upon purchase to the use tax portion of the local sales and use tax.
    2. However, the use tax portion of the local sales and use tax authorized under this chapter shall be computed only on the first two thousand five hundred dollars ($2,500) of gross receipts, gross proceeds, or sales price on the sale of:
      1. Motor vehicles;
      2. Aircraft;
      3. Watercraft;
      4. Modular homes;
      5. Manufactured homes; or
      6. Mobile homes.
  2. The use tax portion of the local sales and use tax computed under subdivision (b)(1) of this section shall be aggregated on a monthly basis, and the aggregate monthly amount shall be divided by the sum of the total purchases of the tangible personal property on which the use tax portion of the local sales and use tax is computed, and the quotient shall be multiplied by the amount of the taxpayer's tangible personal property subsequently initially used and subject to levy of the use tax portion of the local sales and use tax within the city or county during the month for which the monthly aggregate tax figure was computed, and the product shall be the amount of the use tax portion of the local sales and use tax liability for the taxpayer for the month computed.
1. All or a specific portion of the local sales and use tax under this chapter may be pledged to bonds issued under §§ 14-164-301 — 14-164-340.
2. If pledged under the Local Government Bond Act of 1985, § 14-164-301 et seq., §§ 14-164-337 and 14-164-339 apply to the disposition of the revenues from local sales and use tax so pledged.
3. The local sales and use tax may not be repealed, abolished, or reduced while any bonds secured by a pledge of the local sales and use tax are outstanding.

ARTICLE XI Effect on Other Laws and Jurisdiction

Nothing in this compact shall be construed to:

ARTICLE XII Construction and Severability

This compact shall be liberally construed so as to effectuate the purposes thereof. The provisions of this compact shall be severable and if any phrase, clause, sentence, or provision of this compact is declared to be contrary to the constitution of any state or of the United States or the applicability thereof to any government, agency, person, or circumstance is held invalid, the validity of the remainder of this compact and the applicability thereof to any government, agency, person, or circumstance shall not be affected thereby. If this compact shall be held contrary to the constitution of any state participating therein, the compact shall remain in full force and effect as to the remaining party states and in full force and effect as to the state affected as to all severable matters.

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