Chemicals used before or after the manufacturing or pollution control process, or applied to equipment and not the product itself are taxable . Anti-bacterial or sanitation chemicals used on or in machines during the manufacturing process. Any solution, lubricant, or fuel that is used on machinery and not the product. The State of Arkansas through the Department of Finance and Administration is participating in a national initiative to adopt a uniform system of sales and use tax administration. Currently, states differ widely in the definition of taxable sales and services, exemptions, rate structures, reporting formats, remittance requirements and local taxation methods.
Nexus is created when a company has a physical presence in a state through property or employees.
Twenty-nine states have multiple local tax rates. The committee has developed standards for a software program that could be used by all retail sellers to calculate and remit sales tax to each state and local taxing authority. The database utilized by the vendor would be maintained by each state. Vendors would be held harmless for errors or omissions arising from the use of the system. Legislation may be introduced in the 2001 Arkansas legislative session to adopt the Streamline Sales Tax model.