Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 52 - GROSS RECEIPTS TAX (§§ 26-52-101 — 26-52-1601) › Subchapter 3 - IMPOSITION OF TAX (§§ 26-52-301 — 26-52-324) › Section 26-52-319 - Natural gas, electricity, and coal used by manufacturers - Definition

(a)
(1)
(A)
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, electricity, and coal to a manufacturer for use directly in the actual manufacturing process.
(B)
However, the sale of natural gas, electricity, and coal 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, the temporary excise tax of one-half percent (1/2%) levied in Arkansas Constitution, Amendment 91, and the excise tax of one-half percent (1/2%) levied in Arkansas Constitution, Amendment 101.
(2)
The taxes levied in this subsection shall be distributed as follows:
(A)
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;
(B)
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
(C)
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)
(A)
The excise tax levied in this section applies only to natural gas, electricity, and coal sold for use directly in the actual manufacturing process.
(B)
Natural gas, electricity, and coal 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.
(b)
As used in this section, "manufacturer" means a:
(1)
Manufacturer classified within sectors 31 - 33 or code 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.
(c)
(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 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.
(d)
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.
(e)
Before the sale of natural gas, electricity, or coal at the reduced excise tax rate levied in this section, the secretary may require a seller of natural gas, electricity, or coal to obtain a certificate from the consumer, in the form prescribed by the secretary, certifying that the manufacturer is eligible to purchase natural gas, electricity, and coal at the reduced excise tax rate.
(f)
The secretary shall promulgate rules for the proper administration of this section.
(g)
The gross receipts or gross proceeds derived from the sale of natural gas, electricity, and coal to a manufacturer shall continue to be subject to:
(1)
The excise taxes levied under the Arkansas Constitution; and
(2)
All municipal and county gross receipts taxes.
(h)
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, electricity, and coal used in manufacturing or for other purposes that are otherwise provided by law shall continue in effect.
Amended by Act 2021, No. 915,§ 1, eff. 7/1/2021.
Amended by Act 2019, No. 910,§ 3842, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 3841, eff. 7/1/2019.
Amended by Act 2013, No. 1411,§ 1, eff. 7/1/2014.
Acts 2007, No. 185, § 1; 2009, No. 655, § 15; 2009, No. 691, § 1; 2009, No. 695, § 1; 2011, No. 754, § 2; 2011, No. 983, § 7.