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 5 - RETURNS AND REMITTANCE OF TAX (§§ 26-52-501 — 26-52-523) › Section 26-52-517 - Exemption certificates - Definition

(a)
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.
(b)
(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.
(c)
(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.
(d)
(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.
(e)
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.
(f)
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:
(A)
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
(B)
The Department of Finance and Administration provides an exemption certificate that clearly and affirmatively indicates that the claimed exemption is not available in Arkansas.
(g)
(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)
(A)
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.
(B)
As used in this subsection, "good faith" means that the seller obtains a certificate that claims an exemption that:
(i)
Was statutorily available on the date of the transaction in the jurisdiction where the transaction is sourced;
(ii)
Could be applicable to the item being purchased; and
(iii)
Is reasonable for the purchaser's type of business.
Amended by Act 2019, No. 910,§ 3884, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 3883, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 3882, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 3881, eff. 7/1/2019.
Amended by Act 2017, No. 141,§ 37, eff. for tax years beginning on and after 1/1/2018.
Amended by Act 2013, No. 1135,§ 15, eff. 8/16/2013.
Amended by Act 2013, No. 1135,§ 14, eff. 8/16/2013.
Acts 1995, No. 358, § 1; 2007, No. 181, § 27; 2011, No. 291, §§ 12, 13.