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 53 - COMPENSATING OR USE TAXES (§§ 26-53-101 — 26-53-303) › Subchapter 1 - ARKANSAS COMPENSATING TAX ACT OF 1949 (§§ 26-53-101 — 26-53-150) › Section 26-53-102 - Definitions

As used in this subchapter:
(1)
"Alcoholic beverage" means a beverage that is suitable for human consumption and contains five-tenths of one percent (0.5%) or more of alcohol by volume;
(2)
(A)
"Bundled transaction" means a retail sale of two (2) or more products, except real property and services to real property, in which:
(i)
The products are otherwise distinct and identifiable; and
(ii)
The products are sold for one (1) nonitemized price.
(B)
"Bundled transaction" does not include the sale of any product in which the sales price varies or is negotiable based on the selection by the purchaser of the products included in the transaction.
(C)
The Department of Finance and Administration shall promulgate rules to implement this subdivision (2);
(3)
(A)
"Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars, drops, or pieces.
(B)
"Candy" shall not include a preparation containing flour and shall require no refrigeration;
(4)
"Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:
(A)
Contains one (1) or more of the following dietary ingredients:
(i)
A vitamin;
(ii)
A mineral;
(iii)
An herb or other botanical;
(iv)
An amino acid;
(v)
A dietary substance for use by humans to supplement the diet by increasing the total dietary intake; or
(vi)
A concentrate, metabolite, constituent, extract, or combination of any ingredient described in this subdivision (4)(A) and is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in that form, is not represented as conventional food and is not represented for use as a sole item of a meal or of the diet; and
(B)
Is required to be labeled as a dietary supplement, identifiable by the "Supplement Facts" box found on the label and as required pursuant to
21 C.F.R. § 101.36
, as in effect on January 1, 2007;
(5)
"Digital audio works" means works that result from the fixation of a series of musical, spoken, or other sounds, including ringtones;
(6)
"Digital audio-visual works" means a series of related images that, when shown in succession, impart an impression of motion, together with accompanying sounds, if any;
(7)
"Digital books" means works that are generally recognized in the ordinary and usual sense as "books";
(8)
"Digital code" means a code that:
(A)
Provides a purchaser with a right to obtain one (1) or more specified digital products; and
(B)
May be obtained by any means, including email or tangible means, regardless of its designation as a song code, video code, or book code;
(9)
(A)
"End user" means a person who purchases specified digital products or the code for specified digital products for his or her own use or for the purpose of giving away the product or code.
(B)
"End user" does not include a person who receives by contract a product transferred electronically for further commercial broadcast, rebroadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution, or exhibition of the product, in whole or in part, to another person or persons;
(10)
(A)
"Food" and "food ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.
(B)
"Food" and "food ingredients" do not include candy, a soft drink, an alcoholic beverage, tobacco, or a dietary supplement;
(11)
"In this state" or "in the state" or "within this state" means within the exterior limits of the State of Arkansas and includes all territory within those limits owned by or ceded to the United States of America;
(12)
"Motor vehicle" means a vehicle that is self-propelled and is required to be registered for use on the highway;
(13)
"Person" means any individual, partnership, limited liability company, limited liability partnership, corporation, estate, trust, fiduciary, or any other legal entity;
(14)
"Prepared food" means:
(A)
Food sold in a heated state or heated by the seller;
(B)
Two (2) or more food ingredients mixed or combined by the seller for sale as a single item; or
(C)
(i)
Food sold with an eating utensil provided by the seller, including a plate, knife, fork, spoon, glass, cup, napkin, or straw.
(ii)
As used in subdivision (14)(C)(i) of this section, "plate" does not include a container or packaging used to transport the food;
(15)
(A)
"Purchase" means the sale of tangible personal property, specified digital products, a digital code, or taxable services by a vendor to a person for the purpose of storage, use, distribution, or consumption in this state.
(B)
(i)
"Purchase" also includes any withdrawal of tangible personal property, specified digital products, or a digital code from a stock or reserve maintained outside of the state by a person and subsequently brought into this state and thereafter stored, consumed, distributed, or used by that person or by any other person.
(ii)
In such an event, the tax shall be computed on the value of the tangible personal property, specified digital products, or digital code at the time it is brought into this state.
(C)
No tax shall be computed to the extent that a withdrawal consists of carbonaceous materials such as petroleum coke or carbon anodes that are to be directly used or consumed in the electrolytic reduction process of producing tangible personal property for ultimate sale at retail;
(16)
"Purchaser" means a person to whom a sale of tangible personal property, specified digital products, or a digital code is made or to whom a taxable service is furnished;
(17)
"Ringtones" means digitized sound files that:
(A)
Are downloaded onto a device; and
(B)
May be used to alert the customer with respect to a communication;
(18)
(A)
"Sale" means a transfer, barter, or exchange of the title or ownership of tangible personal property, specified digital products, a digital code, or taxable services or the right to use, store, distribute, or consume the tangible personal property, specified digital products, a digital code, or taxable services for a consideration paid or to be paid in installments or otherwise and includes any transaction whether called leases, rentals, bailments, loans, conditional sales, or otherwise, notwithstanding that the title or possession of the property, or both, is retained for security.
(B)
For the purpose of this subchapter, 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
;
(19)
(A)
"Sales price" or "purchase price" means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property, specified digital products, a digital code, or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
(i)
The seller's cost of the property sold;
(ii)
The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;
(iii)
A charge by the seller for any service necessary to complete the sale, other than a delivery or installation charge;
(iv)
Delivery charge;
(v)
(a)
Installation charge.
(b)
However, installation charges shall not be included in the sales price if they are not a specifically taxable service under the Arkansas Gross Receipts Act of 1941, §
26-52-101
et seq., or this subchapter and the installation charges have been separately stated on the invoice, billing, or similar document given to the purchaser; or
(vi)
Credit for any trade-in.
(B)
"Sales price" or "purchase price" does not include:
(i)
A discount, including cash, term, or a coupon that is not reimbursed by a third party and that is allowed by a seller and taken by a purchaser on a sale;
(ii)
Interest, financing, and carrying charges from credit extended on the sale of tangible personal property, specified digital products, a digital code, or services if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and
(iii)
Any tax legally imposed directly on the consumer that is separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(20)
"Seller" means a person making a sale, lease, or rental of tangible personal property, specified digital products, a digital code, or services;
(21)
(A)
"Soft drink" means a nonalcoholic beverage that contains natural or artificial sweeteners.
(B)
"Soft drink" does not include a beverage that contains milk or milk products, soy, rice, or similar milk substitutes, or that is greater than fifty percent (50%) of vegetable or fruit juice by volume;
(22)
"Specified digital products" means the following when transferred electronically:
(A)
Digital audio works;
(B)
Digital audio-visual works; and
(C)
Digital books;
(23)
"Storage" means any keeping or retention in this state of tangible personal property, specified digital products, a digital code, or taxable services purchased from a vendor for any purpose except sale or subsequent use solely outside this state;
(24)
(A)
"Tangible personal property" means personal property that may be seen, weighed, measured, felt, or touched or is in any other manner perceptible to the senses.
(B)
"Tangible personal property" includes electricity, water, gas, steam, and prewritten computer software.
(C)
"Tangible personal property" does not include specified digital products or digital codes;
(25)
"Taxable service" means a service that is taxable under this subchapter or the Arkansas Gross Receipts Act of 1941, §
26-52-101
et seq.;
(26)
"Taxpayer" means any person remitting the tax or who should remit the tax or should have remitted the tax levied by this subchapter;
(27)
"Tobacco" means a cigarette, cigar, chewing or pipe tobacco, or any other item that contains tobacco;
(28)
"Transferred electronically" means obtained by the purchaser by means other than tangible storage media;
(29)
(A)
"Use", with respect to tangible personal property, specified digital products, or a digital code, means the exercise of any right or power over tangible personal property, specified digital products, or a digital code incident to the ownership or control of that tangible personal property, specified digital product, or digital code except that it does not include the sale of that tangible personal property, specified digital product, or digital code in the regular course of business.
(B)
With respect to a taxable service, "use" means the privilege of using the service, enjoyment of the service, or the first act within this state by which the purchaser takes or assumes dominion or control over the service or the tangible personal property, specified digital products, or digital code upon which the service was performed; and
(30)
(A)
(i)
"Vendor" means a person engaged in making sales of tangible personal property, specified digital products, digital codes, or taxable services by mail order, by advertising, or by agent, by peddling tangible personal property, specified digital products, a digital code, or taxable services, by soliciting, or by taking orders for such sales for storage, use, distribution, or consumption in this state.
(ii)
"Vendor" includes all salespersons, solicitors, hawkers, representatives, consignees, peddlers, or canvassers as agents of the dealers, distributors, consignors, supervisors, principals, or employers under whom they operate or from whom they obtain the tangible personal property, specified digital products, digital code, or taxable services sold by them.
(B)
Regardless of whether a person is making sales on his or her own behalf or on behalf of dealers, distributors, consignors, supervisors, principals, or employers, the person must be regarded as a vendor, and the dealers, distributors, consignors, supervisors, principals, or employers must be regarded as vendors for purposes of this subchapter.
Amended by Act 2019, No. 910,§ 3895, eff. 7/1/2019.
Amended by Act 2017, No. 141,§ §44-47, eff. for tax years beginning on and after 1/1/2018.
Acts 1949, No. 487, § 4; 1961, No. 43, §§ 1, 2; 1983, No. 829, § 1; 1985, No. 999, § 1; A.S.A. 1947, §§ 84-3104, 84-3104n; Acts 1995, No. 1160, § 22; 2003, No. 1273, § 12; 2007, No. 181, § 31; 2009, No. 384, §§ 11, 12; 2009, No. 655, § 28.