Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › Rule 006.05.92-005 - Gross Receipts Tax Regulations

Current through Register Vol. 49, No. 6, June, 2024
Pursuant to the authority vested in the Commissioner of
				Revenues by the following enactment of the Arkansas General Assembly:
1. Act 131 of 1935;
2. Act 386 Of 1941;
3. Act 78 of 1949;
4. Act 265 of 1963;
5. Act 5 of 1968;
6. Act 214 of 1971;
7. Act 68 of 1973;
8. Act 516 of 1973;
9. Act 800 of 1975;
10. Act 54 of 1973;
11. Act 109 of 1979; and
12. Act 401 of 1979, as amended; and in
			 compliance with §3 of Act 434 of 1967 and Act 583 of 1973, the Commissioner of
			 Revenues of the Arkansas Department of Finance and Administration, with the
			 approval of the Governor, . does hereby promulgate the following rules and
			 regulations for the enforcement and administration of Ark. Code Ann. §
								26-52-101 et
			 seq.
GR-1.
EFFECTIVE DATE:
All regulations previously promulgated by the Commissioner of Revenues
			 for purposes of enforcing or implementing the Arkansas Gross Receipts Tax Act
			 of 1941 (as amended) are hereby specifically repealed as the effective date of
			 these regulations. These regulations shall be effective from and after
			 midnight, November 1, 1992.
GR-2.
PURPOSE OF THE REGULATIONS:
The following regulations are
			 promulgated to implement and clarify the Gross Receipts Tax Act (§
								26-52-101 et
			 seq.), and short term rental tax statutes (§§
								26-52-310
			 and
			 26-52-311
			 ). All persons affected by or relying upon these regulations are advised to
			 read them in their entirety because the meaning of the provisions of one
			 regulation may depend upon the provisions contained in another
			 regulation.
GR-3.
DEFINITIONS:
For purposes of these regulations, unless otherwise
			 required by their context, the following definitions apply:
A. Commissioner: The term "Commissioner"
			 means and refers to the Commissioner of Revenues of the State of Arkansas, or
			 any of his duly authorized agents.
B. Sale: The term 'Sale" means any
			 transaction resulting in the transfer of either the title or possession, for a
			 services regardless of the manner, method, instrumentality or device by which
			 such transfer is accomplished. The term 'Sale" includes the exchange, barter,
			 lease or rental of tangible personal property or services. In the case of
			 leases or rentals of tangible personal property, the tax shall be paid on the
			 basis of rental or lease payments made to the lessor of such tangible personal
			 property during the term of the lease or rental; however, except for short term
			 rentals and rentals of motor vehicles for less than thirty (30) days, the tax
			 shall not apply to gross receipts or gross proceeds derived from leases or
			 rentals of tangible personal property upon which either the Arkansas gross
			 receipts tax or compensating tax was paid at the time of purchase of the
			 tangible personal property. (See GR-2 0)
A financing arrangement which only gives a lender a security
				interest in tangible personal property will not subject such lender to the tax,
				if, prior to such financing arrangement, either the Arkansas Gross Receipts or
				Compensating Tax has been paid on the purchase price of the tangible personal
				property by one of the parties to the financing arrangement.
C. Gross Receipts - Gross Proceeds:
(1) The term "Gross Receipts" or "Gross
			 Proceeds" means the total amount of consideration for the sale of tangible
			 personal property and such services as are herein provided for, whether the
			 consideration is in money or otherwise, without any deduction therefor on
			 account of the cost of the property sold, labor service performed, interest
			 paid by the retailer, losses or any expenses whatsoever, including vehicle
			 manufacturer or dealer rebates and federal luxury excise tax. Federal
			 manufacturer's excise taxes are not a part of the "Gross Receipts" or "Gross
			 Proceeds" if the excise taxes are separately stated or separately billed to the
			 consumer.
(2) The term "Gross
			 Proceeds" or "Gross Receipts" includes the value of any goods, wares,
			 merchandise, or property withdrawn or used from the established business or
			 from the stock in trade of the established reserves for consumption by or use
			 in such business, or for consumption or use by any other person. (See also
			 GR-18).
(3) The term "Gross
			 Receipts" or "Gross Proceeds" includes the value of any property taken in lieu
			 of or in addition to money as consideration for a sale.
D. Taxpayer: The term "Taxpayer" means any
			 person making a sale subject to or liable to remit the gross receipts tax or to
			 make a report for the purpose of claiming any exemption from payment of gross
			 receipts taxes.
E. Established
			 Business: The term "Established Business" means any business operated or
			 conducted by any person in a continuous manner for any length of time from an
			 established place or in an established manner.
F. Seller: The term 'Seller" is synonymous
			 with "vendor" and means every person making sales in an established business as
			 herein defined.
G. Consumer: The
			 term "Consumer" is synonymous with "user" or "customer" or "purchaser" and
			 means the person to whom a taxable sale is made, or to whom taxable services
			 are furnished or a person who consumes tangible personal property or services.
			 Contractors are deemed to be the consumers of all tangible personal property or
			 taxable services purchased by them in the performance of a contract. (See
			 GR-3L).
H. The term "Doing
			 Business" is synonymous with "Engaging in Business" and means any and all local
			 activity regularly and persistently pursued by a seller or seller's agents,
			 employees, or representatives, with the object of gain, profit, or advantage,
			 and which results in a sale, delivery, and/or the transfer of the possession of
			 any tangible personal property by the seller to the consumer, at or from any
			 point in Arkansas, whether from warehouse, store, office, storage point,
			 rolling store, motor vehicle, delivery conveyance, or by any method or device
			 under the control of seller effecting such local delivery, without regard to
			 the terms of sale with respect to point of acceptance of the order, point of
			 payment, or any other condition. "Doing Business" or "Engaging in Business", as
			 set out herein, is equally applicable to sellers of services which are subject
			 to the gross receipts tax.
I. The
			 term "Tangible Personal Property" means personal property which may be seen,
			 weighed, measured, felt, touched, or is in any other manner perceptible to the
			 senses.
J. The term "Machine" means
			 any device consisting of two or more resistant, relatively constrained parts,
			 which, by a certain predetermined intermotion, may serve to transmit and modify
			 force and motion so as to produce some given effect or to do some desired kind
			 of work. The term "Machinery" shall mean mechanical devices or combinations of
			 mechanical powers and devices purchased and used to perform some function and
			 produce a certain effect or result. Hand tools are not machinery. (See GR-55
			 E(5)).
K. The term "Person" means
			 and includes individuals, fiduciaries, corporations, partnerships, joint
			 ventures, associations mutual or otherwise, estates, trusts, receivers,
			 trustees appointed by any State or Federal Court, this State, any county, city,
			 municipality, school district, or any other political subdivision or
			 combination acting as a unit, in the plural or singular number.
L. The term "Contractor" shall mean any
			 person who contracts or undertakes to construct, manage or supervise the
			 construction, erection or substantial modification of any building or other
			 improvement or structure affixed to real property. Persons who construct items
			 of tangible personal property are not contractors. (See GR-21.)
M. Retailers Permit: "Retailers Permit" means
			 and refers to the retailers permit as required by Ark. Code Ann. §
									26-52-201.
N. As used in these regulations, the terms
			 'sales tax" and "gross receipts tax" are synonymous and mean the tax imposed by
			 Ark. Code Ann. §§
									26-52-301
			 and 302.