Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › Rule 006.05.07-003 - Rule 2007-3: Special Rules for Sales of Food and Food Ingredients and Prepared Food

Current through Register Vol. 49, No. 6, June, 2024
A. GENERAL
			 INFORMATION.
Effective July 1, 2007, the gross receipts or gross proceeds
				derived from the sale of food and food ingredients is taxed at a reduced state
				sales and use tax rate of three percent (3%). The gross receipts or gross
				proceeds derived from the sale of prepared food, alcoholic beverages, dietary
				supplements, and tobacco are subject to the full state sales and use tax rate
				of six percent (6%). The sale of food and food ingredients continues to be
				subject to the full local sales and use tax rate.
B. DEFINITIONS.
1. "Alcoholic beverage" means a beverage that
			 is suitable for human consumption and contains one-half of one percent (0.5%)
			 or more of alcohol by volume.
2.
			 "Dietary supplement" means any product, other than tobacco, intended to
			 supplement the diet that contains one (1) or more of the following dietary
			 ingredients: a vitamin; a mineral; an herb or other botanical; an amino acid; a
			 dietary substance for use by humans to supplement the diet by increasing the
			 total dietary intake; or a concentrate, metabolite, constituent, extract, or
			 combination of any ingredient described herein and is intended for ingestion in
			 tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended
			 for ingestion in such a form, is not represented as conventional food and is
			 not represented for use as a sole item of a meal or of the diet. A dietary
			 supplement is required to be labeled as a dietary supplement, identifiable by
			 the "Supplemental Facts" box found on the label.
3. "Food and food ingredients" means
			 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. Such substances are food and
			 food ingredients and taxed at the reduced state sales and use tax rate unless
			 otherwise excluded. Food and food ingredients does not include an alcoholic
			 beverage, tobacco, a dietary supplement, or prepared food.
4. "Prepared food" means food sold in a
			 heated state or heated by the seller (see Subdivision (C)(1)); food consisting
			 of two (2) or more food ingredients mixed or combined by the seller for sale as
			 a single item (see Subdivision(C)(2)); or food sold with an eating utensil
			 provided by the seller (see Subdivision (C)(3)). Prepared food does not include
			 food that is only cut, repackaged, or pasteurized by the seller, or eggs, fish,
			 meat, poultry, and foods containing these raw animal foods requiring cooking by
			 the consumer to prevent food-borne illnesses as recommended by the Food and
			 Drug Administration.
5. "Seller"
			 means every person making a sale. For the purposes of this rule, seller means
			 the entity that sells the product to the end consumer.
6. "Tobacco" means cigarettes, cigars,
			 chewing or pipe tobacco, or any other item that contains tobacco.
7. "Utensil" means an implement used to serve
			 or consume food or drink including a plate, knife, fork, spoon, glass, cup,
			 napkin, or straw. "Plate" does not include a container or packaging used to
			 transport the food, such as a paper bag or foam used by a grocery store to
			 shrink-wrap meat or cheese. A utensil does not include an item provided only
			 for sanitary purposes, such as wax tissue, and not for the purposes of
			 consumption.