Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 8.26-51-702 - Unprotected and Protected Activities

Current through Register Vol. 49, No. 6, June, 2024
Examples of activities presently considered by the
					 Department to be either protected or unprotected are as follows:
A. UNPROTECTED ACTIVITIES:
The following in-state activities, assuming they are not of
					 a "de minimis" level, are not considered to be solicitation of orders or
					 ancillary thereto or otherwise protected under
					 15 U.S.C. §
												381 and will cause otherwise protected sales
					 to establish nexus:
1. Making repairs
				  or providing maintenance or service to the property sold or to be
				  sold;
2. Collecting current or
				  delinquent accounts, whether directly or by third parties, through assignment
				  or otherwise;
3. Investigating
				  credit worthiness;
4. Installation
				  or supervision of installation after shipment and delivery;
5. Conducting training courses, seminars or
				  lectures for people other than those involved only in solicitation;
6. Providing any kind of technical assistance
				  or service including, but not limited to, engineering assistance or design
				  service, when one of the purposes thereof is other than the facilitation of the
				  solicitation of orders;
7.
				  Investigating, handling, or otherwise assisting in resolving customer
				  complaints;
8. Approving or
				  accepting orders;
9. Repossessing
				  property;
10. Securing deposits on
				  sales;
11. Picking up or replacing
				  damaged or returned property;
12.
				  Hiring, training, or supervising personnel, other than personnel involved only
				  in solicitation;
13. Using agency
				  stock checks or any other similar instruments or processes by which sales are
				  made within Arkansas by sales personnel;
14. Maintaining a sample or display room in
				  excess of two weeks (14 days) at any one location within Arkansas during the
				  tax year;
15. Carrying samples for
				  sale or for distribution in any manner in exchange for valuable
				  consideration;
16. Owning, leasing,
				  using or maintaining any of the following facilities or property within
				  Arkansas:
a. Repair shop;
b. Parts department;
c. Any kind of office (other than an in-home
				  office as described and permitted under 8.
				  26-51-702(A)(18)
				  and 8.
				  26-51-702(B)(2)
				  );
d. Warehouse;
e. Meeting place for the taxpayer's
				  directors, officers, or employees;
f. Stock of goods (other than samples for
				  sales personnel or that are used entirely ancillary to solicitation);
g. Telephone answering service that is
				  publicly attributed to the taxpayer or to employees or agent(s) of the taxpayer
				  in their representative capacity. For example, a listing in a telephone
				  directory would constitute a "public" attribution;
h. Mobile stores, such as vehicles with
				  drivers who are sales personnel making sales from the vehicles;
i. Real property or fixtures to real property
				  of any kind;
17.
				  Consigning a stock or inventory of goods or other tangible personal property to
				  any person, including an independent contractor, for sale to
				  customers;
18. Maintaining, by any
				  employee or other representative, an office or place of business of any kind.
				  However, an "in-home" office will not cause a loss of protection if such an
				  office is located within the residence of the employee or representative and:
(a) is not publicly attributed to the
				  taxpayer or to the employee or representative of the taxpayer in an employee or
				  representative capacity; and
(b)
				  the use of such office is limited to soliciting and receiving orders from
				  customers, for transmitting such orders outside of Arkansas for acceptance or
				  rejection by the taxpayer, and for such other activities that are protected
				  under
				  15 U.S.C. §
													381 or under 8.
				  26-51-702(B)
				  of this regulation.
A telephone listing or other public listing within the
					 state for the taxpayer or for an employee or representative of the taxpayer in
					 such capacity or other indications through advertising or business literature
					 that the taxpayer or its employees or representative can be contacted at a
					 specific address within Arkansas shall normally be determined as the taxpayer
					 maintaining within Arkansas an office or place of business attributable to the
					 taxpayer or to its employee or representative in a representative capacity.
					 However, the normal distribution and use of business cards and stationery
					 identifying the employee's or representative's name, address, telephone and fax
					 numbers and affiliation with the taxpayer shall not, by themselves, be
					 considered as advertising or otherwise publicly attributing an office to the
					 taxpayer or its employee or representative.
The maintenance of any office or other place of business in
					 Arkansas that does not strictly qualify as an "in-home" office as described
					 above shall, by itself, cause the loss of protection under this
					 regulation.
For the purpose of this regulation, it is not relevant
					 whether the taxpayer pays directly, indirectly, or not at all for the cost of
					 maintaining such in-home office;
19. Entering into franchising or licensing
				  agreements, selling or otherwise disposing of franchises and licenses, or
				  selling or otherwise transferring tangible personal property pursuant to such
				  franchise or license by the franchisor or licensor to its franchisee or
				  licensee within Arkansas;
20.
				  Shipping or delivering goods into Arkansas by means of private vehicle, rail,
				  water, air or other carrier, regardless of whether a shipment or delivery fee
				  or other charge is imposed, directly or indirectly, upon the purchaser;
				  or
21. Conducting any activity in
				  Arkansas not listed in paragraph "B" below which is not entirely ancillary to
				  requests for orders, even if such activity helps to increase purchases (such as
				  some marketing and promotional activities).