Opinion ID: 2462927
Heading Depth: 1
Heading Rank: 2

Heading: Sale For Resale

Text: For its second point, the appellant asserts the items are exempt as sales for resale. Arkansas Code Ann. § 26-52-401 provides in part: There is specifically exempted from the tax imposed by this act the following: (12)(A) Gross receipts or gross proceeds derived from sales for resale to persons regularly engaged in the business of reselling the articles purchased, whether within or without the state if the sales within the state are made to persons to whom sales tax permits have been issued as provided in § 26-52-202. (B) Goods, wares, merchandise, and property sold for use in manufacturing, compounding, processing, assembling, or preparing for sale can be classified as having been sold for the purposes of resale or the subject matter of resale only in the event the goods, ware, merchandise, or property becomes a recognizable integral part of the manufactured, compounded, processed, assembled, or prepared products.... The trial court found the appellant did not possess an Arkansas retail sales and use permit, and, therefore, the purchases were not exempt as a sale for resale. On appeal, the appellant submits it was not required to hold a permit because it is exempted from the sales tax by Ark.Code Ann. § 26-52-401(13). Because we hold the items in question are not exempt under § 26-52-401(13), in order to claim the sale for resale exemption, the appellant is required to hold a retail sales permit.