Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
1998-1 - Comprehensive Corporation Income Tax Regulations
Rule 26-51-303 - EXEMPT ORGANIZATIONS
Rule 1.26-51-303 - Definitions and Guidelines for Claiming Tax-Exempt Status

Universal Citation: AR Admin Rules 1.26-51-303

Current through Register Vol. 49, No. 9, September, 2024

"Corporation" shall mean an entity operating under articles of incorporation, being properly registered with Arkansas, and meeting the requirements of Section 303 for recognition of tax exempt status.

"Trust" shall mean an entity operating under a trust indenture or agreement.

A "cooperative association" is a group of individuals formed to participate in a productive enterprise, the profits being shared in accordance with the capital or labor contributed by each.

A "partnership" includes a syndicate, group, joint venture or other unincorporated organization operating under the terms and conditions of a partnership agreement.

"Association" shall mean an entity operating under articles of association, a constitution or other creating documents with a declaration or other evidence the organization was formed by adoption of the document by more than one person and having by-laws.

"Unrelated income" shall mean any income earned from activities carried on by the organization which is not substantially related to its exempt purposes.

"IRS Ruling Letter" shall mean an official notification by the Internal Revenue Service of acceptance of tax-exempt status of the organization.

Nonprofit corporations, unincorporated groups or associations and trusts shall be eligible to receive income tax-exempt status under ACA 26-51-303 or ACA 26-51-309 upon submitting proper documentation and application to the Arkansas Revenue Division, Corporation Income Tax Section, P.O. Box 919, Little Rock, Arkansas 72203-0919. The following information must be submitted for a determination of state income tax-exempt status:

A. Organizations with an IRS Ruling letter:

1. Copy of IRS Ruling letter;

2. Copy of pages 1 and 2 of IRS form 1023 or 1024;

3. Statement declaring Arkansas Code under which exempt.

B. Organizations without an IRS Ruling letter:

1. Arkansas form AR1023CT;

2. Copy of Articles of Incorporation, Articles of Association, Trust Indenture or Agreement;

3. Copy of By-laws.

Act 1147 of 1993, known as the Non-profit Corporation Act of 1993, adopted section 664 of the Internal Revenue Code as in effect on January 1, 1993, for the purpose of computing the tax liability of charitable remainder trusts and their beneficiaries. See ACA 26-51-309.

Any unrelated income of a nonprofit corporation operating in Arkansas as well as in other states shall be reported to the state in which it is earned. Any unrelated income attributable to Arkansas would be subject to Arkansas income tax.

Revocation of tax-exempt status shall be effective on the same date as the Internal Revenue Service revocation (if made) or upon notification to the taxpayer by the Arkansas Revenue Division upon investigation and discovery of sufficient grounds for revocation. Sufficient grounds for revocation shall mean any investigation in which it is determined that the organization is not operating in the manner under which it originally obtained exempt status.

Disclaimer: These regulations may not be the most recent version. Arkansas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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