Current through Register Vol. 49, No. 9, September, 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).
B. PROTECTED ACTIVITIES:
The following in-state activities will not cause the loss
of protection for otherwise protected sales:
1. Soliciting orders for sales by any type of
advertising. However, other marketing and promotional activities conducted
within Arkansas can cause a loss of protection;
2. Soliciting of orders by an Arkansas
resident employee or representative of the taxpayer, so long as such person
does not maintain or use any office or other place of business in Arkansas
other than an "in-home" office as described in 8.
26-51-702(A)(18)
above;
3. Carrying samples and
promotional material only for display or for distribution without charge or
other valuable consideration;
4.
Furnishing and setting up display racks and advising customers on the display
of the taxpayer's products without charge or other valuable
consideration;
5. Providing
automobiles to sales personnel for their use in conducting protected
activities;
6. Passing orders,
inquiries and complaints on to the home office;
7. Missionary sales activities, which is the
solicitation of indirect customers for the taxpayer's goods. For example, a
manufacturer's solicitation of retailers to buy the manufacturer's goods from
the manufacturer's wholesale customers would be protected if such solicitation
activities are otherwise protected;
8. Coordinating shipment or delivery without
payment or other valuable consideration and providing information relating
thereto either prior or subsequent to the placement of an order;
9. Checking of customers' inventories without
a charge therefor (for reorder, but not for other purposes such as quality
control);
10. Maintaining a sample
or display room for two weeks (14 days) or less at any one location within
Arkansas during the tax year;
11.
Recruiting, training or evaluating sales personnel, including occasionally
using homes, hotels or similar places for meetings with sales personnel;
or
12. Owning, leasing, using or
maintaining personal property for use in the employee or representative's
"in-home" office or automobile, where the use of such personal property is
solely limited to the conducting of protected activities. As such, the use of
personal property such as a cellular telephone, facsimile machine, duplicating
equipment, personal computer and computer software in an "in-home" office or
automobile that is strictly limited to the conducting of protected solicitation
or activities entirely ancillary to such solicitation would be
protected.
