Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
GROSS RECEIPTS TAX RULES
Rule 006.05.06-005-GR-43 - EXEMPTIONS FROM TAX - COTTON GIN BALING MATERIALS, AGRICULTURAL SEED, AND TOMATO TWINE

A. The gross receipts or gross proceeds derived from the sale of bagging, packaging, and tie materials sold to, and used by, cotton gins in Arkansas for packaging and tying, or for packaging or tying baled cotton in Arkansas are exempt from the tax. The gross receipts or gross proceeds derived from the sale of twine which is used in production of tomato crops in Arkansas are exempt from the tax.

B. The gross receipts or gross proceeds derived from the sale of cotton, seed cotton, lint cotton, or baled cotton, whether the cotton is compressed or not, are exempt from this tax.

C. The gross receipts or gross proceeds derived from the sale of cotton seed in its original condition are exempt from the tax.

D. The gross receipts or gross proceeds derived from the sale of seed to be used in the commercial production of any agricultural product, or in the commercial production of any agricultural seed are exempt from the tax. Also, the gross receipts or gross proceeds derived from the sale of seedlings used in the commercial production of timber are exempt from tax. For purposes of this subsection the term "commercial production" means that the purchaser of the seed or seedling is engaged in the business of growing agricultural products, including the production of timber.

E. The term "agricultural" means operations engaged in for the production of food, fiber or timber, sod, or nurseryman products.