Current through Register Vol. 49, No. 9, September, 2024
For purposes of these rules, unless otherwise required by
their context, the following definitions apply:
A. BUNDLED TRANSACTION.
1. "Bundled transaction" means a retail sale
of two (2) or more products, except real property and services to real
property, in which (i) the products are otherwise distinct and identifiable;
and (ii) the products are sold for one (1) non-itemized price.
2. Bundled transaction does not include the
sale of any product in which the sales price varies or is negotiable based on
the selection by the purchaser of the products included in the transaction.
(See GR-7 and GR- 93.)
B. COMMISSIONER. "Commissioner" means and
refers to the Commissioner of Revenue of the State of Arkansas, or any of his
duly authorized agents. For purposes of these rules, the terms "Commissioner"
and "Director" may be used interchangeably.
C. CONSUMER. "Consumer" is synonymous with
"user", "customer", or "purchaser" and means the person to whom a taxable sale
is made, or to whom taxable services are furnished. Contractors are deemed to
be the consumers of all tangible personal property or taxable services
purchased by them in the performance of a contract. See the definition of
"contractor" in this rule. Also, see GR 9.17 regarding the purchase of
materials by contractors performing taxable services.
D. CONTRACTOR. "Contractor" means any person
who contracts or undertakes to construct, manage or supervise the construction,
erection or substantial modification of any building or other improvement or
structure affixed to real property. Persons who construct items of tangible
personal property are not contractors. (See GR-21.)
E. DEPARTMENT. "Department" means and refers
to the Arkansas Department of Finance and Administration and its agents. For
purposes of these rules, the terms "Department" and "DFA" may be used
interchangeably.
F. DOING BUSINESS
OR ENGAGING IN BUSINESS. "Doing Business" is synonymous with "engaging in
business" and means any and all local activity regularly and persistently
pursued by a seller or seller's agents, employees, or representatives, with the
object of gain, profit, or advantage, and which results in a sale, delivery,
and/or the transfer of the possession of any tangible personal property by the
seller to the consumer, at or from any point in Arkansas, whether from
warehouse, store, office, storage point, rolling store, motor vehicle, delivery
conveyance, or by any method or device under the control of seller effecting
such local delivery, without regard to the terms of sale with respect to point
of acceptance of the order, point of payment, or any other condition. Doing
business, as set out herein, is equally applicable to sellers of services which
are subject to the gross receipts tax.
G. ESTABLISHED BUSINESS. "Established
Business" means any business operated or conducted by any person in a
continuous manner for any length of time from an established place or in an
established manner.
H. GROSS
RECEIPTS - GROSS PROCEEDS - SALES PRICE.
1.
"Gross receipts" or "gross proceeds" is synonymous with "sales price" and means
the total amount of consideration, including cash, credit, property, and
services, for which tangible personal property or services are sold, leased, or
rented, valued in money, whether received in money or otherwise. Sales price
includes consideration received by the seller from third parties as follows:
a. The seller actually receives the
consideration from a party other than the purchaser and the consideration is
directly related to a price reduction or discount on the sale;
b. The seller has an obligation to pass the
price reduction or discount through to the purchaser;
c. The amount of the consideration
attributable to the sale is fixed and determinable by the seller at the time of
the sale of the item to the purchaser; and
d. One of the following criteria is met:
(1) The purchaser presents a coupon,
certificate, or other documentation to the seller to claim a price reduction or
discount where the coupon, certificate, or documentation is authorized,
distributed, or granted by a third party with the understanding that the third
party will reimburse any seller to whom the coupon, certificate, or
documentation is presented;
(2) The
purchaser identifies himself or herself to the seller as a member of a group or
organization entitled to a price reduction or discount (a "preferred customer"
card that is available to any patron does not constitute membership in such a
group); or
(3) The price reduction
or discount is identified as a third party price reduction or discount on the
invoice received by the purchaser or on a coupon, certificate, or other
documentation presented by the purchaser. (See GR-18.)
2. The following cannot be
deducted from the sales price:
a. The seller's
cost of the property sold;
b. The
cost of materials used, labor or service cost, interest, any loss, any cost of
transportation to the seller, any tax imposed on the seller, and any other
expense of the seller;
c. Any
charge by the seller for any service necessary to complete the sale, other than
a delivery charge or an installation charge;
d. Delivery charge;
e. The value of exempt tangible personal
property given to the purchaser, if taxable and exempt tangible personal
property have been bundled together and sold by the seller as a single product
or piece of merchandise (see the definition of "bundled transaction" in this
rule and GR-93 for the treatment of bundled transactions); and
f. Credit for any trade-in unless
specifically provided by law.
3. A separately stated installation charge is
not part of the sales price and not taxable unless it is a specifically taxable
service.
4. Sales price does not
include the following:
a. A discount including
cash, term, or a coupon that is not reimbursed by a third party and that is
allowed by a seller and taken by a purchaser on a sale;
b. Interest, financing, or a carrying charge
from credit extended on the sale of tangible personal property or services, if
the amount is separately stated on the invoice, bill of sale, or similar
document given to the purchaser; and
c. Any tax legally imposed directly on the
consumer that is separately stated on the invoice, bill of sale, or similar
document given to the purchaser.
I. MACHINE. "Machine" means any device
consisting of two (2) or more resistant, relatively constrained parts, which,
by a certain predetermined intermotion, may serve to transmit and modify force
and motion so as to produce some given effect or to do some desired kind of
work. The term "machinery" shall mean mechanical devices or combinations of
mechanical powers and devices purchased and used to perform some function and
produce a certain effect or result. Hand tools are not machinery. (See
GR-55(F).)
J. PERSON. "Person"
means any individual, partnership, limited liability company, limited liability
partnership, corporation, estate, trust, fiduciary, or any other legal entity.
Person includes the state and any county, city, municipality, school district,
or any other political subdivision or combination acting as a unit, in the
plural or singular number.
K.
PREPARED FOOD. "Prepared food" means food sold in a heated state or heated by
the seller; food consisting of two (2) or more food ingredients mixed or
combined by the seller for sale as a single item; or food sold with an eating
utensil provided by the seller. Prepared food does not include food that is
only cut, repackaged, or pasteurized by the seller, or eggs, fish, meat,
poultry, and foods containing these raw animal foods requiring cooking by the
consumer to prevent food-borne illnesses as recommended by the U.S. Food and
Drug Administration.
L. RETAIL
PERMIT. "Retail permit" means and refers to the sales tax permit as required by
Ark. Code Ann. §
26-52-201.
M. SALE.
1.
"Sale" means any transaction resulting in the transfer of either the title or
possession, for a valuable consideration, of tangible personal property or
taxable services regardless of the manner, method, instrumentality, or device
by which such transfer is accomplished. Sale includes the exchange, barter,
lease, or rental of tangible personal property or taxable services, or the
sale, exchanging, or other disposition of admissions, dues, or fees to clubs,
places of amusement, or recreational or athletic events or for the privilege of
having access to or the use of amusement, athletic, or entertainment
facilities.
2. Sale does not
include the transfer of title to a vehicle by the vehicle owner to an insurance
company as a result of the settlement of a claim for damages to the
vehicle.
3. In the case of leases
or rentals of tangible personal property, including motor vehicles and
trailers, for less than thirty (30) days, the tax shall be paid on the basis of
rental or lease payments made to the lessor of such tangible personal property
during the term of the lease or rental regardless of whether Arkansas gross
receipts or compensating use tax was paid by the lessor at the time of the
purchase of the tangible personal property. In the case of leases or rentals of
tangible personal property, including motor vehicles and trailers, thirty (30)
days or more, the tax shall be paid on the basis of rental or lease payments
made to the lessor of such tangible personal property during the term of the
lease or rental unless Arkansas gross receipts or compensating use tax was paid
at the time of purchase of the tangible personal property. (See
GR-20.)
4. A financing arrangement
which only gives a lender a security interest in tangible personal property
will not subject such lender to the tax, if, prior to such financing
arrangement, either the Arkansas gross receipts or compensating use tax has
been paid on the purchase price of the tangible personal property by one of the
parties to the financing arrangement.
N. SALES PRICE. See GR-3(H).
O. SALES TAX - GROSS RECEIPTS TAX. "Sales
tax" and "gross receipts tax" are synonymous and mean the tax imposed by the
Arkansas Gross Receipts Act of 1941, Ark. Code Ann. §
26-52-101 et
seq.
P. SELLER. "Seller" is
synonymous with "vendor" and means every person making a sale, lease, or rental
of tangible personal property or taxable services.
Q. TANGIBLE PERSONAL PROPERTY. "Tangible
Personal Property" means personal property which may be seen, weighed,
measured, felt, touched, or is in any other manner perceptible to the senses.
Tangible personal property includes electricity, water, gas, steam, and
prewritten computer software.
R.
TAXPAYER. "Taxpayer" means any person liable to remit the gross receipts tax or
to make a report for the purpose of claiming any exemption from payment of
gross receipts taxes.
S.
TRANSPORTATION EQUIPMENT. "Transportation equipment" means any of the
following:
1. Locomotives and railcars that
are utilized for the carriage of persons or property in interstate
commerce;
2. Trucks and
truck-tractors with a Gross Vehicle Weight Rating of 10,001 pounds or greater,
trailers, semi-trailers, or passenger buses that are (i) registered through the
International Registration Plan; and (ii) operated under authority of a carrier
authorized and certificated by the U.S. Department of Transportation or another
federal authority to engage in the carriage of persons or property in
interstate commerce;
3. Aircraft
that are operated by air carriers authorized and certificated by the U.S.
Department of Transportation or another federal or a foreign authority to
engage in the carriage of persons or property in interstate or foreign
commerce; or
4. Containers designed
for use on and component parts attached or secured on the items set forth in
GR-3(S)(1)-(S)(3).
Ark. Code Ann. §§
26-52-103;
26-52-317;
26-52-521
