State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Arkansas (AR)

AR Sales Tax - Name of Tax and General Application:

Arkansas imposes a tax on the sale of tangible personal property and some services in the state. This tax is referred to as a "sales tax" or "excise tax". In addition, there is a tax imposed on the use of tangible personal property. This tax is referred to as a "use tax" or "compensating tax

AR Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Arkansas requires retailers who are doing business in the state to collect use tax. "Doing business" in Arkansas includes having local activity regularly and persistently through agents, employees or other representatives which results in a sale, delivery or the transfer of the physical position of tangible personal property.

AR Local Tax - Do Localities Impose Tax?

Yes, Arkansas imposes local sales tax.

AR Resale Certificate Renewal Agreements:

A resale certificate is provided by the buyer or retailer to the seller and must include: permit number of purchaser, statement that purchase is for resale, statement that purchaser will report tax due on items not resold, description of purchaser's business and the items being resold, signature of purchaser, business name, address, date and a notice to the seller that unless the certificate is held in good faith the seller may be liable for sales tax.

AR Resale Certificate Renewal Periods

Arkansas does not have a set renewal period for resale certificates.

AR Statute of Limitations

The later of three years from the date the return was due or the date the return was filed. If the tax base was understated by more than 25%, the statue of limitations becomes six years from the same dates.