2010 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 52 - Gross Receipts Tax
Subchapter 5 - Returns and Remittance of Tax
§ 26-52-517

LexisNexis Practice Insights

Exemption Certificates

26-52-517. Exemption certificates.

(a) The sales tax liability for all sales of tangible personal property and taxable services is upon the seller unless the purchaser claims an exemption and the seller obtains identifying information of the purchaser and the reason the purchaser is claiming the exemption in the manner prescribed by the Director of the Department of Finance and Administration.

(b) (1) When tangible personal property or taxable services are purchased tax-free pursuant to subsection (a) of this section and the tangible personal property or taxable service is not resold by the purchaser, the purchaser is solely liable for reporting and remitting to the director any tax which should have been paid at the time of purchase.

(2) Use or disposition of the property other than for resale shall be deemed a withdrawal from stock for all purposes, including reporting and remittance of the tax due, and the tax shall be due from the purchaser at the time of the withdrawal from stock.

(c) (1) The director may provide sale for resale certificates to assist retailers in properly accounting for nontaxable sales of tangible personal property or taxable services.

(2) Such certificates must be completed as to the information required in order to be valid and cannot be used to establish any other exemption from sales or use tax.

(d) Any person repeatedly selling the same type of property to the same purchaser for resale may accept a blanket certificate covering more than one (1) transaction.

(e) A seller that follows the exemption requirements as prescribed by the director is relieved from any tax otherwise applicable if it is determined that the purchaser improperly claimed an exemption.

(f) The relief from liability provided in subsection (e) of this section does not apply to a seller that:

(1) Fraudulently fails to collect the sales tax;

(2) Solicits a purchaser to participate in the unlawful claim of an exemption; or

(3) Accepts an exemption certificate from a purchaser claiming an entity-based exemption if:

(A) The subject of the transaction sought to be covered by the exemption certificate is actually received by the purchaser at a location operated by the seller; and

(B) The Department of Finance and Administration provides an exemption certificate that clearly and affirmatively indicates that the claimed exemption is not available in Arkansas.

(g) (1) A seller may obtain a fully completed exemption certificate or capture the relevant data elements required by the department within ninety (90) days after the date of sale.

(2) If the seller has not obtained an exemption certificate or all relevant data elements and the department makes a request for substantiation of the exemption, the seller has one hundred twenty (120) days from the date of the request to prove by other means that the transaction was not subject to sales or use tax or to obtain in good faith a fully completed exemption certificate from the purchaser.