2010 Arkansas Code
Title 26 - Taxation
Subtitle 2 - Administration Of State Taxes
Chapter 19 - Electronic Funds
§ 26-19-107 - Penalties.

26-19-107. Penalties.

(a) In addition to the penalties imposed under the Arkansas Tax Procedure Act, 26-18-101 et seq., a taxpayer required to pay taxes by electronic funds transfer who fails to so pay the amount required under any state law on or before the due date for payment of the taxes shall be assessed a penalty of five percent (5%) of the amount of taxes due.

(b) In addition to all other penalties imposed under this subchapter and the Arkansas Tax Procedure Act, 26-18-101 et seq., a taxpayer required to pay sales taxes by electronic funds transfer who fails to so pay any of the sales taxes on or before the due date for payment of the taxes in the amounts required under 26-52-501 or 26-52-512 shall not be entitled to the benefits contained in 26-52-503 and 26-52-512.

(c) (1) With respect to an electronic funds transfer by automated clearinghouse debit, "to pay taxes by electronic funds transfer" means that the following conditions are met on or before the due date for such payment:

(A) The taxpayer initiates the automated clearinghouse debit by calling the designated toll-free telephone number by 3:00 p.m. on the last business day prior to the due date;

(B) The taxpayer accurately provides the Director of the Department of Finance and Administration with sufficient information from which the payment may be applied to the correct account, including, but not limited to, the taxpayer's name, account number, tax type, tax period, and the amount of the payment; and

(C) The taxpayer's bank account designated as the account to be debited contains adequate funds to cover the payment of taxes by debit transfer at the time the debit transaction is initiated and continuing through the due date of the tax payment.

(2) With respect to an electronic funds transfer by automated clearinghouse credit, "to pay taxes by electronic funds transfer" means that the following conditions are met on or before the due date for the payment:

(A) (i) The taxpayer initiates a successful prenote or test transaction containing necessary information in cash concentration or disbursement plus tax payment addendum (CCD + TXP) format.

(ii) "Tax payment addendum format" means a technical format for the communication of limited tax remittance data accompanying a payment through the automated clearinghouse system and includes a list of standard tax-type and account-type codes;

(B) The transfer contains an electronic addenda which allows the director to identify the taxpayer, tax account number, tax payment amount, tax type, and tax period in accordance with instructions provided by the director;

(C) The taxpayer transfers the amount of funds due; and

(D) The taxpayer's designated bank account contains adequate funds to cover the credit transfer at the time the credit transaction is initiated and continuing through the due date of the tax payment.

(3) (A) A taxpayer is considered to have failed to pay taxes by electronic funds transfer if the conditions stated in subdivision (c)(1) or (c)(2) of this section are not met.

(B) The director will notify the taxpayer in writing of the failure to meet the conditions with respect to a particular reporting period.

(C) Subsequent failures to meet the prescribed conditions shall result in the assessment of penalties described in 26-19-107(a) without necessity of additional written notice.