2010 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 52 - Gross Receipts Tax
Subchapter 3 - Imposition of Tax
§ 26-52-317 - Food and food ingredients.

26-52-317. Food and food ingredients.

(a) (1) The Director of the Department of Finance and Administration shall determine the following conditions:

(A) That federal law authorizes the state to collect sales and use tax from some or all of the sellers that have no physical presence in the State of Arkansas and that make sales of taxable goods and services to Arkansas purchasers;

(B) That initiating the collection of sales and use tax from these sellers would increase the net available general revenues needed to fund state agencies, services, and programs; and

(C) (i) That during a six-month consecutive period, the amount of net available general revenues attributable to the collection of sales and use tax from sellers that have no physical presence in the State of Arkansas is equal to or greater than one hundred fifty percent (150%) of sales and use tax collected under subsection (c) of this section and 26-53-145 on food and food ingredients.

(ii) The director shall make the determination under subdivision (a)(1)(C)(i) of this section on a monthly basis following the determination that the conditions under subdivision (a)(1)(A) of this section have been met.

(2) When the director finds that all of the conditions in subdivision (a)(1) of this section have been met, then the gross receipts or gross proceeds taxes levied under subsection (c) of this section shall be levied at the rate of zero percent (0%) on the sale of food and food ingredients beginning on the first day of the second calendar month following the determination of the director.

(b) As used in this section:

(1) "Food" and "food ingredients" mean the same as defined in 26-52-103 except that "food" and "food ingredients" do not include prepared food; and

(2) "Prepared food" means the same as defined in 26-52-103 except that "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 Food and Drug Administration in its 2005 Food Code, 3-401.11, as it existed on January 1, 2007.

(c) (1) Beginning July 1, 2009, in lieu of the gross receipts or gross proceeds taxes levied on food and food ingredients under 26-52-301 and 26-52-302, there is levied a tax on the gross receipts or gross proceeds derived from the sale of food and food ingredients at the rate of one and seven-eighths percent (1.875%), to be distributed as follows:

(A) Seventy-six and six-tenths percent (76.6%) of the taxes, interest, penalties, and costs received by the director under this subdivision (c)(1) shall be deposited as general revenues;

(B) Eight and five-tenths percent (8.5%) of the taxes, interest, penalties, and costs received by the director under this subdivision (c)(1) shall be deposited into the Property Tax Relief Trust Fund; and

(C) Fourteen and nine-tenths percent (14.9%) of the taxes, interest, penalties, and costs received by the director under this subdivision (c)(1) shall be deposited into the Educational Adequacy Fund.

(2) The gross receipts or gross proceeds taxes levied under subdivision (c)(1) of this section shall be collected, reported, and paid in the same manner and at the same time as is prescribed by law for the collection, reporting, and payment of all other Arkansas gross receipts taxes.

(d) The gross receipts or gross proceeds derived from the sale of food and food ingredients shall continue to be subject to the:

(1) Excise tax levied under Arkansas Constitution, Amendment 75, 2; and

(2) All municipal and county gross receipts taxes.

(e) The Department of Finance and Administration shall promulgate rules to implement the provisions of this section.