2014 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 52 - Gross Receipts Tax
Subchapter 4 - Exemptions
§ 26-52-440 - Exemption for qualified museums.

(a) As used in this section:

(1) "Exemption certificate" means an exemption certificate issued by the Director of the Department of Finance and Administration under subdivision (d)(1) of this section;

(2) "Nonprofit organization" means any organization described in 26 U.S.C. § 501(c)(3), as in effect on January 1, 2005;

(3) "Qualified museum" means any nonprofit organization that acquires a collection of artwork for purposes of establishing and operating a qualified museum facility, regardless of whether the nonprofit organization may engage in any other charitable activity if the:

(A) Fair market value of the artwork collection of the nonprofit organization for public viewing and exhibition at the qualified museum facility exceeds one hundred million dollars ($100,000,000) prior to January 1, 2013; and

(B) The director has issued an exemption certificate to the nonprofit organization; and

(4) "Qualified museum facility" means a facility, including the structures, buildings, and any ancillary or related structures or buildings and real property associated with the facility, including auditoriums, parking areas, and educational facilities that house a collection of artwork or other exhibits for public viewing and exhibition if the:

(A) Principal location and primary operations of the facility will be located within the State of Arkansas;

(B) Museum portion of the facility opens to the public after January 1, 2005, and prior to January 1, 2013; and

(C) Aggregate total costs of the construction and acquisition of the facility exceed thirty million dollars ($30,000,000) prior to January 1, 2013.

(b) (1) The gross receipts or gross proceeds derived from the sale of any tangible personal property or services to a qualified museum are exempt from this chapter.

(2) The exemption provided in subdivision (b)(1) of this section shall also apply to the gross receipts or gross proceeds derived from the sale of materials to a qualified museum or its contractor or agent used in the construction, repair, expansion, or operation of the qualified museum facility.

(c) A nonprofit organization requesting recognition as a qualified museum shall file with the director on forms prescribed by the director a written statement under oath:

(1) (A) Describing the facts upon which the nonprofit organization claims the exemption under this section.

(B) This statement shall be filed prior to first claiming the exemption under this section and shall include facts indicating that the nonprofit organization has a good faith plan and intent to satisfy the conditions under subdivision (c)(2) of this section; and

(2) On or before June 30, 2013, stating that the following conditions have been met:

(A) The nonprofit organization has established and operated prior to January 1, 2013, a facility that houses a collection of artwork or other exhibits for public viewing and exhibition;

(B) The principal location and primary operations of the facility are within the State of Arkansas;

(C) The museum portion of the facility first opened to the public after January 1, 2005, and prior to January 1, 2013;

(D) The aggregate total costs of construction and acquisition of the facility, including the structures, buildings, ancillary or related structures or buildings, real property used in connection with the facility, auditoriums, parking areas, and educational facilities exceeded thirty million dollars ($30,000,000) prior to January 1, 2013; and

(E) Prior to January 1, 2013, the nonprofit organization acquired a collection of artwork with a fair market value in excess of one hundred million dollars ($100,000,000) for public viewing and exhibition at the qualified museum facility.

(d) (1) After filing the statement required under subdivision (c)(1) of this section, if the director finds that the nonprofit organization has a good faith plan and intent to satisfy the conditions of subdivision (c)(2) of this section prior to January 1, 2013, the director shall issue an exemption certificate to the nonprofit organization within sixty (60) days after the filing of the statement.

(2) The director may revoke the exemption certificate at any time after it is issued if the director determines that the nonprofit organization is unable to satisfy the conditions under subdivision (c)(2) of this section prior to January 1, 2013.

(3) After filing the statement required under subdivision (c)(2) of this section, if the director determines that the nonprofit organization has not met the conditions under subdivision (c)(2) of this section, the director shall revoke the exemption certificate of the nonprofit organization.

(4) If the nonprofit organization fails to file the statement described in subdivision (c)(2) of this section on or prior to June 30, 2013, the director shall revoke the exemption certificate.

(5) Revocation by the director of an exemption certificate shall be retroactive to the date of its issuance subject to subsection (e) of this section.

(e) (1) If the director revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties due under this chapter, the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., or the Arkansas Tax Procedure Act, § 26-18-101 et seq., may be assessed against the nonprofit organization but may not be assessed against a third party that has relied in good faith on the exemption certificate prior to its revocation.

(2) If the director revokes the exemption certificate, any tax deficiency, related interest, and applicable penalties assessed against the nonprofit organization shall also include any tax deficiency, related interest, and applicable penalties assessed on purchases made by the nonprofit organization's contractors and agents for the benefit of the nonprofit organization in reliance on the exemption certificate.

(3) (A) Any assessment by the director under subdivision (e)(1) or subdivision (e)(2) of this section shall be made in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.

(B) However, the time period for the director to make the assessment is extended to whichever of the following occurs first:

(i) Three (3) years from the date the nonprofit organization files the statement under subdivision (c)(2) of this section; or

(ii) July 1, 2016.

(4) The nonprofit organization may contest any assessment or other determination by the director in accordance with the Arkansas Tax Procedure Act, § 26-18-101 et seq.