2014 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 53 - Compensating Or Use Taxes
Subchapter 2 - Contractors
§ 26-53-203 - Tangible personal property procured from without state for use by contractors.

(a) (1) All tangible personal property which is procured from without this state for use, storage, distribution, or consumption including machinery, equipment, repair or replacement parts, materials, and supplies used, stored, distributed, or consumed by a contractor in the performance of a contract in this state shall be subject to the compensating tax of four and five-tenths percent (4.5%) of the purchase price as provided by the Arkansas Compensating Tax Act, § 26-53-101 et seq., or four and five-tenths percent (4.5%) of its market or book value, whichever is greater, if the property has been subjected to prior use before coming to rest for use, storage, distribution, or consumption within this state. The four and five-tenths percent (4.5%) compensating tax shall be in addition to any other compensating taxes levied by the State of Arkansas.

(2) The tax shall be due and payable regardless of whether or not any right, title, or interest in the tangible personal property becomes vested in the contractor.

(b) In the case of leases or rentals of tangible personal property by a contractor for use, storage, distribution, or consumption in this state, the contractor shall report and remit the compensating tax on the basis of rental or lease payments made to the lessor of the tangible personal property during the term of the lease or rental, which lease rentals shall be in accordance with written contracts between lessor and lessee furnished to the Director of the Department of Finance and Administration.

(c) (1) The provisions of this subchapter shall not apply in respect to the use, consumption, distribution, or storage of tangible personal property as defined in this subchapter for use or consumption in this state upon which a like tax equal to or greater than the amount imposed by this subchapter has been paid in another state, the proof of payment of the tax to be according to rules and regulations made by the director.

(2) If the amount of tax paid in another state is not at least equal to or greater than the amount of tax imposed by the Arkansas Compensating Tax Act, § 26-53-101 et seq., then the contractor shall pay to the director an amount sufficient to make the tax paid in the other state and this state equal to the total amount of tax due under Arkansas law.

(3) No credit shall be given under this section for taxes paid on the property in another state if that state does not grant credit for taxes paid on similar tangible personal property in this state.