2015 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 57 - State Privilege Taxes
Subchapter 8 - Additional Tax on Tobacco Products
§ 26-57-803 - Additional tax -- Applicability.

(a) (1) In addition to the excise or privilege taxes levied under §§ 26-57-208 and 26-57-802, there is levied a tax of four dollars and seventy-five cents ($4.75) per one thousand (1,000) cigarettes sold in the state.

(2) Whenever there are two (2) adjoining cities, each with a population of five thousand (5,000) or more separated by a state line, the tax on cigarettes sold in the adjoining Arkansas city shall be at the rate imposed by law on cigarettes sold in the adjoining city outside of Arkansas plus the fifty cents (50cent(s)) per one thousand (1,000) cigarettes presently imposed by § 26-57-802. The tax shall not exceed the tax upon cigarettes imposed by this subchapter.

(3) The tax on cigarettes sold in Arkansas within three hundred feet (300') of a state line, in any Arkansas city which adjoins a state line, or in any city that is separated only by a navigable river from a city that adjoins a state line shall be at the rate imposed by law on cigarettes sold in the adjoining state plus the twenty-five cents (25cent(s)) per one thousand (1,000) cigarettes presently imposed by § 26-57-802. The tax shall not exceed the tax upon cigarettes imposed by this subchapter.

(4) (A) The tax on cigarettes shall be at the rate imposed by law on cigarettes sold in the adjoining state plus the additional tax levied by § 26-57-802 when the cigarettes are sold in an Arkansas city or incorporated town whose corporate limits adjoin the corporate limits of an Arkansas border city.

(B) As used in subdivision (a)(4)(A) of this section, "Arkansas border city" means a city that is entitled to the border zone cigarette tax rate and is separated by a navigable river from a city in the other state that is located in a metropolitan statistical area designated by the United States Bureau of the Census with a population of at least one million (1,000,000).

(C) The tax shall not exceed the tax upon cigarettes otherwise imposed under Arkansas law.

(b) (1) In addition to other taxes imposed by law, there is levied an additional excise or privilege tax on the first sale of tobacco products other than cigarettes at the rate of seven percent (7%) of the invoice price, before discounts.

(2) However, the excise or privilege tax levied under subdivision (b)(1) of this section is subject to the limitation stated in § 26-57-208(2)(B).

(3) As used in this subsection, "invoice price" means the same as defined in § 26-57-203.

(c) (1) (A) The taxes levied by this section shall be reported and paid by wholesalers that shall be licensed under § 26-57-214.

(B) However, unless a retailer has confirmed and establishes by clear and convincing evidence that the tax levied under this section has been paid previously on the tobacco products, the retailer is liable for reporting and paying these taxes when the retailer obtains tobacco products from a person other than a wholesaler licensed under § 26-57-214.

(2) (A) A taxpayer that fails to report and remit the tobacco tax due on tobacco products obtained from any person other than a wholesaler that is licensed under § 26-57-214 shall be subject to the following penalties:

(i) Five percent (5%) of the total tobacco tax due for the first offense;

(ii) Twenty percent (20%) of the total tobacco tax due for the second offense; and

(iii) Twenty-five percent (25%) of the total tobacco tax due for the third and any subsequent offenses.

(B) In addition, the taxpayer's retail cigarette/tobacco permit shall be revoked for a period of ninety (90) days for the third and any subsequent offenses.

(3) This subsection does not affect the provisions of § 26-57-228.

(d) As provided in § 26-57-244, the director may make a direct assessment of excise tax against any person in possession of an untaxed tobacco product or unstamped cigarettes.