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Arkansas Tax and Incentives Update

DFA Hearing Calls Party Foul on Restaurant's Tax-Included Drink Pricing

Posted On: Tuesday, August 08, 2017

While Arkansas Department of Finance and Administration generally tolerates retailers not collecting sales tax as a separately stated amount, sellers need to understand the risk of being required to absorb the tax and pay it out-of-pocket instead of treating the sale as tax-included pricing and backing out the tax from the tax base of gross receipts. Hearing nos. 16-209, 16-210, 16-211 (May 8, 2017) illustrates this risk: A restaurant that also sold mixed drinks claimed a tax-included pricing approach, but this was rejected by the Department, likely effectively increasing the tax imposed by 50%. Read More

Will the FLIS Enterprises Case Be a Refund Opportunity for Sales Tax on Withdrawals from Stock?

Posted On: Thursday, June 01, 2017

A case is pending in the Arkansas Court of Appeals with significant implications for restaurants specifically and, potentially, for any manufacturers who make withdrawals from stock for finished goods. Taxpayers should evaluate their current positions and consider potential refund claims. Read More

Summary of 2017 Arkansas Tax Procedure Legislation

Posted On: Tuesday, May 02, 2017

The 2017 legislative session saw seemingly minor adjustments to tax procedure, but with significant impacts to affected taxpayers: Read More

Summary of 2017 Arkansas Sales and Use Tax Legislation

Posted On: Wednesday, April 12, 2017

There were relatively limited changes to Arkansas sales and use tax laws in the 2017 legislative session. The big news is Act 465, which phases out the InvestArk sales/use tax credit program while bringing in an exemption for manufacturing partial repairs and replacement parts. While a welcome simplification of the Arkansas tax system, the loss of InvestArk will affect many Arkansas manufacturers. Businesses should consider filing a final InvestArk application by June 30, 2017. Beyond Act 465, the Act 141 expansion of the tax base to include digital products is significant and may affect taxpayers engaged in e-commerce. Read More

Summary of 2017 Arkansas Income Tax Legislation

Posted On: Tuesday, April 11, 2017

With the legislature in recess before returning for sine die in early May, here is a summary of the 2017 income tax legislation. Particularly significant adjustments have been made to passthrough taxation in terms of (1) federal S corporation election conformity, (2) passthrough entity-level apportionment instead of separate allocation, and (3) passthrough withholding on nonresident corporate partners; all are effective January 1, 2018. (If an effective date is not specifically listed, it should be 90 days after adjournment sine die, on or around July 30, 2017.) Read More

The "Arkansas Two-Step": Arkansas Income Tax for Multistate Passthroughs Before and After HB1562

Posted On: Wednesday, March 22, 2017

House Bill 1562, now Act 482, was a technical change to Arkansas taxation of multistate passthrough enterprises that basically conforms the law to what has been common compliance practice of apportionment at the partnership level. Arkansas law will continue to treat the resulting passthrough Arkansas income as allocable up to the partners.  Read More

Caution! Income Tax Apportionment Bill (MTC UDITPA Amendments) Advancing Quickly

Posted On: Thursday, March 09, 2017

Among the hundreds of bills filed on the March 6 deadline was HB2100, sponsored by House Revenue & Taxation Committee Chair Joe Jett. This is a Department of Finance and Administration bill that takes up the model amendments to the Uniform Division for Income Tax Purposes Act (UDITPA) that were adopted by the Multistate Tax Commission (MTC) in 2015. The legislation makes significant changes to Arkansas apportionment, particularly for receipts from services and intangibles. The expansion of the throwback rule and the adoption of a throwout rule particularly stand out for concern. Any affected taxpayers interested in adjusting the bill should act soon: the legislation already has moved out of the House Revenue & Taxation Committee and could be heard on the House floor next week. Read More

SB362 to Phase Out InvestArk and the Tax on Manufacturing Repair Parts and Services

Posted On: Sunday, February 19, 2017

A proposal is underway for major simplification of Arkansas sales and use taxes on manufacturing: SB362 would phase out both the InvestArk investment incentive program and the sales tax on partial replacements and repairs of manufacturing machinery and equipment. Manufacturers should consider whether they can apply for one more InvestArk project by June 30, 2017, after which InvestArk will cease taking new applications and will begin to wind down. Read More

Manufacturing Process Resumed: DFA Hearing Allows Manufacturing Exemption for Packaging Equipment

Posted On: Monday, February 06, 2017

An Arkansas manufacturer was allowed to claim the manufacturing machinery and equipment exemption on equipment used in preparing goods for shipment in a notable hearing decision issued at the end of 2016. Department of Finance and Administration Hearing nos. 16-444, 16-445 (Dec. 27, 2016). Read More

Arkansas Tax Legislation Update: Governor's Tax Cuts, Digital Goods, and More

Posted On: Wednesday, January 25, 2017

With the legislative session in full swing, some updates on Arkansas tax legislation:
 Read More


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Recent Posts


Property Tax Equalization Board Appeals Deadline August 21 - August 17, 2017

DFA Hearing Calls Party Foul on Restaurant's Tax-Included Drink Pricing - August 8, 2017

Matt Boch to Discuss Tax Legislation and Reform at the Fayetteville Chamber of Commerce - August 2, 2017


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