Arkansas Supreme Takes Expansive Reading of Manufacturing Exemption for Pipemaker's Steel Grit

The Arkansas Supreme Court upheld the sales and use tax manufacturing exemption for steel grit used to make pipes in Walther v. Welspun Tubular, LLC, 2021 Ark. 90 (Apr. 22, 2021). This case provides significant clarification of (1) the plant expansion exemption, (2) the articles of commerce requirement, and (3) the continuing utility of equipment requirement. As such, it should be of interest to almost all manufacturers. The positions on each of these issues that were upheld by the court are broader than what the Department of Finance and Administration (DFA) generally has allowed. Arkansas manufacturers should consider whether they can benefit from applying these principles to their own tax situations. [More]

All Manufacturers Need to Be Claiming Reduced Sales & Use Tax Rates on Manufacturing Repair Parts and Services

Manufacturers—particularly smaller ones that do not have direct pay permits—need to make sure that they are claiming the benefit of the reduced sales and use tax rate on manufacturing repair parts and services. This is a significant benefit that refunds part of the state-level tax, as a phase-in before full exemption begins July 1, 2022. With a 12-month limitations period for making a claim, taxpayers need processes in place to assure that timely claims are being made. [More]

Mixed Messages on Arkansas Implementation of Wayfair for Remote Sellers

While there have been no fundamental changes since our prior post on the state's options for taking advantage of Wayfair's termination of the physical presence nexus rule, evolving discussions and inconsistent guidance warrant an update: State leaders are still evaluating their options and appear to be leaning toward legislation in the 2019 legislative session. Informal DFA interim guidance indicating that remote sellers should collect does not appear to be supported by any actual binding law. [More]