DFA Assessment Coordination Division Proposes Property Tax Exemption Rules Requiring Every Exempt Parcel to Reapply

The Assessment Coordination Division (ACD) of the Arkansas Department of Finance and Administration has proposed rules on tax exemption determinations as mandated by Act 819 of 2019. The rules would require every exempt parcel to reapply for exemption in 2023, and the draft exemption application would require a large amount of information to prove entitlement to the exemption. The rules do not provide substantive guidance about what kinds of uses of property should or should not qualify for exemption. The deadline for comments on the proposed rule is May 31, and a hearing on the proposed rules will be held June 1. Interested parties should consider participating in the rulemaking process. [More]

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]

Arkansas Taxpayer Alert: Troubling Local Sales Tax Disclosure and Reporting Bill (SB293)

Arkansas business taxpayers should be concerned about SB293, which would dramatically change administration of certain sales tax refunds and rebates to require disclosure to local cities and counties. This would substantially erode taxpayer confidentiality protections and the additional compliance costs will likely cost taxpayers millions of dollars. Concerned taxpayers may wish to contact their legislators — the bill is scheduled to be heard by Senate Revenue & Tax tomorrow, February 24. [More]

Significant Small Business Tax Relief Bills Pending in the Arkansas Legislature: Coronavirus Aid and SALT Deduction Parity

Two significant proposals for tax relief for small businesses are making their way through the Arkansas General Assembly that promise hundreds of millions of dollars of tax relief: (1) conformity to federal tax exemptions for PPP loan forgiveness and other coronavirus aid and (2) creating an elective tax regime to allow federal deductibility of Arkansas income tax. Similar proposals are being adopted in other states. Interested small business taxpayers should consult with their tax advisors about the potential benefits and may wish to contact their legislators about supporting the bills. [More]