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]

Administrative Hearing: "Tax-Included" Invoicing Creates Remittance Obligation Regardless of Taxability

States vary in the degree to which they allow sellers to bundle ("tax included") sales tax instead of collecting from the customer as a separate line-item, and Arkansas practice is generally fairly liberal. But this can be a double-edged sword, as shown in Department of Finance and Administration (DFA) Administrative Decision nos. 19-415 & 416 (Jun. 28, 2019), which held that a "tax included" legend meant that the seller was collecting sales tax. As a collector, that seller had an obligation to remit the deemed collected tax regardless of the underlying taxability of the transaction and was found liable for tax for failing to do so. [More]