Summary of 2021 Arkansas Sales, Use and Other Transaction Taxes Legislation

Act 142 expands the fly-away exemption to all aircraft by removing the certified maximum take-off weight that must be present for the sale of an aircraft to be exempt. Likely effective October 1, 2021.

Act 144 is a technical corrections bill that removes extraneous references to digital magazines in the sales tax laws and clarifies the exemption of a car wash operator’s sale of a car wash. Likely effective October 1, 2021.

Act 146 repeals the long-term rental vehicle tax. Act 277 expands the period for a motor vehicle trade-in credit from 45 days to 60 days following the sale of the used vehicle.

Act 776 requires DFA to submit to counties and municipalities reports on rebates and credits awarded with respect to the local sales and use tax cap as well as certain construction contracts. This will be the first time that local governments get this information with taxpayer names and amounts. Effective January 1, 2022.

Act 807 expands the charitable organizations sales exemption to up to ten events per year.

Act 873 creates a new exemption for sales by public school (including charter school) parent-teacher organizations (PTO). It also exempts public school fundraising events from the special event rules for registration and vendor tax collection. Likely effective October 1, 2021.

Act 880 expands the manufacturing exemption to include equipment used in custom printing. It also expands the resale exemption to include materials that become part of the printed product. Likely effective October 1, 2021.

Act 914 expands the exemption for public school purchases of instructional materials to include equipment that is required to make use of the instructional materials. This is intended to exempt purchases of computers and other electronics. Effective July 1, 2021.

Act 915 extends the reduced tax rates applicable to electricity and natural gas used in manufacturing to also include coal used in manufacturing (but not coal used in electrical generation). Likely effective October 1, 2021.

Act 944 includes electronic devices in the school supplies sales tax holiday. Effective July 1, 2021, and thus first applicable to the August 2021 sales tax holiday. Electronic devices include computers, tablets, and mobile phones.

Act 970 exempts water used in poultry farming from Arkansas sales tax. The Act requires the metering for water used in poultry farming to be separately stated from water used for other purposes. Likely effective October 1, 2021.

Act 972 allows vendors at special events to potentially claim the isolated sale exemption. Likely effective October 1, 2021.

Act 1013 provides sales tax relief on used motor vehicles, trailers, and semi-trailers with a sales price exceeding $4,000 but less than $10,000, providing that they will be taxed at a special low rate of 2.875%. Effective January 1, 2022.

Act 1059 expands the local sales and use tax information provided to local governments by allowing a report based on 4-digit NAICS codes showing tax revenues as well as the number of permit holders. Effective January 1, 2022.

Act 1109 establishes an exemption from sales and use tax bullion, coin, or currency sold for its intrinsic value, excluding such items that have been incorporated into jewelry. Likely effective October 1, 2021.


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