Arkansas to Require Remote Sellers to Collect Sales Tax

Arkansas will begin requiring remote sellers to collect and remit sales tax on July 1st. Before that date, remote sellers will need to register. Arkansas is part of the Streamlined Sales Tax Registration System. That means that you can register for Arkansas and the other 23 states in the system with a single application, by following the link in this paragraph. There is no registration fee.

Once you’ve registered, you can apply for a username and password for the Arkansas Taxpayer Access Point and you will then be able to file each month during which you have sales in Arkansas. So, if you file in July but have no Arkansas sales in August, you won’t have to file in August. If you have Arkansas sales in September, you will have to file in September. You won’t have to register again, regardless of the number of months you don’t file. The 20th of each month is the filing date for the previous month.

If your sales in Arkansas don’t reach the threshold of $100,000 or 200 transactions per year, you are exempt. This threshold applies to the current and previous year. So, if you had 200 transactions last year, you must register and comply with sales tax regulations in July.

Like all the other states, Arkansas has its own complicated system of taxable and non-taxable goods and services. So, repair of exempt manufacturing equipment is taxable but the labor involved in replacing that equipment is not.

Streamlined Sales Tax

Arkansas, along with the rest of the states listed below, is a full member of the Streamlined Sales Tax system. Tennessee is an associate member, and the remainder of the states are not on the list (or at least not yet). This means that about half the states of the Union are participating in the system. Clicking on the name of the state will take you to their page at the Streamlined Sales Tax website.

The system requires member states to use a uniform process for registering and collecting sales tax. State and local sales tax will all be handled in a single return.

Tax rates and taxable/ non-taxable items are still up to the individual states. However, the definitions are standardized. That is, each state can decide whether or not to tax food and at what rate, but everyone has to agree on the definition of “food.”

Arkansas has 392 different sales tax jurisdictions, with plenty of variety in local and county-level tax rates. Sales tax is destination-based.

Arkansas is trying to keep things simple. “We understand the impact that Act 822 of the 92nd Legislative Session will likely have on your business,” the state information website says. “Arkansas, as a member of the Streamlined Sales Tax Governing Board, has implemented standards and simplifications that will provide assistance to on-line and remote sellers affected by the Supreme Court’s decision as you transition to collecting and reporting Arkansas state and local sales and use taxes.”

If you need further details about Arkansas state and local sales tax, for remote sellers or for your in-state business, call Sales Tax DataLINK at (479) 715-4275. We are headquartered in Bentonville, Arkansas, and our team of sales tax experts knows all the ins and outs of Arkansas sales taxes.

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