006.05.515. 2012-2 Arkansas Sales Tax Holiday
AR ADC 006.05.515Arkansas Administrative Code
Ark. Admin. Code 006.05.515
006.05.515. 2012-2 Arkansas Sales Tax Holiday
This rule is adopted under the provisions of Ark. Code Ann. § 25-15-204, § 26-18-101 et seq. and Act 757 of 2011, which is codified at Ark. Code Ann. § 26-52-444. This rule is necessary to properly administer the provisions of Act 757 of 2011 regarding the Arkansas sales and use tax holiday.
The following words and phrases, when used in this rule, shall have the following meanings:
2. “Clothing accessory or equipment” means an incidental item worn on the person or in conjunction with clothing for which the gross receipts or gross proceeds paid for the item of clothing accessory or equipment is less than fifty dollars ($50). The following list contains examples of clothing accessories or equipment but is not intended to be an all-inclusive list:
a. Articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance. The following list contains examples of cosmetics but is not intended to be an all-inclusive list:
6. “Layaway sale” means a transaction in which property is set aside for future delivery to a customer who makes a deposit, agrees to pay the balance of the purchase price over a period of time, and, at the end of the payment period, receives the property. An order is accepted for layaway by the seller when the seller removes the property from normal inventory or clearly identifies the property as sold to the purchaser.
The following list contains examples of protective equipment but is not intended to be an all-inclusive list:
The gross receipts derived from the sale of the following items shall be exempt from state and local Arkansas sales and use tax from 12:01 a.m. on the first Saturday in August to 11:59 p.m. the following Sunday each year:
For purposes of administering the Arkansas sales tax holiday, the following procedures will apply:
3. Coupons and discounts. A discount by the seller reduces the sales price of the property and the discounted sales price determines whether the sales price is within a sales tax holiday price threshold. A coupon that reduces the sales price is treated as a discount if the seller is not reimbursed for the coupon amount by a third-party. If a discount applies to the total amount paid by a purchaser rather than to the sales price of a particular item and the purchaser has purchased both eligible property and taxable property, the seller should allocate the discount based on the total sales prices of the taxable property compared to the total sales prices of all property sold in that same transaction.
4. Splitting of items normally sold together. Articles that are normally sold as a single unit must continue to be sold in that manner. Such articles cannot be priced separately and sold as individual items in order to obtain the exemption. For example, a pair of shoes cannot have each shoe sold separately so that the sales price of each shoe is within a sales tax holiday price threshold.
5. Rain checks. A rain check allows a customer to purchase an item at a certain price at a later time because the particular item was out of stock. Eligible property that customers purchase during the exemption period with use of a rain check will qualify for the exemption regardless of when the rain check was issued. Issuance of a rain check during the exemption period will not qualify eligible property for the exemption if the property is actually purchased after the exemption period.
c. If a customer purchases an item of eligible property before the exemption period, but during the exemption period the customer returns the item and receives credit on the purchase of a different item of eligible property, no sales tax is due on the sale of the new item if the new item is purchased during the exemption period.
7. Delivery charges. Delivery charges, including shipping, handling and service charges, are part of the sales price of eligible property as set forth under the Department's Gross Receipts Rule GR-18(A). For the purpose of determining a sales tax holiday price threshold, if all the property in a shipment qualifies as eligible property and the sales price for each item in the shipment is within the sales tax holiday price threshold, then the seller does not have to allocate the delivery, handling or service charge to determine if the price threshold is exceeded. The shipment will be considered a sale of eligible products. If the shipment includes eligible property and taxable property (including an eligible item with a sales price in excess of the price threshold), the seller should allocate the delivery charge by using:
b. the customer orders and pays for the item and the seller accepts the order during the exemption period for immediate shipment, even if delivery is made after the exemption period. The seller accepts an order when the seller has taken action to fill the order for immediate shipment. Actions to fill an order include placement of an “in date” stamp on a mail order or assignment of an “order number” to a telephone order. An order is for immediate shipment when the customer does not request delayed shipment. An order is for immediate shipment notwithstanding that the shipment may be delayed because of a backlog of orders or because stock is currently unavailable to, or on back order by, the seller.
9. Returns. For a 60-day period immediately after the sales tax holiday exemption period, when a customer returns an item that would qualify for the exemption, no credit for or refund of sales tax shall be given unless the customer provides a receipt or invoice that shows tax was paid, or the seller has sufficient documentation to show that tax was paid on the specific item. This 60-day period is set solely for the purpose of designating a time period during which the customer must provide documentation that shows that sales tax was paid on returned merchandise. The 60-day period is not intended to change a seller's policy on the time period during which the seller will accept returns.
Information regarding the administration of the sales tax holiday may be obtained from the Sales & Use Tax Section of the Arkansas Department of Finance and Administration, P.O. Box 1272, Room 1340, Joel Y. Ledbetter Building, Little Rock, Arkansas 72203, Phone: 501-682-7104, FAX: 501-682-7904, http://www.dfa.arkansas.gov
Credits
Adopted June 16, 2012.
Current with amendments received through February 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.515, AR ADC 006.05.515
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