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006.05.204-2. REFUND OF SALES AND USE TAX.

AR ADC 006.05.204-2Arkansas Administrative Code

West's Arkansas Administrative Code
Title 006. Department of Finance and Administration
Division 05. Division of Revenues
Rule 204. 1993-11 Enterprise Zone Act of 1993
Ark. Admin. Code 006.05.204-2
006.05.204-2. REFUND OF SALES AND USE TAX.
(a) The Revenue Division of the Department of Finance and Administration shall authorize a refund of sales and use tax imposed by the state and municipality or county, if the municipality or county authorized the refund of its local tax, on the purchases of the material used in the construction of a building or buildings, or any addition or improvement thereon, for housing any legitimate business enterprise, and machinery and equipment to be located in or in connection with such building.
(b)(1) A sales and use tax refund as provided for in subsection (a) of this section shall be authorized provided that:
(A) The qualified business is an industry that fits into Standard Industrial Classification (SIC) numbers 20 through 39, 7375, or 7376, is a distribution center, corporate headquarters, office sector business or trucking sector business located within Arkansas;
(B) The firm and its contractors give preference and priority to Arkansas manufacturers, suppliers, contractors, and labor, except where it is not reasonably possible to do so without added expense, substantial inconvenience, or sacrifice in operational efficiency;
(C) The firm files an endorsement resolution with the Commission and the Department of Finance and Administration. The endorsement resolution must be approved by the governing body of a municipality or county in whose jurisdiction the facility is located and must:
(i) approve the specific entity's participation in the program, and
(ii) specifically state whether the municipality or county authorizes the Department of Finance and Administration to refund local sales and use taxes to the entity under the program. A municipality or county can authorize the refund of all or part of a tax levied by it, but cannot authorize the refund of any tax not levied by it.
(D) In the event it is found that any business receiving the benefits contained in subsection (a) of this section has failed to comply with the conditions contained in this subsection, that business will be liable for the payment of all sales and use taxes which were refunded under subsection (a) of this section plus penalty and interest.
(2)(A) The term ‘distribution center’ shall mean a facility for the reception, storage, or shipping of a business' own products or products which the business wholesales to retail businesses or ships to its own retail outlets.
(B) For a distribution center to qualify for the benefits provided in this section, it must meet the following requirements:
(i) The distribution center must not make retail sales to the general public; and
(ii) The distribution center must employ twenty-five (25) or more new permanent employees.
(3) If a distribution center, office sector business, corporate headquarters, or trucking sector business does not meet the requirements of subsections (b)(1) through (7), then that business will automatically be disqualified from receiving any benefits under this section and will be required to repay any tax benefits already received under this Act plus penalty and interest.
(4) For an office sector business to qualify for the benefits of this section it must employ one hundred (100) or more new permanent employees and must not make retail sales to the general public;
(5) For a corporate headquarters to qualify for the benefits of this section it must employ fifty (50) or more new permanent employees and must not make retail sales to the general public;
(6) For a trucking sector business to qualify for the benefits of this section it must employ one hundred (100) or more new permanent employees and must not make retail sales to the general public.
(7)(A) The requisite number of new permanent employees must be employed by the industry, distribution center, corporate headquarters, office sector business or trucking sector business within twenty-four (24) months of the date the endorsement resolution was adopted or passed by the governing body approving the business' participation in the program.
(B) In the event that the requisite number of new permanent employees cannot be employed within the twenty-four (24) month period, the business can file a written application with the Commission explaining why additional time is necessary. The business can be afforded up to twenty-four (24) more months to hire the requisite number of employees if the Director and the Chief Fiscal Officer of the State determine that the need for additional time is due to:
(i) unanticipated and unavoidable delay in the construction of a facility that must be completed before the employees can be hired; or
(ii) the project as originally planned will require more than twenty-four (24) months to complete; or
(iii) a change in the business ownership or business structure due to a merger or acquisition.
Current with amendments received through May 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.204-2, AR ADC 006.05.204-2
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