006.05.212-GR-39. EXEMPTIONS FROM TAX - CHARITIES AND CHURCHES:
AR ADC 006.05.212-GR-39Arkansas Administrative Code
Ark. Admin. Code 006.05.212-GR-39
006.05.212-GR-39. EXEMPTIONS FROM TAX - CHARITIES AND CHURCHES:
A. The gross receipts or gross proceeds derived from the sale of tangible personal property or services by churches or charitable organizations are exempt from the tax except where such organizations may be engaged in business for profit. Additionally, sales made by charitable organizations that sell new tangible personal property and their sales compete with sales made by for-profit businesses are not exempt. (See GR-39(C).)
B. The gross receipts or gross proceeds derived from sales of tangible personal property or services to churches or charitable organizations are not exempt from tax unless the items purchased are for resale by the church or charitable organization. In order to claim the sale-for-resale exemption, a church or charitable organization must have either a resale certificate or a letter opinion issued by DFA certifying that it is a church or charitable organization and that it intends to resell the items purchased.
3. The limitations of this section do not apply to sales made by a nonprofit hospital, a cafeteria at a nonprofit hospital, or a gift shop at a nonprofit hospital, whether operated by the hospital, a hospital auxiliary, or other nonprofit organization; or to sales by gift shops operated by charitable organizations at for-profit hospitals.
2. The phrase “engaged in business for profit” means that the income or receipts of the church or charitable organization inures to the benefit of an individual, corporation organized for profit, trust organized for profit or partnership organized for profit. A charitable organization or church that has obtained a ruling from the United States Internal Revenue Service or Arkansas Department of Finance and Administration, Income Tax Section, which certifies the organization for income tax purposes is presumed to be a non-profit organization.
Credits
AUTHORITY: Ark. Code Ann. §§ 26-52-401; 26-52-430
Current with amendments received through May 15, 2024. Some sections may be more current, see credit for details.
Ark. Admin. Code 006.05.212-GR-39, AR ADC 006.05.212-GR-39
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