A. Any taxpayer who does business wholly or partly on a credit basis may apply to the Director for permission to prepare returns on the basis of cash actually received. If the Director determines that the State of Arkansas will not suffer any loss of tax upon the gross receipts or gross proceeds derived by the applicant from the sale of tangible personal property or taxable services due to the cash basis method of accounting for gross receipts, the application shall be granted.

B. Any taxpayer making such application shall be taxable on the gross receipts collected by him during the taxable period including, but not limited to, all service charges, late payment penalties collected, bad debts, losses or expenses. No person may report on the cash basis unless permission has been expressly granted by the Director.

C. Any taxpayer who has received permission from the Director to report sales tax on a cash basis must collect local tax on all monies received by the taxpayer after the effective date of any applicable local tax, regardless of the date of service or the billing date.

D. Taxpayer must keep accurate and complete records which reflect the amount of cash sales and credit sales. These records must show collections on accounts and be open for inspection and audit by the Director or his agents. See GR-18(J) and Ark. Code Ann. § 26-52-309.