A. Contractors are defined to be consumers of all tangible personal property, used, or consumed in the performance of a contract in this state, and of all tangible personal property stored for use or upon which the contractor may exercise any right or power, in this state.

B. All tangible personal property which is procured from outside this state for use, storage, consumption, or distribution including machinery, equipment, repair or replacement parts, materials and supplies used, stored, or consumed by a contractor in the performance of a contract in this state shall be subject to compensating use tax on the purchase price or its market or book value (whichever is greater) unless such property has been subjected to prior use before coming to rest for use, storage, or consumption within this state. Such tax shall be due and payable regardless of whether or not any right, title, or interest in the tangible personal property becomes vested in the contractor.

C. In the case of leases or rentals of tangible personal property by a contractor for use, storage, consumption, or distribution in this state, the contractor shall report and remit compensating use tax on the basis of rental or lease payments made to the lessor of such tangible personal property during the term of the lease or rental.

D. The provisions shall not apply with respect to the use, consumption, storage, or distribution of tangible personal property or taxable services upon which a like tax equal to or greater than the amount imposed by Ark. Code Ann. § 26-53-101 et seq. has been paid in another state, the proof of payment of such tax to be according to rules made by the Commissioner. If the amount of tax paid in another state is not at least equal to or greater than the amount of the Arkansas compensating use tax, then the contractor shall pay to the Commissioner an amount sufficient to make the tax paid in the other state and this state equal to the total amount of tax due under Arkansas law. No credit shall be given under this section for taxes paid on such property in another state if that state does not grant credit for taxes paid on similar tangible personal property in this state.

E. REBATES.

F. WITHDRAWAL FROM STOCK. An out-of-state contractor that withdrawals an item from stock for use in a construction contract in Arkansas is responsible for any applicable Arkansas state and local use tax. The applicable local use tax for the withdrawal from stock is determined by the location of the job site. The out-of-state contractor will be given credit for tax paid on the item in another state pursuant to Ark. Code Ann. § 26-53-131.