The Arkansas sales tax is 6.5 percent of the gross receipts from the sale of tangible personal property and certain selected services. The tax is paid by the consumer at the point of final sale and is computed on the total consideration received without any deduction of expenses. "Sale" includes the lease or rental of tangible personal property.
Taxable services include sales of gas, water, electricity, telephone and telegraph service and repair services.
The Arkansas compensating use tax of 6.5 percent is levied on tangible personal property purchased from outside the state of Arkansas for use, storage, or consumption within the state of Arkansas.
Sales of prescription medicines are exempt from sales tax. Sales of food items have only a 1.5 percent state tax. City and County taxes do apply to food sales.
- By City and County The city of Warren and Bradley County jointly shares a sales tax of 1% on gross receipts from sales within the county. The City also places an additional 1% sales tax on gross receipts from sales within the city. Bradley County also has an additional 1% sales tax for the renovation of the Bradley County Medical Center. The Current sales tax is 9.5 percent in Warren and 8.5 percent for Bradley County (sales outside of Warren city limits).
Exemptions from Sales and Use Taxes
All 1-800 calls
Property that becomes a recognizable, integral part of property manufactured, compounded, processed or assembled for resale
Machinery and equipment used directly in manufacturing that are purchased for a new manufacturing facility or to replace existing machinery and equipment. Machinery and equipment required by Arkansas law to be purchased for air or water pollution control are also exempt.
Catalysts, chemicals, reagents and solutions that are consumed or used in producing, manufacturing, fabricating, processing, or finishing articles of commerce at manufacturing or processing plants or facilities; and/or to prevent or reduce air, water and other contamination
The term "used directly" includes molds and dies that determine the physical characteristics of the finished product or its packaging materials; testing equipment to measure the quality of the finished product; computers and related peripheral equipment that directly control or measure the manufacturing process; machinery and equipment that produce steam, electricity or chemical catalysts; and solutions that are essential to the manufacturing process but are consumed during the course of the manufacturing process and do not become necessary and integral parts of the finished product.
In addition to those operations commonly understood within their ordinary meaning, the term "manufacturing" includes mining; quarrying; refining; the extracting of brine, oil and gas; cotton ginning; the drying of rice; soybeans and other grains; the manufacturing of feed; the processing of poultry; the processing of eggs and livestock; the hatching of poultry; printing of all kinds; the processing of scrape metal into grades and bales for further processing; and the rebuilding or re-manufacturing of used parts and retreading of tires for automobiles, trucks and other mobile equipment powered by electrical or internal combustion engines or motors, provided that the rebuilt or remanufactured parts or retreaded tires are not sold directly to the consumer but are sold for resale; and the production of protective coatings, which increase the quality and durability of a finished product.
Specific exemptions include the following:
Sales of gas produced from biomass in a facility meeting federal eligibility requirements and sold to an entity for the purpose of generating steam, hot air or electricity to be sold to the gas producer
Electricity used in the production of aluminum metal by the electrolytic reduction process
Electricity was used in the chlor-alkali manufacturing process
Feedstuffs used in livestock production, including poultry for commercial production in Arkansas
Agricultural chemicals, fertilizer and limestone used in the commercial production of agricultural products
Sale of electicity and natural gas to qualified manufacturers of steel for use in connection with steel mills
The first $50,000 of timber harvesting equipment purchase price
Sales of any item of new or used farm equipment or machinery
Natural gas used as fuel in the process of manufacturing glass
Forms which are consumed or destroyed during the manufacture of the item for which the form was built
Repair or maintenance services performed on railroad cars, parts, or equipment brought into the state only to be repaired, refurbished, modified or converted
Sale of newspapers and publications; sale of advertising space in newspapers and publications; and billboard advertising services.