Do I need to get sales and use tax license in the state of Arkansas?
- If you intend to make taxable sales in Arkansas for the first time, you will need to apply for the Arkansas Sales & Use Tax Permit to do business.
- All vendors located and doing business in Arkansas must acquire an Arkansas Business Permit if they are engaged selling taxable products or services.
- Businesses with a taxable presence in the state of Arkansas are considered to have sales tax nexus within the state.
- Arkansas Consumer Use tax is usually collected on the out of state purchases without paying sales tax to the vendors. It is imposed to protect an unfair competition with the out of state vendors.
Requirement to Apply for the Sales Tax License in Arkansas:
- Arkansas Sales and Consumer Use tax can be applied online at Arkansas Department of Finance and Administration website.
- DFA usually takes 5-7 working days to issue you a sales tax number to collect sales tax on the taxable merchandise or services.
- Rental lease is required of the business place, if it is being conducted on the commercial location.
- State of Arkansas business license is required, if operating a business from home.
- DFA may call to the owner of the business to verify the information submitted along with the application.
- State filing fee of the Arkansas to register for sales and use tax is $50.00
Obligations for Arkansas Sales Tax License Holders
- Sales tax is calculated on the gross sales of merchandise items or taxable services provided in the state of Arkansas.
- Consumer use tax is calculated on the gross purchases, if sales tax was not collected on the purchases.
- Sales and Use Tax Certificate must be posted at the business location.
- Sales tax is calculated on base of delivery location of merchandise or taxable services provided. For example; if the delivery was given at store location, then the sales tax should be charged based on store location. If delivery was given other than store location, the sales tax should be charges based on the delivery location.
- A city limit can be checked at DFA’s web site to calculate correct sales tax.
- You do not have to charge sales and use tax, if delivering in other states.
- If the customer delivered an equipment to repair at dealer's shop and the equipment was delivered at customer location, the sales tax will be charged at "point of delivery" not where the services were performed.
- State of Arkansas sales tax permit is not transferable and a new owner of the business must be applied for a new permit.
- State of Arkansas Seller's Permit must be returned to the department if closing out business along with the final return.
Filing frequency to report sales and use tax to DFA (Filing frequency dates may be changed, if a due date falls on a holiday or weekend).
First quarter January-March prepayment due dates:
- Sales & Use Tax 1st Prepayment- January 12, February 12 and March 14
- Sales & Use Tax Monthly Report for previous month- January 20, February 22 and March 21
- Sales & Use Tax 2nd Prepayment-January 25, February 24 and March 24
Second quarter April-June prepayment due dates:
- Sales & Use Tax 1st Prepayment- April 12, May 12 and June 13
- Sales & Use Tax Monthly Report for previous month- April 20, May 20 and June 20
- Sales & Use Tax 2nd Prepayment-April 25, May 24 and June 24
Third quarter July-September prepayment due dates:
- Sales & Use Tax 1st Prepayment- July 12, August 12 and September 12
- Sales & Use Tax Monthly Report for previous month- July 20, August 22 and September 20
- Sales & Use Tax 2nd Prepayment-July 25, August 24 and September 26
Fourth quarter October-December prepayment due dates:
- Sales & Use Tax 1st Prepayment- October 12, November 14 and December 12
- Sales & Use Tax Monthly Report for previous month- October 20, November 21 and December 20
- Sales & Use Tax 2nd Prepayment-October 24, Novemer 28 and December 27
Sales Tax Rates in the state of Arkansas
You can look up the sales tax rates at the Arkansas Department of Finance and Administration website. You can also filter rates by address or zip code.
