Arkansas sales tax exemption certificate

Arkansas sales tax exemption certificate

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A sales tax is a tax on the sale of certain goods and services that is paid to a governing body (state or local). Arkansas enacted its first general state sales tax in 1935, and the rate has since risen to 6.5 percent. There may be one or more municipal sales taxes, as well as one or more special district taxes, in addition to the state sales tax, each of which may range from 0% to 5%. Combined sales tax rates in Arkansas currently range from 6.5 percent to 11.5 percent, depending on where the sale is made.
When you sell taxable goods or services, you act as an agent for the state of Arkansas, collecting tax from customers and remitting it to the appropriate tax authority. Arkansas’ Department of Finance and Administration is in charge of sales and use tax administration (DFA).
The state of Arkansas owns any sales tax levied from consumers, not you. It is your responsibility to keep track of the taxes you collect in order to comply with state and local regulations. Penalties and interest charges may be imposed if this is not done.

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When a company buys inventory to resell, it is exempt from paying sales tax. To do so, the retailer must provide their vendor with an Arkansas Sales Tax Exemption Certificate (also known as a Resale Certificate).
When retailers buy goods to resell, they often do not pay sales tax to the supplier. Sales tax will still be collected, but instead of the retailer paying it, the customer will be charged sales tax on the final value of the goods. The retailer then sends the sales tax collected to the Arkansas Department of Finance and Administration.
When a pet store buys dog toys from a supplier to sell in the store, for example, the pet store owner usually doesn’t have to pay sales tax to the supplier. When a customer (or end-user) buys a dog toy, the retailer will charge them sales tax based on the total price of the toy. The retailer will collect sales tax from all transactions and send it to the state on a regular basis (usually at the end of the month).

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When a company buys inventory to resell, it is exempt from paying sales tax. To do so, the retailer must provide their vendor with an Arkansas Sales Tax Exemption Certificate (also known as a Resale Certificate).
When retailers buy goods to resell, they often do not pay sales tax to the supplier. Sales tax will still be collected, but instead of the retailer paying it, the customer will be charged sales tax on the final value of the goods. The retailer then sends the sales tax collected to the Arkansas Department of Finance and Administration.
When a pet store buys dog toys from a supplier to sell in the store, for example, the pet store owner usually doesn’t have to pay sales tax to the supplier. When a customer (or end-user) buys a dog toy, the retailer will charge them sales tax based on the total price of the toy. The retailer will collect sales tax from all transactions and send it to the state on a regular basis (usually at the end of the month).

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It is critical to understand and comply with the sales tax requirements in the states where you do business. More states are taxing both services and retail sales, so no business owner can afford to be caught off guard. In addition, you may be liable for use taxes on items acquired outside of the state. This article answers some of the most common questions about Arkansas sales tax.
Arkansas levies a sales tax that is based on gross receipts. The gross receipts tax applies to sales of tangible personal property or services to contractors, as well as sales to customers or users.
Leases are a type a contract.
The lease or rental of tangible personal property is included in Arkansas’ definition of sale. The tax is calculated on the basis of the lessor’s rental or lease payments. A rental vehicle tax is levied instead of a gross receipts tax on gross receipts derived from rentals of licensed motor vehicles rented for 30 days or less. Diesel trucks rented or leased for freight shipping, as well as farm machinery or equipment rented or leased for a commercial purpose, are exempt from the rental vehicle tax. The tax does not apply to trucks powered by gasoline or diesel that are rented or leased for residential moving or freight.

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