Sales Tax Articles
Sales Tax State Activity Update - March 2008
Arkansas Welcomes Lovely Rita Utility Meter Maid for Manufacturers
Arkansas's Department of Finance and Administration (DFA) has finalized the rule that addresses the reduced rate of sales tax applying to the direct use of gas and electricity in a manufacturing environment.
The state tax rate of 4.5 % went into effect on July 1, 2007. The state rate will drop another ½% to 4 % beginning July1, 2008.
Using the NAICS codes as a guide for classifying manufacturing activities, all discrete and process related manufacturing entities that are included in sectors 31 to 33 can qualify for this partial exemption. In order to qualify, manufacturers must register with the DFA using their form ET185A (Application for Reduced Rate for Natural Gas or Electricity Used or Consumed by Manufacturers).
The rule and application provide definitions that describe the beginning and ending point of the manufacturing process. As well, guidelines are given for determining the relationship between direct and indirect processes when a single meter delivers power to both areas of manufacturing facilities. A partial exemption is available to those situations with Mixed Use Meters. Once approved, the certificate is in effect for 36 months. Note that full local taxes still apply.
If companies have not already done so, a refund process is available. See the DFA form ET185R for listing the time period and meters covered for the request. The form is available on the State's website and is titled: Mfg Utility Reduced Tax – Refund Request.
Mark your calendars to ensure that you pick up the reduction in the tax rate to 4% which becomes effective on July 1, 2008.
The full text can be accessed on the Arkansas.gov Website.
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