An act TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS 10 TAX, the official text

Stricken language would be deleted from and underlined language would be added to present law.

1 State of Arkansas              As Engrossed: H4/7/25 H4/14/25
2 95th General Assembly
                                          A Bill

3 Regular Session, 2025                                            HOUSE BILL 1671

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5 By: Representative L. Johnson

6 By: Senator J. Boyd

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8                                For An Act To Be Entitled

9   AN ACT TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS

10  TAX; TO CREATE A GENERAL SALES AND USE TAX EXEMPTION

11  FOR SALES TO QUALIFIED NONPROFIT ORGANIZATIONS; AND

12  FOR OTHER PURPOSES.

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15                                   Subtitle

16                       TO AMEND THE LAW CONCERNING THE GROSS

17                       RECEIPTS TAX; AND TO CREATE A GENERAL

18                       SALES AND USE TAX EXEMPTION FOR SALES TO

19                       QUALIFIED NONPROFIT ORGANIZATIONS.

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21 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

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23  SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 4, is

24 amended to add an additional section to read as follows:

25  26-52-457. Sales to qualified nonprofit organization -- Definition.

26  (a) As used in this section, "qualified nonprofit organization" means

27 an organization described in 26 U.S.C. � 501(c)(3), as it existed on January

28 1, 2025, that:

29  (1) Has an annual operating budget of less than two hundred

30 thousand dollars ($200,000); and

31  (2) Performs charitable community-based services in the state to

32 benefit residents of the state that are in need of assistance.

33  (b) The gross receipts or gross proceeds derived from the sale of

34 tangible personal property, specified digital products, a digital code, or

35 services are exempt from the gross receipts tax levied by this chapter and

36 the compensating use tax levied by the Arkansas Compensating Tax Act of 1949,

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1 � 26-53-101 et seq., if:

2   (1) The sale is made to a qualified nonprofit organization; and

3   (2) If the sale is of tangible personal property, the tangible

4 personal property sold to the qualified nonprofit organization is not:

5   (A) A motor vehicle;

6   (B) A motorboat;

7   (C) An aircraft or airplane;

8   (D) An alcoholic beverage;

9   (E) Tobacco;

10  (F) A computer;

11  (G) A material used to construct a residential or

12 commercial structure;

13  (H) A household appliance;

14  (I) A mobile telephone or cellular telephone;

15  (J) An all-terrain vehicle; or

16  (K) A television.

17  (c) A nonprofit organization requesting recognition as a qualified

18 nonprofit organization shall file with the Secretary of the Department of

19 Finance and Administration an application as prescribed by the secretary

20 verifying the facts upon which the nonprofit organization claims the

21 exemption under this section.

22  (d)(1) Upon receipt of an application described in subsection (c) of

23 this section, the secretary shall respond in writing within a reasonable time

24 after the filing of the application either issuing an exemption certificate

25 to the qualified nonprofit organization or denying the application.

26  (2) If an application is denied, an explanation of the reason

27 for denial shall accompany the denial.

28  (3) If the secretary finds that a nonprofit organization no

29 longer meets the conditions to be a qualified nonprofit organization, the

30 secretary shall revoke an exemption certificate.

31  (e) The secretary may promulgate rules to implement this section,

32 including but not limited to rules regarding:

33  (1) An application process; and

34  (2) A reverification process.

35  (f) The secretary shall report annually to the Legislative Council the

36 number of exemption certificates that have been issued to qualified nonprofit

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1 organizations during the prior one (1) year period.

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3   SECTION 2. EFFECTIVE DATE. Section 1 of this act is effective on the

4 first day of the calendar quarter following the effective date of this act.

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6                                   /s/L. Johnson

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