Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 SENATE BILL 316
4
5 By: Senator B. Johnson
6 By: Representative Beaty Jr.
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE SALES AND USE TAX LAWS CONCERNING
10 REBATES; TO REQUIRE THAT SALES AND USE TAX REBATES BE
11 ADMINISTERED AS REFUNDS; AND FOR OTHER PURPOSES.
12
13
14 Subtitle
15 TO AMEND THE SALES AND USE TAX LAWS
16 CONCERNING REBATES; AND TO REQUIRE THAT
17 SALES AND USE TAX REBATES BE
18 ADMINISTERED AS REFUNDS.
19
20 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
21
22 SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 1, is
23 amended to add an additional section to read as follows:
24 26-52-112. Refunds.
25 Except as otherwise provided by law, a refund provided under this
26 chapter or the Arkansas Compensating Tax Act of 1949, � 26-53-101 et seq.
27 shall be automatically provided to the taxpayer entitled to the refund.
28
29 SECTION 2. Arkansas Code � 26-52-427 is amended to read as follows:
30 26-52-427. Property purchased for use in performance of construction
31 contract -- Definition.
32 (a) A contractor that purchases tangible personal property which
33 becomes a recognizable part of a completed structure or improvement to real
34 property and which is purchased for use or consumption in the performance of
35 construction contracts shall be entitled to a rebate on refund of any
36 additional gross receipts tax or compensating use tax levied by the state or
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1 any city or county if:
2 (1) The construction contract for which the tangible personal
3 property was purchased is entered into prior to the effective date of the
4 levy of the additional state, city, or county gross receipts tax or
5 compensating use tax; and
6 (2) The contractor paid the additional gross receipts or
7 compensating use tax to the seller.
8 (b) As used in this section, "construction contract" means a contract
9 to construct, manage, or supervise the construction, erection, or substantial
10 modification of a building or other improvement or structure affixed to real
11 property. "Construction contract" shall not mean a contract to produce
12 tangible personal property.
13 (c) The rebate refund provided by this section shall apply to tangible
14 personal property purchased within five (5) years from the effective date of
15 the levy of the additional state, city, or county gross receipts tax or
16 compensating use tax.
17 (d) The rebate refund provided by this section shall not apply to
18 cost-plus contracts which allow the contractor to pass any additional tax on
19 to the principal as a part of the contractor's costs.
20 (e) Interest shall not accrue or be paid on an amount subject to a
21 claim for rebate pursuant to refund under this section.
22 (f) The Secretary of the Department of Finance and Administration
23 shall promulgate rules and prescribe forms for claiming a rebate as provided
24 by the method of providing a refund under this section.
25
26 SECTION 3. Arkansas Code � 26-52-447(f)-(i), concerning the sales tax
27 exemption related to the partial replacement and repair of certain machinery
28 and equipment, are repealed.
29 (f) A taxpayer may claim the benefit of the tax refund under this
30 section only by using one (1) of the following methods:
31 (1)(A) Both:
32 (i) Obtaining a direct pay or a limited direct pay
33 sales and use tax permit from the Department of Finance and Administration;
34 and
35 (ii) Self-refunding:
36 (a) At the time the taxpayer files his or her
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1 original sales and use tax report; or
2 (b) By later filing an amended sales or use
3 tax report with the department.
4 (B) The statutes of limitation stated in � 26-18-306 apply
5 to claims made under this subdivision (f)(1).
6 (C) Interest shall not accrue or be paid on a refund
7 claimed under this subdivision (f)(1); or
8 (2)(A) Beginning July 1, 2018, for a taxpayer that does not hold
9 a direct pay or limited direct pay permit, holds an active Arkansas sales and
10 use tax permit, and files sales and use tax reports with the department,
11 filing a claim for a credit or rebate with the department.
12 (B)(i) The credit or rebate authorized under this
13 subdivision (f)(2) shall be obtained only by offsetting the amount of the
14 claimed credit or rebate against the state tax to be remitted with the
15 taxpayer's sales and use tax reports.
16 (ii) If the total amount of the credit or rebate
17 authorized under this subdivision (f)(2) is greater than the amount of the
18 state tax to be remitted with the taxpayer's sales and use tax reports, the
19 taxpayer is entitled to a refund of the difference between the amount of the
20 tax owed and the amount of the credit or rebate authorized under this
21 subdivision (f)(2).
22 (C) A taxpayer claiming a credit or rebate under this
23 subdivision (f)(2) shall electronically file all sales and use tax reports.
24 (D) A claim for credit or rebate under this subdivision
25 (f)(2) shall not be paid for a claim filed more than one (1) year following
26 the date of the qualifying sale or more than one (1) year following the date
27 of payment, whichever is later.
28 (E) Interest shall not accrue or be paid on an amount
29 subject to a claim for a credit or rebate under this subdivision (f)(2).
30 (g) A claim for a credit or rebate shall not be paid under subdivision
31 (f)(2) of this section for a sale made before July 1, 2018.
32 (h) A taxpayer shall not claim the benefit of the refund under this
33 section by filing a verified claim for refund with the department.
34 (i) The following provisions of the Arkansas Tax Procedure Act, � 26-
35 18-101 et seq., apply to claims for a refund under this section:
36 (1) The time limitations that apply to claims for a refund of an
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1 overpayment of state tax; and
2 (2) The procedures that apply to the disallowance or proposed
3 disallowance of claims for a refund.
4
5 SECTION 4. Arkansas Code � 26-52-523(b)-(g), concerning the credit or
6 rebate on local sales and use tax, are amended to read as follows:
7 (b)(1) A purchaser that pays any municipal sales or use tax in excess
8 of the tax due on the first two thousand five hundred dollars ($2,500) of
9 gross receipts or gross proceeds from the purchase of a travel trailer or
10 from a qualifying purchase of tangible personal property, specified digital
11 products, a digital code, or a taxable service in a single transaction is
12 entitled to a credit or rebate refund of the excess amount of municipal sales
13 or use tax paid on each single transaction.
14 (2) A purchaser that pays any county sales or use tax in excess
15 of the tax due on the first two thousand five hundred dollars ($2,500) of
16 gross receipts or gross proceeds from the purchase of a travel trailer or
17 from a qualifying purchase of tangible personal property, specified digital
18 products, a digital code, or a taxable service in a single transaction is
19 entitled to a credit or rebate refund of the excess amount of county sales or
20 use tax paid on each single transaction.
21 (c)(1) A purchaser that is required by � 26-52-501, � 26-52-509, or �
22 26-53-125 to file a sales or use tax return may file a claim for a credit or
23 rebate refund under this section with the Secretary of the Department of
24 Finance and Administration in connection with the sales or use tax return and
25 offset the amount of credit or rebate refund claimed against any municipal or
26 county sales or use tax due to be remitted with the return.
27 (2) A The secretary shall automatically issue a refund to a
28 purchaser that qualifies for a credit or rebate refund under this section and
29 is not required to file a sales or use tax return as provided in subdivision
30 (c)(1) of this section may file a claim for a credit or rebate under this
31 section with the secretary.
32 (3) If a rebate refund would be due under this section as a
33 result of the purchase of a travel trailer and if the gross receipts or
34 compensating use tax on the travel trailer is collected directly from the
35 purchaser by the Department of Finance and Administration under � 26-52-510
36 or � 26-53-126, then the department shall collect only the amount of tax due
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1 less the amount to which the purchaser would be entitled under the rebate
2 refund provisions of this section.
3 (d) A credit or rebate under this section shall not be paid for a
4 claim filed more than one (1) year following the date of the qualifying
5 purchase or more than one (1) year following the date of payment, if later.
6 (e) A claim for a credit or rebate under this section shall be filed
7 with the local taxing jurisdiction if, at the time the claim is filed, the
8 local sales or use tax that is the subject of the claim has been out of
9 existence for more than sixty (60) days.
10 (f) No interest shall accrue or be paid on an amount subject to a
11 claim for a credit or rebate refund under this section.
12 (g)(e) The secretary may promulgate rules to administer this section,
13 including without limitation providing an administratively feasible method
14 for filing a claim for a credit or rebate providing refunds and any necessary
15 forms.
16
17 SECTION 5. Arkansas Code � 26-53-138 is amended to read as follows:
18 26-53-138. Exemption for property purchased for use in performance of
19 construction contract -- Definition.
20 (a) A contractor that purchases tangible personal property which
21 becomes a recognizable part of a completed structure or improvement to real
22 property and which is purchased for use or consumption in the performance of
23 construction contracts shall be entitled to a rebate on refund of any
24 additional gross receipts tax or compensating use tax levied by the state or
25 any city or county if:
26 (1) The construction contract for which the tangible personal
27 property was purchased is entered into prior to the effective date of the
28 levy of the additional state, city, or county gross receipts tax or
29 compensating use tax; and
30 (2) The contractor paid the additional gross receipts or
31 compensating use tax to the seller.
32 (b) As used in this section, "construction contract" means a contract
33 to construct, manage, or supervise the construction, erection, or substantial
34 modification of a building or other improvement or structure affixed to real
35 property. "Construction contract" shall not mean a contract to produce
36 tangible personal property.
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1 (c) The rebate refund provided by this section shall apply to tangible
2 personal property purchased within five (5) years from the effective date of
3 the levy of the additional state, city, or county gross receipts tax or
4 compensating use tax.
5 (d) The rebate refund provided by this section shall not apply to
6 cost-plus contracts which allow the contractor to pass any additional tax on
7 to the principal as a part of the contractor's costs.
8 (e) Interest shall not accrue or be paid on an amount subject to a
9 claim for rebate pursuant to refund under this section.
10 (f) The Secretary of the Department of Finance and Administration
11 shall promulgate rules and prescribe forms for claiming a rebate as provided
12 by the method of providing a refund under this section.
13
14 SECTION 6. Arkansas Code � 26-53-149(f)-(i), concerning the use tax
15 exemption related to the partial replacement and repair of certain machinery
16 and equipment, are repealed.
17 (f) A taxpayer may claim the benefit of the tax refund under this
18 section only by using one (1) of the following methods:
19 (1)(A) Both:
20 (i) Obtaining a direct pay or a limited direct pay
21 sales and use tax permit from the Department of Finance and Administration;
22 and
23 (ii) Self-refunding:
24 (a) At the time the taxpayer files his or her
25 original sales and use tax report; or
26 (b) By later filing an amended sales or use
27 tax report with the department.
28 (B) The statutes of limitation stated in � 26-18-306 apply
29 to claims made under this subdivision (f)(1).
30 (C) Interest shall not accrue or be paid on a refund
31 claimed under this subdivision (f)(1); or
32 (2)(A) Beginning July 1, 2018, for a taxpayer that does not hold
33 a direct pay or limited direct pay permit, holds an active Arkansas sales and
34 use tax permit, and files sales and use tax reports with the department,
35 filing a claim for the credit or rebate with the department.
36 (B)(i) The credit or rebate authorized under this
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1 subdivision (f)(2) shall be obtained only by offsetting the amount of the
2 claimed credit or rebate against the state tax to be remitted with the
3 taxpayer's sales and use tax reports.
4 (ii) If the total amount of the credit or rebate
5 authorized under this subdivision (f)(2) is greater than the amount of the
6 state tax to be remitted with the taxpayer's sales and use tax reports, the
7 taxpayer is entitled to a refund of the difference between the amount of the
8 tax owed and the amount of the credit or rebate authorized under this
9 subdivision (f)(2).
10 (C) A taxpayer claiming a credit or rebate under this
11 subdivision (f)(2) shall electronically file all sales and use tax reports.
12 (D) A claim for credit or rebate under this subdivision
13 (f)(2) shall not be paid for a claim filed more than one (1) year following
14 the date of the qualifying purchase or more than one (1) year following the
15 date of payment, whichever is later.
16 (E) Interest shall not accrue or be paid on an amount
17 subject to a claim for a credit or rebate under this subdivision (f)(2).
18 (g) A claim for a credit or rebate shall not be paid under subdivision
19 (f)(2) of this section for a purchase made before July 1, 2018.
20 (h) A taxpayer shall not claim the benefit of the refund under this
21 section by filing a verified claim for refund with the department.
22 (i) The following provisions of the Arkansas Tax Procedure Act, � 26-
23 18-101 et seq., apply to claims for a refund under this section:
24 (1) The time limitations that apply to claims for a refund of an
25 overpayment of state tax; and
26 (2) The procedures that apply to the disallowance or proposed
27 disallowance of claims for a refund.
28
29 SECTION 7. EFFECTIVE DATE. Sections 1-6 of this act are effective on
30 the first day of the calendar quarter following the effective date of this
31 act.
32
33
34
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36
7 02/26/2025 12:00:48 PM JLL240Every fact on this page links to its source, starting with the official bill record.