1. (a) Definitions. As used in this section:

   1. (1) “Advertising agency” means a business that provides comprehensive, professional advertising services, including, but not limited to:

      1. (A) Artwork;
      2. (B) Concepting;
      3. (C) Designing; and
      4. (D) Any other creative services necessary to create, plan, and implement an advertising scheme; and
   2. (2) “Advertising services” means those professional services provided by an advertising agency when designing and implementing an advertising campaign for a customer.

2. (b)

   1. (1) Advertising services shall not be subject to gross receipts tax.
   2. (2) Advertising agencies must pay the Arkansas gross receipts or use tax on all property and taxable services that they purchase or consume in providing advertising services.
   3. (3) The sale of caps, pencils, mugs, shirts, or any other item of tangible personal property that contains the name, logo, picture, or other message designed by the purchaser is subject to the gross receipts tax if the sale is made by a retail business engaged in the sale of advertising materials.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-52-401(13)"