For the purposes of this part, unless otherwise required by their context, the following definitions apply:

1. (1)

   1. (A) “Commissioner” means and refers to the Commissioner of Revenue of the State of Arkansas or any of his or her duly authorized agents.
   2. (B) For purposes of this part, the terms “commissioner” and “director” may be used interchangeably;
2. (2) “Consumption” means a using up or wearing away of tangible personal property or taxable services that constitutes the final and ultimate employment of the tangible personal property or taxable services;
3. (3) “Department” means and refers to the Department of Finance and Administration;

4. (4)

   1. (A) “Distribution” means effectuating the delivery or deployment of tangible personal property or taxable services in this state, either directly or indirectly, and encompasses a taxpayer’s directing another to deliver to intended recipients property to which the taxpayer holds legal title or taxable services.
   2. (B) Promotional materials, such as catalogs, sent into this state via interstate mail are considered to be distributed for purposes of the use tax;

5. (5)

   1. (A) “Person” includes any:

      1. (i) Individual;
      2. (ii) Partnership;
      3. (iii) Limited liability company;
      4. (iv) Limited liability partnership;
      5. (v) Corporation;
      6. (vi) Estate;
      7. (vii) Trust;
      8. (viii) Fiduciary; or
      9. (ix) Other legal entity.
   2. (B) “Person” includes the state and any county, city, municipality, school district, or any other political subdivision or combination acting as a unit, in the plural or singular number;

6. (6)

   1. (A) “Purchase” means the sale of tangible personal property or taxable services by a vendor to a person for the purpose of storage, use, consumption, or distribution in this state.
   2. (B) The term “purchase” also includes any withdrawal of tangible personal property from a stock or reserve maintained out of the state by any person and subsequently brought into this state and thereafter stored, consumed, used, or distributed by that person or by any other person.
   3. (C) In such an event, the tax shall be computed on the value of such tangible personal property at the time it is brought into this state.
   4. (D) No tax shall be computed to the extent that a withdrawal consists of carbonaceous materials such as petroleum coke or carbon anodes that are to be directly used or consumed in the electrolytic reduction process of producing tangible personal property for ultimate sale at retail;
7. (7) “Purchase price”: see subdivision (9) of this section;
8. (8) “Purchaser” means a person to whom a sale of tangible personal property is made or to whom a taxable service is furnished;

9. (9)

   1. (A) “Sale” means any transfer, barter, or exchange of the title or ownership of tangible personal property or taxable services or the right to use, store, consume, or distribute the same for a consideration paid or to be paid, in installments or otherwise, and includes any transaction whether called leases, rentals, bailments, loans, conditional sales, or otherwise, notwithstanding that the title or possession of said property, or both, is retained for security.
   2. (B) For the purpose of this section the sale of tangible personal property or taxable services shall be sourced according to Arkansas Code §§ 26-52-521 and 26-52-522 and 26 CAR § 30-1207;

10. (10)

    1. (A) “Sales price” is synonymous with “purchase price” and means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or taxable services are sold, leased, or rented, valued in money, whether received in money or otherwise.

    2. (B) “Sales price” includes consideration received by the seller from third parties if:

       1. (i) The seller actually receives the consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
       2. (ii) The seller has an obligation to pass the price reduction or discount through to the purchaser;
       3. (iii) The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and

       4. (iv) One (1) of the following criteria is met:

          1. (a) (a) The purchaser presents a coupon, certificate, or other documentation to the seller to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate, or documentation is presented;
          2. (b) (b) The purchaser identifies himself or herself to the seller as a member of a group or organization entitled to a price reduction or discount (a “preferred customer” card that is available to any patron does not constitute membership in such a group); or
       5. (c)
11. (1) (c)(1) The price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.

12. (2) (2) See 26 CAR § 30-901.

    1. (C) The following cannot be deducted from the sales price or purchase price:

       1. (i) The seller’s cost of the property sold;
       2. (ii) The cost of materials used, labor or service cost, interest, any loss, any cost of transportation to the seller, any tax imposed on the seller, and any other expense of the seller;
       3. (iii) Any charge by the seller for any service necessary to complete the sale, other than a delivery charge or an installation charge;
       4. (iv) Delivery charge;

       5. (v)

          1. (a) (a) The value of exempt tangible personal property given to the purchaser if taxable and exempt tangible personal property have been bundled together and sold by the seller as a single product or piece of merchandise.
          2. (b) (b) See the definition of “bundled transaction” in this section and 26 CAR § 30-1226 for the treatment of bundled transactions; and
       6. (vi) Credit for any trade-in unless specifically provided by law.
    2. (D) A separately stated installation charge is not part of the sales price and not taxable unless it is a specifically taxable service.

    3. (E) The term “sales price” or “purchase price” does not include the following:

       1. (i) A discount including cash, term, or a coupon that is not reimbursed by a third party and that is allowed by a seller and taken by a purchaser on a sale;
       2. (ii) Interest, financing, or a carrying charge from credit extended on the sale of tangible personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and
       3. (iii) Any tax legally imposed directly on the consumer that is separately stated on the invoice, bill of sale, or similar document given to the purchaser;

13. (11)

    1. (A) “Storage” means and includes any keeping or retention in this state of tangible personal property or taxable services purchased from a vendor for any purpose, except sale or subsequent use solely outside this state.
    2. (B) If a “use” of the tangible personal property or taxable services occurs in this state within the scope of subdivision (11) of this section, the use tax will apply to the tangible personal property or taxable services even though the tangible personal property or taxable services is stored and subsequently used outside this state;

14. (12)

    1. (A) “Use”, with respect to tangible personal property, means and includes the exercise of any right or power over tangible personal property incidental to the ownership or control of that property, except that it shall not include the sale of that property in the regular course of business.
    2. (B) With respect to taxable services, “use” means the privilege of using the service, enjoyment of the service, or the first act within this state by which the purchaser takes or assumes dominion or control of the service or the article of tangible personal property upon which the service was performed; and

15. (13)

    1. (A)

       1. (i) “Vendor” means and includes:

          1. (a) (a) Every person engaged in making sales of tangible personal property or taxable services by mail order, by advertising, or by agent, by peddling tangible personal property or taxable services, by soliciting, or by taking orders for sales of same, for storage, use, consumption, or distribution in this state; and
          2. (b) (b) All salesmen, solicitors, hawkers, representatives, consignees, peddlers, or canvassers as agents of the dealers, distributors, consignors, supervisors, principals, or employers under whom they operate or from whom they obtain tangible personal property or taxable services sold by them.
       2. (ii) Irrespective of whether persons are making sales on their own behalf or on behalf of others, or whether any formal agency relationship exists, such persons are regarded as vendors.

    2. (B)

       1. (i) A person or enterprise that sells tangible personal property or taxable services for storage, use, distribution, or consumption in Arkansas is a vendor for the purposes of this subpart when that person or enterprise has a physical presence in Arkansas either directly or through another person or enterprise to the full extent allowed by the United States Constitution Art. I, § 8, cl. 3.
       2. (ii) A taxpayer who may be deemed a vendor under this subpart with respect to any sale shall be deemed a vendor for all sales of tangible personal property or taxable services for storage, use, distribution, or consumption in Arkansas regardless of the circumstances of any particular sale.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-53-102"