As used in this subpart:

1. (1) “Commissioner” means and refers to the Commissioner of Revenue of the State of Arkansas or any of his or her duly authorized agents;
2. (2) “Consumer” means a person to which the taxable sale is made or to which a taxable service is furnished;

3. (3)

   1. (A) “Department” means and refers to the Department of Finance and Administration and its agents.
   2. (B) For purposes of this subpart, the terms “department” and “DFA” may be used interchangeably;
4. (4) “Engage in business” means any local activity regularly and persistently pursued by any seller or vendor through agents, employees, or representatives with the object of gain, profit, or advantage and that results in a sale, delivery, or the transfer of the physical position of any tangible personal property by the vendor to the vendee at or from any point within Arkansas, whether from warehouse, store, office, storage point, rolling store, motor vehicle, delivery conveyance, or by any method or device under the control of the seller effecting such a local delivery without regard to the terms of sale with respect to point of acceptance of the order, point of payment, or any other condition;

5. (5)

   1. (A) “Gross receipts” or “gross proceeds” means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise.

   2. (B) “Gross receipts” or “gross proceeds” includes consideration received by the seller from third parties as follows:

      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)
6. (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.

7. (2) (2) See 26 CAR § 30-901.

   1. (C) The following cannot be deducted from gross receipts or gross proceeds:

      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 gross receipts or gross proceeds and not taxable unless it is a specifically taxable service.

   3. (E) “Gross receipts” or “gross proceeds” 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;
8. (6) “Long-term rental” means a lease of thirty (30) days or more to a single consumer;
9. (7) “Motor vehicle” means a vehicle that is self-propelled and is required to be registered for use on the highway;

10. (8)

    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;

11. (9)

    1. (A)

       1. (i) “Sale” means any transaction resulting in the transfer of either the title or possession, for a valuable consideration, of tangible personal property or services regardless of the manner, method, instrumentality, or device by which such transfer is accomplished.
       2. (ii) “Sale” includes the exchange, barter, lease, or rental of tangible personal property or services, or the sale, exchanging, or other disposition of admissions, dues, or fees to clubs, places of amusement, or recreational or athletic events or for the privilege of having access to or the use of amusement, athletic, or entertainment facilities.
    2. (B) “Sale” does not include the transfer of title to a vehicle by the vehicle owner to an insurance company as a result of the settlement of a claim for damages to the vehicle.

    3. (C)

       1. (i) In the case of leases or rentals of tangible personal property, including motor vehicles and trailers, for less than thirty (30) days, the tax shall be paid on the basis of rental or lease payments made to the lessor of such tangible personal property during the term of the lease or rental regardless of whether Arkansas gross receipts or compensating use tax was paid by the lessor at the time of the purchase of the tangible personal property.
       2. (ii) In the case of leases or rentals of tangible personal property, including motor vehicles and trailers, for more than thirty (30) days, the tax shall be paid on the basis of rental or lease payments made to the lessor of such tangible personal property during the term of the lease or rental unless Arkansas gross receipts or compensating use tax was paid at the time of purchase of the tangible personal property.
       3. (iii) See 26 CAR § 30-1002.
    4. (D) A financing arrangement that only gives a lender a security interest in tangible personal property will not subject such lender to the tax, if, prior to such financing arrangement, either the Arkansas gross receipts or compensating use tax has been paid on the purchase price of the tangible personal property by one of the parties to the financing arrangement;
12. (10) “Secretary” means the Secretary of the Department of Finance and Administration or any of his or her authorized agents;
13. (11) “Short-term rental” means a rental or lease of tangible personal property for a period of less than thirty (30) days to a single consumer;
14. (12) “Tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched or that is in any other manner perceptible to the senses; and
15. (13) “Taxpayer” means any person liable to remit a tax levied by Arkansas Special Excise Taxes, Arkansas Code § 26-63-101 et seq., or to make a report for the purpose of claiming any exemption from payment of a tax levied by Arkansas Code § 26-63-101 et seq.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-63-102"