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

   1. (1)

      1. (A) “Grooming” consists of any act performed to maintain or improve the appearance of a pet and includes, but is not limited to:

2. (i) Washing;

   1. (ii) Combing;

      1. (iii) Hair cutting; and

         1. (iv) Nail clipping.

      2. (B) This term shall not include services such as:

         1. (i) Teeth cleaning and dental work;
         2. (ii) Flea dipping;
         3. (iii) Treatments for skin disease; or
         4. (iv) Similar procedures;

   2. (2)

      1. (A) “Kennel service” means an establishment, other than a pound or animal shelter, where pets not owned by the proprietor are kept, sheltered, fed, and watered in return for:

         1. (i) Consideration;
         2. (ii) Profit; or
         3. (iii) Compensation.
      2. (B) This term shall include all boarding activities for varying periods of time and does not require an overnight stay.

      3. (C) This term shall not include:

         1. (i) Individuals who temporarily, and not in the normal course of business, board or care for animals owned by other individuals;
         2. (ii) Breeding services;
         3. (iii) Boarding as part of medical or veterinary treatment, observation, or care of an animal; or
         4. (iv) Horse stables; and

   3. (3)

      1. (A) A “pet” is any animal that has been tamed or gentled.

      2. (B) The term “pet” does not include:

         1. (i) Dogs trained to aid the handicapped or elderly;
         2. (ii) Dogs used in law enforcement;
         3. (iii) Greyhounds that are used in greyhound racing meets pursuant to the Arkansas Greyhound Racing Law, Arkansas Code § 23-111-101 et seq.; or
         4. (iv) Livestock such as:
3. (a) (a) Cattle;

4. (b) (b) Horses;

   1. (c) (c) Mules;

      1. (d) (d) Sheep; or
5. (e) (e) Hogs.

6. (b) Administration.

   1. (1)

      1. (A) The gross proceeds or gross receipts derived from pet grooming and kennel services are subject to state and local gross receipts taxes.
      2. (B) Gross receipts paid to any person who is not a veterinarian for the grooming of any dog or cat will be presumed to be gross receipts from the service of pet grooming and subject to tax.

   2. (2)

      1. (A) Grooming performed for veterinary purposes shall not be taxable if it is an integral part of the nontaxable service of veterinary care.
      2. (B) If grooming is done for both veterinary and cosmetic reasons, the primary purpose for the treatment will determine if tax should be collected.
      3. (C) It will be presumed that grooming activities such as washing, trimming, and cutting are for cosmetic purposes unless it can be shown that the treatment was primarily done for veterinary purposes.
      4. (D) In situations where the charge for the cosmetic treatment and the veterinary-related treatment can be invoiced separately, tax should be collected only on the cosmetic portion of the billing.
      5. (E) Taxable grooming services (those performed for cosmetic rather than medical reasons) are taxable even if they are billed by a veterinarian or veterinary clinic.
   3. (3) Persons or firms providing taxable grooming services are the consumers of supplies and equipment that are used or consumed by them in rendering their services and should pay tax on the purchase of these items.

   4. (4)

      1. (A) Persons or firms providing pet grooming services that the purchaser claims as an exempt transaction should refer to 26 CAR § 30-1210 concerning exemptions.

      2. (B) As an alternative to an exemption certificate, a seller may accept a certification from the purchaser that the:

         1. (i) Animal fits within one (1) of the categories enumerated in 26 CAR § 30-518(a)(3) and is not a pet; or
         2. (ii) Transaction is exempt for other reasons as provided by Arkansas law.

Codification Notes: This section as promulgated prior to codification into the Code of Arkansas Rules contained a footnote as follows: "Source: Ark. Code Ann. § 26-52-316"