1. (a) EFT by automated clearinghouse credit. The following conditions must be met on or before the due date for the withholding tax payment:

   1. (1)

      1. (A) The service provider initiates a successful prenote or test transaction containing necessary information in cash concentration or disbursement plus tax payment addendum (CCD + TXP) format.
      2. (B) The term "tax payment addendum format":

2. (i) Means a technical format for the communication of limited tax remittance data accompanying a payment through the automated clearinghouse system; and

   1. (ii) Includes a list of standard tax-type and account-type codes.

      1. (C) The Arkansas withholding CCD + TXP format is attached as an addendum to this part;

   2. (2) The transfer contains an electronic addenda which allows the Revenue Division of the Department of Finance and Administration to identify the:

      1. (A) Names and account numbers of the taxpayers;
      2. (B) Tax type;
      3. (C) Tax periods;
      4. (D) Amount of the payment; and
      5. (E) Amount of the payment to be applied to the account of each taxpayer;
   3. (3) The service provider transfers the amount of funds due; and
   4. (4) The service provider’s designated bank account contains adequate funds to cover the credit transfer at the time the credit transaction is initiated and continuing through the due date of the tax payment.

3. (b)

   1. (1) A service provider will be considered by the division to have failed to pay withholding taxes by EFT if the conditions set forth in subsection (a) of this section are not satisfied.

   2. (2) A service provider will be notified in writing by the division when it fails to meet the conditions for a reporting period.

      1. (c) A taxpayer required under Arkansas Code § 26-19-105 to pay withholding taxes by EFT that fails to pay the amount due under Arkansas law on or before the due date for such taxes can be assessed a penalty of five percent (5%) of the total amount of taxes due.

Codification Notes: “EFT” means electronic funds transfer.