1. (a)

   1. (1) All taxpayers (i.e., employers) that use a service provider to report and remit Arkansas withholding tax must be registered with the Revenue Division of the Department of Finance and Administration to withhold Arkansas income tax.

   2. (2) Current clients.

      1. (A) In order to allow the division to verify current clients of service providers, service providers shall immediately transmit to the division a list identifying all of the service providers’ clients that are required to withhold, report, and remit Arkansas income tax.
      2. (B) The transmission shall be performed electronically using the following format: Record type pic x (a-add, d-delete). Service Provider FEIN pic 9 (9). Service Provider name pic x (40). Customer FEIN pic 9 (9). Customer name pic x (40).
      3. (C) The information transmitted by the service providers will be compared to the division’s current withholding tax database.
      4. (D) Service providers will be notified by the division of any clients that are not currently registered with the division to withhold Arkansas income tax.
      5. (E) Service providers are responsible for promptly:

2. (i) Obtaining completed Withholding Registration forms (AR4ER) from such clients; and

   1. (ii) Submitting the forms to the division.

   2. (3) New clients.

      1. (A)

         1. (i) If a service provider’s new client is already registered with the division to withhold Arkansas income tax, the service provider must furnish proof to the division that the new client is indeed registered.
         2. (ii) If the new client is not registered with the division to withhold Arkansas income tax, the service provider is responsible for promptly:
3. (a) (a) Obtaining a completed Withholding Registration form (AR4ER) from the new client; and

4. (b) (b) Submitting the form to the division.

   1. (iii) Service providers have a forty-five-day grace period from the date they initially enroll a new client during which time the division will allow payment of a new client's withholding tax by check or money order.

      1. (B) Service providers must notify the division within fifteen (15) days after the date that they cease to provide services for a client.

5. (b) EFT authorization agreement.

   1. (1)

      1. (A) The service providers are responsible for enrolling their clients for electronic funds transfer.
      2. (B) The division will provide an enrollment process.
   2. (2) Soon after a client's enrollment form has been processed by the division and the division’s bank, the client will be notified that it has been accepted into the EFT system.

Codification Notes: “EFT” means electronic funds transfer.