The following persons and organizations are not subject to withholding by a pass-through entity:

1. (1) Nonresident members whose income has been determined by the Department of Finance and Administration not to be subject to withholding;
2. (2) Nonresident members whose income is exempt from Arkansas income tax under Arkansas Code § 26-51-202(e);
3. (3) Nonresident members who have a pro rata or distributive share of income of the pass-through entity from doing business in or deriving income from sources within Arkansas of less than one thousand dollars ($1,000) per year;
4. (4) Nonresident members who elect to have the tax due paid as part of a composite return (Form AR1000CR) filed by the pass-through entity under Arkansas Code § 26-51-919(d);
5. (5) Organizations granted an exemption under Section 501(c)(3) of the Internal Revenue Code;
6. (6) Insurance companies subject to the Arkansas insurance premium tax and therefore exempt from Arkansas income tax pursuant to Arkansas Code § 26-57-602; or

7. (7) Nonresident members who have submitted an affidavit (Form AR4PT) that meets the following requirements:

   1. (A)

      1. (i) In the affidavit, the nonresident member agrees to be subject to the personal jurisdiction of the department and the courts of Arkansas for the purpose of determining and collecting any Arkansas taxes, including estimated tax payments, together with any related interest and penalties.
      2. (ii) See 26 CAR § 63-110 for the procedure to be followed in filing the affidavit;
   2. (B) For nonresident partners filing Form AR4PT, the inclusion of the partner’s income within the composite income tax return (AR1000CR) will satisfy the requirements contained in the affidavit;
   3. (C) For nonresident shareholders filing Form AR4PT, inclusion of the nonresident shareholder's income in the composite income tax return will satisfy the requirements contained in the affidavit; and
   4. (D) For nonresident beneficiaries filing Form AR4PT, the inclusion of the beneficiary's income within the composite income tax return will satisfy the requirements contained in the affidavit.