Do you need to collect and remit sales tax in Arkansas?
As the world of entrepreneurship and business continues to grow and thrive, it’s even more crucial to stay informed and compliant with ever-evolving sales tax regulations. In Arkansas, businesses that sell tangible goods or provide taxable services must collect sales tax (also known as excise tax in Arkansas) from their customers and remit it to the Arkansas Department of Finance and Administration. This not only includes brick-and-mortar establishments but extends to online retailers and marketplace facilitators who meet revenue or transaction thresholds.
Do you have sales tax nexus in Arkansas?
Sales tax nexus refers to the connection or link a business has with a state. This connection obligates a company to collect and remit sales tax on transactions made within or to customers in Arkansas.
There are two types of sales tax nexus: physical and economic. Businesses with physical nexus have physical presence in a state, such as a retail store, warehouse, or office. Economic nexus is based on economic activity, i.e., gross sales made.
Physical sales tax nexus in Arkansas
According to Arkansas law, all vendors located and operating in Arkansas selling property or services subject to sales tax automatically have physical nexus. In general, all sales of tangible personal property are taxable in Arkansas, as well as many services. You can find a breakdown of what is taxable here.
Economic sales tax nexus in Arkansas
Economic nexus in Arkansas is triggered when that business’s gross sales and/or transactions in the current or previous year exceed $100,000 or 200, respectively.
Are marketplace facilitators required to collect and remit sales tax in Arkansas?
On July 1, 2019, Arkansas Legislature enacted a requirement that marketplace facilitators be responsible for collecting and remitting Arkansas state sales and use tax for products sold through their site. In other words, if you sell through a marketplace facilitator, you are not responsible for the tax collected on those sales.
What platforms are marketplace facilitators?
Not sure what defines a marketplace facilitator? In short, marketplace facilitators are companies that provide a platform or service for third-party sellers (you) to sell their products or services to customers. The facilitator collects payment from the customer, processes the transaction, and may also manage shipping and returns.
Filing Arkansas Sales Tax
After determining that your business has nexus in Arkansas, your first step to filing will be registering for a sales and use (excise) tax permit. Taxpayers who wish to register in Arkansas must do so online using Arkansas Taxpayer Access Point (ATAP). However, if you are a remote seller who needs to register in multiple states, Arkansas is a member of Streamlined Sales Tax, which is an online service dedicated to simplifying sales tax for remote retailers. Through Streamlined Sales Tax, you can submit a single application for any or all the 24 member states you need to collect and remit sales tax in. You can access the registration link here.
Note: There is a $50 permit fee for all in-state Arkansas businesses. This fee is waived for out-of-state or remote sellers registering in Arkansas.
Once you have registered and received your Arkansas sales and use tax permit, you can begin filing returns one of three ways:
- Online – Arkansas makes it easy to file sales as use (excise) tax returns on ATAP. This is Arkansas’ recommended way of filing, as taxpayers who have already registered with Arkansas will have an ATAP account.
- Paper Form – Businesses who wish to stick to the traditional ways can contact 501-682-7104 to request blank Arkansas Excise Tax Returns (ET-1). Forms will then be mailed and arrive in two to three weeks.
- Let us file for you! – If filing sales tax returns is too overwhelming or time-consuming, you’re not alone. Running a business is demanding work and filing tax returns is a nuisance. We at SalesTaxSolutions are here to make things easier! As a company, we help businesses like yours deal with the many state-by-state regulations and file your sales tax returns for you. We’ve got 20 plus years of knowledge and experience to help you get back to saving time and making money as soon as possible. Message, email or call us at 888-544-7730 for a free quote today!
When are sales tax returns due in Arkansas?
When you register for an Arkansas sales tax permit, your business will be assigned a filing frequency based upon your Arkansas sales. The more sales, the more often you will need to file. Most remote sellers will need to file monthly, but there are also quarterly and annual filing frequencies.
Regardless of the frequency, Arkansas returns are due the 20th of the month (unless the 20th falls on a weekend or holiday, in which case due dates are pushed to the next business day). For a detailed breakdown of current-year due dates, Arkansas keeps this page updated for taxpayer convenience.