I'm going to have to start making fun of entire states in this series of Nutty Rules.
Rarely do I see such a patchwork of laws, nesting exceptions, and missing or downright conflicting rules. For example, installation services are shown as being not taxable. But there is this thing called "initial installation." It's taxable. Would someone please explain to me how often someone has a "second installation?"
And their manufacturing equipment rules are head-scratchers. There's an exception for equipment for new facilities and expanded capacity. And there's an exception for substantial replacement of machinery. What's left? It seems like the politicians really don't know what they're trying to accomplish. They also call things manufacturing, like drying agricultural products, that don't really seem like manufacturing. Maybe it's just me.
Let's talk containers. According to the regulations, only manufacturers, processors and restaurants can take advantage of this exemption. I can't believe that the corporate home of Wal-Mart wouldn't let retailers skate on the cost of bags. Come on, Arkansas. All the other states have a general container exemption, why not you?
Many states have a residential utilities exemption. Arkansas has it, but the threshold means you'd have to be so poor, I'm not sure how you'd afford electricity in the first place.
Many states do not have a broad non-profit organization exemption. And as with those other states, Arkansas does let a few organizations off the hook. You wonder what friends those organizations had that they were able to get an exemption. And what about all of the other deserving charitable organizations?
I have the feeling that Arkansas politicians have taken the concept of "adding more laws, but not cleaning out the ones you already have" to a new level. Have you seen the exceptions under their Consolidated Incentive Act? And I count 15 different additional taxes that the locals can impose.
Hey, I'm really not complaining. All that complexity makes for loads of entertainment when I prepare for one of my Taxing Policy webinars. And complexity keeps me employed. So I'm all for it.
The Sales Tax Guy
See the disclaimer - this is for education only. Research these issues thoroughly before making decisions. Remember: there are details we haven't discussed, and every state is different.
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