Multistate Tax Commission/Association of Fund-Raising Distributors & Suppliers    Arkansas

Agency:  Department of Finance and Administration

Contact Person/Department:  Roberta Overman

Tel. No.:  (501) 682-1895

Fax No.:  (501) 682-7904

E-mail:  Roberta.Overman@rev.state.ar.us

  1. If your State exempts fundraising sales by certain groups from sales or use taxes, please indicate which of the following are exempt in your State.

    Public Schools (K-12)

    Arkansas law has no general sales tax exemption for fund-raising.  Arkansas Gross Receipts Tax Regulation GR-39(C), which the Department interprets as being generally applicable to school groups, provides that a PTA/PTO which purchases goods and merchandise from a supplier for resale must pay tax on its purchases.  The subsequent resale of the goods is not subject to tax.  If the vendor provides the PTA with order forms which are distributed to the students and the students solicit orders, the vendor must remit the sales tax on the total sales price for the item.  The vendor may allow the student to collect the tax from the customer on the vendor's behalf.  However, if the student does not collect the tax for the vendor, the vendor must still remit the total tax due to the state.  The taxable amount is the sales price of the item.

    Private Schools (K-12)

    See response to public schools (K-12).

    School Groups (e.g., clubs, bands, teams)

    See response to public schools (K-12).

    PTAs

    See response to public schools (K-12).

    PTOs

    See response to public schools (K-12).

    Other parent groups (please identify) ____________________

    See response to public schools (K-12).

    Church Groups

    Arkansas Gross Receipts Tax Regulation GR-39(C) provides that the "gross receipts or gross proceeds derived from the sale of tangible personal property or services by churches or charitable organizations are exempt from tax."  The exemption for organizations shall not extend to sales of new tangible property by the organization if the sale competes with the sale by for-profit businesses.  See Ark. Code Ann. § 26-52-430.  Such a sales does not compete with a sale by a for-profit business if:

    1. The sales transaction is conducted by members of the charitable organization and not by any franchisee or licensee;
    2. All the proceeds derived from the transaction go to the charitable organization;
    3. The transaction is not a continuing one and is held not more than three (3) times per year; and
    4. The dominant motive of the majority of purchasers of the items sold is making a charitable contribution, and purchase of the item is incidental to the actual purpose.


    Youth Sports League
    See response to "501(c)(3) Organizations."

    501 (c)(3) organizations

    If a 501(c)(3) organization is also a charitable organization then it is eligible for the same exemption as church groups.  See Response to "Church Groups."  Arkansas Gross Receipts Tax Regulation GR-37(E)(6) defines "charitable organization" as "an organization whose purpose is benevolent, philanthropic, patriotic, or eleemosynary and whose function if performed, and not performed by a private party, would have to be performed at public expense."  If an organization is unsure whether it qualifies as a charitable organization it should request a written letter opinion from this office.

    501 (c)(6) organizations

    See response to "501(c)(3) Organizations."

    Other

    See response to "501(c)(3) Organizations."

    1.a. Are local sales and use taxes in your State applied to these groups in the same manner as State sales and use taxes are applied to these groups?

    Yes

    1.b. Please set forth any comments including a list of groups not listed above whose fundraising activities are exempt from sales and use taxation in your State.

    Arkansas Gross Receipts Tax Regulations including GR-39 are available on-line at http://www.state.ar.us/dfa/excise_tax_v2/su_pdf/ark-salestax-regs.pdf

  2. If your State exempts fundraising sales of certain products from sales and use tax, please indicate which of the following products are exempt.

The taxability of fundraising sales is the same for all products and taxable services.

    2.a. Are local sales and use taxes in your State applied to these products in the same manner as State sales and use taxes are applied to these products?

    2.b. Please set forth any comments including a list of products not listed above that are exempt from sales and use taxation for fundraising purposes in your State.

  1. If some or all fundraising groups or products qualify for exemption from sales and use tax in your State, please indicate any exceptions to or limitations on such exemptions. (Check all that apply and specify the limitation.)

See the response to Question 1, "Church Groups."

  1. If some or all fundraising groups qualify for exemption from sales and use tax in your State, please set forth the procedure through which a group may establish its qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.

    Arkansas does not issue exemption certificates.  The organization will be responsible for obtaining a sales tax permit and collecting and remitting the appropriate tax unless it can show that it meets the criteria set out in GR-39.  If an organization has any doubt as to its status, it should request a letter opinion from this office.  See GR-75.  A vendor selling to a fund raising group should review Gross Receipts Regulation GR-74 concerning exemption claims.  Essentially, it is the vendor's responsibility to require and retain proof of the exempt nature of any transaction for which it does not collect tax.

     

  2. If some or all fundraising products qualify for exemption from sales and use tax in your State, please set forth the procedure for establishing a product's qualification for the exemption. Attach relevant statutes, regulations, procedures, etc.


    Not applicable.
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  4. In instances where a fundraising product or group is not exempt from sales or use tax, please indicate who bears the responsibility for collecting and remitting the tax.

    For school groups, see response to Question 1. Other non-exempt organizations must obtain a sales tax permit and collect tax on their sales.

  5. In instances where a fundraising product or group is not exempt from sales or use tax, what is the basis for calculating the sales/use tax?

There are special rules for school groups. See response to Question 1. All other non-exempt groups must collect tax on the amount of the sale to the consumer.

  1. Provide any additional information regarding the sales and use tax treatment of fundraising transactions and/or groups in your State. Also set forth any statements, disclosures, disclaimers, etc. to be provided as part of the clearinghouse regarding your state's practices and procedures. Attach additional sheets if necessary.

    You are requesting information for general information purposes. Therefore, please be aware of Arkansas Regulation GR-75, which provides that a letter opinion may only be relied on by a seller if it is addressed to him or is tendered by a customer to whom it is addressed. Requests for letter opinions must specifically describe the person claiming an exemption and set forth all material facts relevant to the questioned sale or transaction. In order to receive a binding opinion, the seller or the customer must submit a request specifically describing the person claiming an exemption, and specifically detailing that person’s factual circumstances. A letter opinion may not be relied on if more than three (3) years old, but may be renewed on request.

    This opinion is based on current Arkansas laws, rules, and regulations. Any change in the facts or law could result in a different opinion.

     

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