Arkansas Administrative Code

26 CAR § 130-131. Deductions — Depreciation and expensing of property — Arkansas Code § 26-51-428. (a) Depreciation — Arkansas Code § 26-51-428(a). (1)(A) For property placed in service during tax years beginning before January 1, 1995, Sections 167, 168, and 179 of the Internal …

26 CAR § 130-132. Federal Subchapter M — Federal Subchapter M adopted — Arkansas Code § 26-51-440. (a)(1) Subchapter M of the Internal Revenue Code as in effect on January 1, 1997, has been adopted with the exception of its tax rates. (2) Arkansas tax rates remain in effect as se…

26 CAR § 130-133. FASITs — Arkansas Code § 26-51-440. (a) Definition — Arkansas Code § 26-51-440. (1) A new type of statutory entity called a financial asset securitization investment trust (FASIT) has been created to facilitate the securitization of debt obligations such as: (A)…

26 CAR § 130-134. Youth apprenticeship program — Youth apprenticeship credits — Arkansas Code § 26-51-509. (a)(1) Youth apprenticeship programs under Arkansas Code § 26-51-1601 et seq. [repealed], are certified by the Division of Career and Technical Education. (2) Program-relate…

26 CAR § 130-135. Multistate business income — Arkansas Code § 26-51-701. (a) Source of law — Arkansas Code § 26-51-701. Arkansas has adopted the: (1) Uniform Division of Income for Tax Purposes Act, Arkansas Code § 26-51-701 et seq.; and (2) Multistate Tax Compact, Arkansas Code…

26 CAR § 130-136. Apportionment — Determination of nexus — Arkansas Code § 26-51-702. (a) Apportionment of net income authorized — Arkansas Code § 26-51-702. (1) If a taxpayer's business activities occur both within and outside of Arkansas, the taxpayer shall apportion its busine…

26 CAR § 130-137. Nonbusiness income — Allocation of nonbusiness income — Arkansas Code § 26-51-704. (a) Generally, a taxpayer's nonbusiness income will be allocated to the state in which the taxpayer has its commercial domicile (that is, home office or corporate headquarters). (…

26 CAR § 130-138. Apportionment — Business income — Determining apportionment factor — Arkansas Code § 26-51-709. (a) All business income of the taxpayer shall be apportioned to Arkansas by use of an apportionment formula. (b) The apportionment formula consists of a fraction, of …

26 CAR § 130-139. Property factor — Arkansas Code § 26-51-710 [repealed]. (a) Includable property — Arkansas Code § 26-51-710 [repealed]. (1) Property shall be included in the property factor if it is actually used or is available for use or capable of being used during the tax y…

26 CAR § 130-140. Property factor — Valuation of property — Arkansas Code § 26-51-711 [repealed]. (a) Owned property — Arkansas Code § 26-51-711 [repealed]. (1)(A) Property owned by the taxpayer shall be valued at its original cost. (B) As a general rule, original cost is deemed …

26 CAR § 130-141. Payroll factor — Arkansas Code § 26-51-713 [repealed]. (a) Payroll factor generally — Arkansas Code § 26-51-713 [repealed]. (1)(A) The payroll factor of the apportionment formula for each trade or business of the taxpayer shall include the total amount paid by t…

26 CAR § 130-142. Sales factor — Arkansas Code § 26-51-715 [repealed]. (a) Sales factor generally — Arkansas Code § 26-51-715 [repealed]. (1) The term "sales" means all gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or bus…

26 CAR § 130-143. Sales factor — Other than tangible personal property — Arkansas Code § 26-51-717. (a) Gross receipts from transactions other than sales of tangible personal property are attributed to Arkansas if the income-producing activity is performed: (1) Entirely within Ar…

26 CAR § 130-144. Modification of apportionment and allocation — Arkansas Code § 26-51-718. (a) Construction contractors — Arkansas Code § 26-51-718(c). (1) The following special rules are established with respect to the apportionment of income of construction contractors. (2)(A)…

26 CAR § 130-145. Partnership returns — Arkansas Code § 26-51-802. (a) Corporations with partnership interest — Arkansas Code § 26-51-802(b). (b) Any taxpayer with an interest in a partnership that has gross income from sources within Arkansas must directly allocate the partnersh…

26 CAR § 130-146. Corporation returns — Arkansas Code § 26-51-804. (a) Federal employer identification number (FEIN) — Arkansas Code § 26-51-804(a). (1) Every corporation income tax return, information return, amended return, report, declaration of estimated tax return, or claim …

26 CAR § 130-147. Consolidated corporate returns — Arkansas Code § 26-51-805. (a) Generally — Arkansas Code § 26-51-805. (1) If two (2) or more members of a federal consolidated group file an Arkansas consolidated return, all members that have income from sources within Arkansas …

26 CAR § 130-148. Filing returns — Arkansas Code § 26-51-806. (a) Time and place — Arkansas Code § 26-51-806(a). (1) Income tax returns must be filed on or before the fifteenth day of May following the close of the calendar year. (2) If the taxpayer files a return on the basis of…

26 CAR § 130-149. Filing returns — Arkansas Code § 26-51-807. (a) Federal extension of time — Arkansas Code § 26-51-807. (1)(A) It is important that a complete income tax return be filed on or before the return's due date. (B) An incomplete income tax return will not be accepted.…

26 CAR § 130-150. Minimum estimated tax — Generally — Arkansas Code § 26-51-912. (a) When a taxpayer files a declaration of estimated tax, it must be either one hundred percent (100%) of the prior year's tax liability or ninety percent (90%) of the tax liability for the current t…

26 CAR § 130-151. Payment of estimated tax — Arkansas Code § 26-51-913. (a) Claimed on income tax return — Arkansas Code § 26-51-913(a). (b) Once a payment or refund has been declared as an estimated payment for the next succeeding tax year, it is considered to be a payment for t…

26 CAR § 130-152. Water conservation incentives — Arkansas Code § 26-51-1001 et seq. (a) Credit for water resource projects, water impoundments, and water control structures — Arkansas Code § 26-51-1006 [repealed]. (1)(A) The income tax credit for water resource projects, water i…

26 CAR § 130-153. Donations and sales to educational institutions — Limit on total credit for qualified research expenditures, donations, and sales — Arkansas Code § 26-51-1103. (a)(1) A taxpayer may receive an income tax credit for qualified research expenditures, donations, and…

26 CAR § 130-154. Steel mill tax incentives — Arkansas Code § 26-51-1213. (a) Credits and NOL – Arkansas Code § 26-51-1213(a). (b) Taxpayers may be eligible to claim both enterprise zone credits and an NOL deduction for the same tax year. (c) If the NOL or credit cannot be fully …

26 CAR § 130-155. Low-income housing — Housing tax credit — Arkansas Code § 26-51-1701 et seq. (a)(1) This tax credit applies to taxpayers that own an interest in a low-income housing project that has been qualified by the Arkansas Development Finance Authority. (2) An eligibilit…

26 CAR § 131-101. Determination. (a) In accordance with the terms of Arkansas Code § 26-5-101(IV)(18) and Arkansas Code § 26-51-718, the Secretary of the Department of Finance and Administration determines that the allocation and apportionment provisions of the Multistate Tax Com…

26 CAR § 131-102. Definitions. The following words and terms when used in this part shall have the following meanings: (1)(A) “Group” means two (2) or more corporations which are owned or controlled, either directly or indirectly, by the same interests. (B)(i) Corporations which …

26 CAR § 131-103. Application. (a) This part shall apply only to taxpayers subject to the tax imposed by the Income Tax Act of 1929, Arkansas Code § 26-51-101 et seq., that have the following characteristics: (1) The taxpayer is a passive intangible holding company; (2) The taxpa…

26 CAR § 131-104. Business income. (a) Where a taxpayer meeting the requirements of 26 CAR § 131-103 has income from sources both within and without this state, the amount of business income from sources within this state shall be determined pursuant to Arkansas Code § 26-5-101(I…

26 CAR § 131-105. Sales factor — Intragroup intangible licensing transactions. (a) The Secretary of the Department of Finance and Administration hereby determines that the sales factor outlined in Arkansas Code § 26-51-217 and § 26-5-101(IV)(17) does not fairly represent the exte…

26 CAR § 131-106. Examples. The following examples are provided as guidance for purposes of determining whether an intangible income measuring activity is deemed to be readily identifiable to a specific activity occurring within a unique geographic location.Example 1: A licensing…

26 CAR § 131-107. Penalty. No penalty shall be assessed against any taxpayer for failure to make estimated tax payments for the first year a tax return is due as a result of this part.

26 CAR § 132-101. Purpose. (a) This part has been promulgated to implement and facilitate Rev. Proc. 01-76, 2001-52 I.R.B. 613, issued by the Internal Revenue Service on December 26, 2001. (b) Under Arkansas Code § 26-51-401, Arkansas income tax returns must be prepared using the…

26 CAR § 132-102. Definitions. As used in this part: (1)(A) "Eligible trade or business" shall mean a trade or business in which the principal business activity is described in a North American Industry Classification System (NAICS) code other than an ineligible NAICS code. (B) I…

26 CAR § 132-103. Cash basis accounting for small businesses. (a) Qualifying small business taxpayers engaged in an eligible trade or business may use the cash receipts and disbursements method of accounting ("cash method") rather than the accrual method of accounting for tax yea…

26 CAR § 132-104. Method of accounting. The taxpayer's election of the cash method or accrual method of accounting for the Arkansas income tax return pursuant to this part must be the same method of accounting and for the same tax year as that used for the taxpayer's federal inco…

26 CAR § 132-105. Questions. Questions or requests for additional information on the use of accounting methods by Arkansas taxpayers should be directed to: Department of Finance and Administration Revenue Division Corporation Income Tax Section P.O. Box 919 Little Rock, AR 72203-…

26 CAR § 133-101. Citation. This part shall be cited as the “Arkansas Elective Pass-Through Entity Tax Rule”.

26 CAR § 133-102. Definitions. As used in this part: (1) “Affected business entity” means a business entity in which members that hold more than fifty percent (50%) of the voting rights in the business entity elect on an annual basis before the due date or extended due date of th…

26 CAR § 133-103. Election. (a)(1) The members of a business entity must elect annually whether the entity wishes to be subject to the pass-through entity tax. (2) All members of an affected business entity are bound by the entity’s election for that taxable year. (b)(1) The annu…

26 CAR § 133-104. Pass-through entity tax return and payment. (a)(1) An affected business entity shall file a pass-through entity tax return with the Department of Finance and Administration. (2) An affected business entity shall annually file the required return with the Secreta…

26 CAR § 133-105. Calculation of pass-through entity tax. (a) The affected business entity shall calculate its tax rate as follows: (1) The affected business entity shall pay a tax equal to the top marginal income tax rate for the taxable year under Arkansas Code § 26-51-201(a) o…

26 CAR § 133-106. Members. (a)(1) An affected business entity must annually report to the Secretary of the Department of Finance and Administration the pro rata interest of each member of the affected business entity. (2) The annual report is to be filed on forms furnished by the…

26 CAR § 133-107. Income tax withholding on nonresident members. (a) The withholding tax requirements of Arkansas Code § 26-51-919 are not applicable to the share of income of a business entity for a taxable year that is distributed to a nonresident member if the: (1) Members of …

26 CAR § 133-108. Annual prepayments. (a) Each affected business entity filing a pass-through entity tax return shall be required to make a required annual payment of the tax due for the taxable year. (b) The required annual payment shall be made in four (4) estimated installment…

26 CAR § 133-109. Application of Arkansas Tax Procedure Act. The Arkansas Tax Procedure Act, Arkansas Code § 26-18-101 et seq., is applicable to the administration and enforcement of the pass-through entity tax.

26 CAR § 160-101. Beer excise tax requirements. (a)(1) The taxpayer, licensed under Acts 1935, No. 109, as amended, shall file with the Miscellaneous Tax Section of the Office of Excise Tax Administration a monthly Arkansas Beer Excise Tax Report not later than the fifteenth day …