Does Arkansas charge sales tax on services?
by May 22, 2024
The majority of U.S. states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Because the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.
Here’s what merchants need to know about taxing services in the state of Arkansas, which has a sales tax rate of 6.5%.
Are services taxable in Arkansas?
There are many services that are considered taxable in Arkansas:
- Natural or artificial gas, electricity, water, ice, steam, etc. sold as a utility or provided as a public service
- Service of furnishing accommodations to transient guests (temporary guests who stay 30 days or less)
- The service of initial installation, alteration, addition, cleaning, refinishing, replacement and repair of the following items of tangible personal property are subject to the tax: motor vehicles, aircraft, farm machinery and farm implements, motors of all kinds, tires, batteries, boats, electrical appliances, and electrical devices, furniture, rugs including carpets, flooring, upholstery, household appliances, television and radio, jewelry, watches, clocks, engineering instruments, medical instruments and surgical instruments, machinery of all kinds, bicycles, office machines, office equipment, shoes, tin and sheet metal, mechanical tools and shop equipment
- Service of cable television, community antenna television, and any and all other distribution of television, video, or radio services
- Providing transportation or delivery of money, property, or valuables by armored car
- Providing cleaning or janitorial work
- Pool cleaning and servicing
- Pager services
- Telephone answering services
- Lawn care and landscaping services
- Parking or storing a motor vehicle
- Storing furs
- Providing indoor tanning at a tanning salon.
- Printing of all kinds, types, and characters, including the service of overprinting, and photography of all kinds
- Tickets or admissions to places of amusement or to athletic, entertainment, or recreational events, or fees for access to or the use of amusement, entertainment, athletic, or recreational facilities
- Dues and membership fees to: Health spas, health clubs, and fitness clubs
- Contracts, including service contracts, maintenance agreements and extended warranties, which in whole or in part provide for the future performance of or payment for services which are subject to gross receipts tax
Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be taxed. For an in-depth look at Arkansas sales tax, TaxJar’s guide to Arkansas sales tax and the Arkansas Department of Finance and Administration has more details.
How to stay compliant with sales tax when you sell services
Managing all the moving parts of sales tax can be challenging. Are accounting services taxed? What about hair care or car maintenance? They may not be taxed in your state today, but sales tax laws change all the time. TaxJar makes it easier for you to stay current with it all, especially as you scale your business across states.
If you need to charge sales tax on services, TaxJar takes all of these state laws into account and makes your job simple. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.
