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Electricity Used for Freezing Finished Food Products Doesn’t Qualify for Arkansas Reduced Sales Tax Rate


Manufacturing

Electricity used by a cold storage and blast freezing facility to blast freeze food products that have been manufactured by its customers does not qualify for the Arkansas reduced sales tax rate for electricity used directly by a manufacturer in the actual manufacturing process. The facility’s blast freezing services are used to preserve and prevent spoilage of finished food products. The manufacturing of the food products is completed by the time they are blast frozen by the facility. Since the facility is not involved in the actual manufacturing of the food products, the reduced sales tax rate does not apply to the electricity consumed by the blast freezers.If the same process was performed by the manufacturer, the process would be included in the manufacturing process and the reduced rate for the electricity would apply.(Revenue Legal Counsel Opinion No. 20151008, Arkansas Department of Finance and Administration, February 9, 2016)

(05/05/2016)
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