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On March 19, 2007, Arkansas Governor, Mike Beebe, signed H.B. 1622, which amends and provides that a person performing taxable labor to for another person who holds a retailer’s permit is not required to collect and remit Arkansas sales tax on labor where the labor is to be charged to, and the sales tax collected from, the ultimate consumer. (Act 361, H.B. 1622, Laws 2007)


On March 28, 2007, Arkansas Governor, Mike Beebe, signed H.B.2226 - repealing conflicting language in Arkansas law pertaining to sales tax on leases or rentals of motor vehicles. The repealed provision stated that any person engaged in the business of leasing or renting motor vehicles shall collect, report, and remit tax on the lease or rental payments in lieu of paying tax at the time of registration. The amended provision does not specifically identify the conflicting area, however; the repealed provision appeared to conflict with other provisions that acknowledge that motor vehicles lessors could pay sales or use tax on leased motor vehicles at the time of purchase of the property. (Act 550, H.B. 2226, Laws 2007)


Arkansas Governor Riley signed the state's SST conformity legislation, which will become effective January 1, 2008. Additionally, in response to the Agreement’s ban on states imposing tax caps, Arkansas will enact a rebate or credit for local taxes paid in excess of the tax due on the first $2,500. Arkansas is expected to petition for full membership at the September Governing Board meeting. (S.B. 279, 280, 281, and 282, February 26, 2007)


In December 2006, the Governing Board voted to repeal the controversial multiple points of use (MPU) provisions previously included with the SST Agreement and, instead, adopt sourcing rules for software transactions. Prior to the repeal, a business purchaser was required to deliver to the seller an exemption form claiming MPU if it was purchasing a digital good, computer software, or a service that would be available for use in more than one jurisdiction. However, several concerns were expressed by this rule. The burden of collection shifted from software sellers to business purchasers of software. There were also concerns that allowing MPU would create unnecessary complications, as long as there are nonmember states. The Board approved the repeal of the MPU provisions, along with adopting a new rule offered by the business community. This rule describes the application of the general sourcing provision in the Agreement to the transactions involving prewritten computer software, computer-related services, and “software post-sale support agreements.” This change gives member states two years to come into compliance with any amendments made to the Agreement. (Streamlined Sales Tax Governing Board and State and Local Advisory Council Meetings, Seattle, Washington, December 11-14, 2006)


In order to bring the state into SSTP conformity by January 1, 2008, Arkansas Governor Mike Beebe signed four bills into law: a credit or rebate of overpayment of local taxes on the first $2,500 of a qualifying single transaction; an extension on the effective date of previously enacted legislation from July 1, 2007 to January 1, 2008; the enactment of the remaining SST provisions, among them including provisions regarding nexus, amnesty, and exemption certificates; and the movement of certain special excise tax provisions (rental, tourism, and other special excise taxes) into a new chapter so that these taxes do not fall under the Agreement. (S.B. 279, S.B. 280, S.B. 281, S.B. 282)



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