Arkansas has implemented an emergency rule which reduces the sales and use tax rate on natural gas and electricity. Effective July 1, 2007, the tax rate for utilities used directly in the actual manufacturing process is reduced from 6% to 4.5%. Furthermore, the rate will drop to 4.0%, effective July 1, 2008. Manufacturing is generally defined as the physical or chemical transformation of materials or substances into new products. Natural gas and electricity used for any other purpose will be taxed at 6%. (Emergency Rule 2007-5, Arkansas Department of Finance and Administration, Effective June 8, 2007)