Arkansas Enacts Click-Through Nexus and Affiliate Nexus Bill

Arkansas has enacted an affiliate nexus and “click-through nexus” law. Under the new legislation, a seller is now considered to be engaged in selling property or taxable services in Arkansas if an affiliated person is subject to Arkansas sales and use tax and one of the following conditions exists: the seller sells a similar line of products as the affiliated person under the same or a similar business name, the affiliated person uses its in-state employees or facilities to advertise or promote sales by the seller to consumers, the affiliated person maintains a facility that facilitates the delivery of the seller’s products or services to their business, the affiliated person uses trademarks, service marks, or trade names in Arkansas that are the same or substantially similar to those of the seller, or the affiliated person delivers, installs, assembles, or performs maintenance for the seller’s customers in Arkansas. “Affiliated person” is defined as a person that is a member of the same controlled group of corporations as the seller or another entity that bears the same ownership relationship to the seller as a corporation that is a member of the same controlled group.

If there is no affiliated person, a seller is considered to be selling property or taxable services in Arkansas if they enter into an agreement with an Arkansas resident in which the resident directly or indirectly refers potential purchasers to the seller – through an internet link or otherwise – for commissions or other consideration. This only applies if cumulative sales to Arkansas purchasers who are referred to the seller exceed $10,000 in the preceding 12 months. The “click-through nexus” provision will take effect 90 days after the 2011 Legislature adjourns and will apply without regard to when the seller and resident entered into an agreement. Both the affiliate nexus and “click-through nexus” provisions may be rebutted with certain proof. (Act 1001 (S.B. 738), Laws 2011, effective October 27, 2011,, and as noted)

UPDATE: Arkansas enacted legislation S.B. 576 that repeals the previous provisions requiring sellers to collect tax based on affiliated relationships and payments of referral fees which are often referred to as “click-through” nexus. The repeal is effective June 30, 2019. The state will enforce economic nexus rules for remote sellers and marketplace facilitators going forward, read our news item for more details: Arkansas Enacts Economic and Marketplace Nexus Legislation.

Posted on June 24, 2011