Arkansas has amended its use tax refund for partial replacement and repair of certain machinery and equipment. Currently, the amount of tax that is subject to refund is the tax in excess of 4.875%. Moving forward, the amount of tax that is subject to refund is the tax in excess of the following rates:
Beginning July 1, 2022, purchases qualifying for the tax refund will be 100% exempt.
Taxpayers can claim the refund either through issuance of a direct pay or limited direct pay certificate to suppliers or through a self-refunding process. This process allows the taxpayer to claim the refund on the monthly sales and use tax return or by filing a refund claim within one year. No interest will be paid on these refunds.
Beginning July 1, 2018, no separate refund claims can be filed. The refund can only be claimed by offsetting the refund against other sales and use tax owed and filed on the monthly return. If the amount of the credit exceeds the amount due, a refund will be paid. No interest will be paid on these refunds. Returns must be filed electronically to take the credit. (Act 465 (S.B. 362), Laws 2017, effective March 13, 2017)