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State ready to implement utilities tax cut for manufacturers Tuesday, Jun 12, 2007 By Jason Wiest Arkansas News Bureau LITTLE ROCK - The state has adopted rules for the reduction in the state sales and use tax for manufacturers, the state Department of Finance and Administration said Monday. The rules implement Act 185 of 2007, which will cut the 6 percent tax on natural gas and electricity used directly in the manufacturing process to 4.5 percent beginning July 1. The department expects a smooth transition to the lower rate, Tom Atchley, DF&A's excise tax administration, said Monday. "Most of the manufacturers in Arkansas we work with on taxes now," Atchley said. "They're some of our largest taxpayers and they have good understanding of our tax laws." Eligible manufacturers must register with DF&A to purchase natural gas or electricity at the reduce rate and provide information regarding each manufacturing use of natural gas or electricity at each meter. Manufacturers will receive a certificate from DF&A that lists each meter for which the reduced rate is available and the percentage of that meter's billing that is taxed at the reduced rate, the department said. Each manufacturer's supplier will then use the certification to decipher what portion of usage is subject to the reduce rate, Atchley said. Officials can verify that the information manufacturers provide their suppliers is correct during audits, he said. If a manufacturer is not certified to receive the reduced rate beginning July 1, the supplier will continue to collect the full rate, but manufacturers will be eligible for a refund, Atchley said. The tax will be lowered again July 1, 2008, to 4 percent. ------- On the Net: www.arkansas.gov/dfa/ For more information call DF&A's Sales and Use Tax Section at 501-682-7104 or through mail at P.O. Box 8054, Little Rock, AR 72203. |
