Ark. Code Ann. § 14-164-329 (2020)

1. The levy of a local sales and use tax shall not be effective until after the election has been held and the issuance of bonds has been approved by the voters and the Secretary of the Department of Finance and Administration has been given ninety (90) days' notice.
2. In order to provide time for the preparations for election set forth in this section and to provide for the accomplishment of the administrative duties of the secretary, the following effective dates are applicable with reference to any such ordinance levying such tax:
   1. 1. If an election challenge is not filed within thirty (30) days of the date of publication of the proclamation of the results of the election, the tax shall become effective on the first day of the first month of the calendar quarter after the expiration of the thirty-day period for challenge and after a minimum of sixty (60) days' notice has been provided by the secretary to sellers unless delayed under subdivision (b)(3) of this section.
      2. A rate change on a purchase from a printed catalog in which the purchaser computed the tax based on local tax rates published in the catalog will be applicable on the first day of a calendar quarter after a minimum of one hundred twenty (120) days' notice by the secretary to the sellers.
      3. For sales and use tax purposes only, a local boundary change will become effective on the first day of a calendar quarter after a minimum of sixty (60) days' notice by the secretary to sellers;
   2. In the event of an election contest, the tax shall be collected as prescribed in subdivision (b)(1) of this section unless enjoined by court order; and
   3. 1. The municipality or county may delay the effective date of the tax.
      2. The delayed effective date shall be specified in the ordinance levying the tax and on the ballot approving the bonds or the tax, except in the event that the tax is replacing an existing tax. In such event, the ballot and the ordinance shall specify that the tax will replace the existing tax and that the effective date of the tax will be the day following the date the existing tax expires.
      3. The delayed effective date shall in any event be the first day of the first month of the calendar quarter.
      4. The effective date shall not be delayed for more than twelve (12) months, unless the tax replaces an existing tax.
3. 1. 1. If bonds are issued, the tax shall be abolished when there are no bonds outstanding to which such tax collections are pledged as provided in this subchapter.
      2. If bonds have not been issued, the tax shall be abolished when it is determined by a roll call vote of two-thirds (2/3) of all the members elected to the municipality's or county's governing body that the bonds approved by the voters shall not be issued.
      3. Bonds shall not be deemed to be outstanding hereunder if the trustee for the bondholders provides the certificate provided for in subdivision (c)(2)(A) of this section.
   2. In order to provide for the accomplishment of the administrative duties of the secretary and to protect the owners of the bonds, the tax shall be abolished on the first day of the calendar quarter after the expiration of ninety (90) days from the date there is filed with the secretary a written statement signed by the chief executive officer of the municipality or county levying the tax and by the trustee for the bondholders, if a trustee is serving in such capacity, identifying the tax and the bonds, in which either:
      1. The trustee certifies that the trustee has or will have sufficient funds set aside to pay the principal of and interest on the bonds when due at maturity or at redemption before maturity and the municipality or county levying the tax certifies that the tax is not pledged to any other bonds of such municipality or county; or
      2. The municipality or county levying the tax certifies that there are no longer any bonds outstanding payable from tax collections.
   3. In the case of subdivision (c)(2)(B) of this section, there shall be attached to the written statement proof satisfactory to the secretary that there are no longer any bonds outstanding payable from tax collections.
   4. The chief executive officer of the municipality or county shall file the appropriate certificate not later than sixty (60) days after the bonds have been paid in full or funds to make payment in full have been set aside with the trustee.
4. After one (1) year has elapsed after the effective date of the abolishment of the tax, the Treasurer of State shall remit the balance in any suspense account maintained by the Treasurer of State in connection therewith directly to the municipality or county levying the tax.

History. Acts 1985, No. 871, § 9; A.S.A. 1947, § 13-1247; Acts 1989, No. 497, § 1; 1991, No. 645, § 2; 1993, No. 266, § 8; 1995, No. 101, § 1; 2003, No. 1273, §§ 78-81; 2013, No. 538, § 1; 2019, No. 910, §§ 3383-3386.

A.C.R.C. Notes. Acts 2003, No. 1273, § 1, provided:

“Fundamental purpose.

“(a) In order to allow Arkansas to enter into a Streamlined Sales and Use Tax Agreement, Arkansas must simplify and modernize its sales and use tax laws.

“(b) The Streamlined Sales and Use Tax Agreement focuses on improving sales and use tax administration systems for all sellers and for all types of commerce through all of the following:

“(1) State level administration of sales and use tax collections;

“(2) Uniformity in the state and local tax bases;

“(3) Uniformity of major tax base definitions;

“(4) Central, electronic registration system for all member states;

“(5) Simplification of state and local tax rates;

“(6) Uniform sourcing rules for all taxable transactions;

“(7) Simplified administration of exemptions;

“(8) Simplified tax returns;

“(9) Simplification of tax remittances; and

“(10) Protection of consumer privacy.

“(c) The Director of the Department of Finance and Administration may enter into the Streamlined Sales and Use Tax Agreement, as described in subsections (a) and (b) of this section, upon the agreement's going into effect as outlined by that agreement.

“(d)(1) The General Assembly has the authority to establish the parameters of state and local sales and use taxes, including the application, exemptions, limitations, and administration of those taxes.

“(2) The changes to existing law effectuated by this act are intended as an expression of the General Assembly's authority to modify the parameters of state and local sales and use taxes, and the changes are not intended as a revocation or restraint of the power of cities and counties to levy local sales and use taxes.

“(3) It is the intent of the General Assembly that any modifications to the application or administration of local sales and use taxes resulting from this act shall not require the approval of local voters, and that the modifications shall not invalidate existing local sales and use taxes.”

Publisher's Notes. Acts 1989, No. 497, § 3, provided that the amendments made by this act shall apply to bonds heretofore or hereafter issued under the authority of Ark. Const. Amend. 62 to the Constitution of the State of Arkansas and the sales and use taxes pledged to such bonds.

Amendments. The 2003 amendment inserted “and the Director … (90) days' notice” in (a); in (b)(1), substituted “month of the calendar quarter after” for “calendar month subsequent to” and inserted “and after a minimum … director to sellers”; substituted “the first month of the calendar quarter” for “a calendar month” in (b)(3)(C); in (c)(2), substituted “first month of the calendar quarter after” for “calendar month subsequent to,” “ninety (90)” for “thirty (30)” and “in which” for “wherein”; and made minor stylistic changes.

The 2013 amendment redesignated former (b)(1) as (b)(1)(A); substituted “under” for “as provided in” in (b)(1)(A); and added (b)(1)(B) and (b)(1)(C).

The 2019 amendment substituted “Secretary of the Department of Finance and Administration” for “Director of the Department of Finance and Administration” in (a); and substituted “secretary” for “director” throughout the section.

Effective Dates. Acts 2003, No. 1273, § 88 as amended by Acts 2005, No. 2008, § 1 and Acts 2007, No. 180, § 1: Jan. 1, 2008. Effective date clause provided: “It is found and determined by the Eighty-fourth General Assembly that the Streamlined Sales and Use Tax Agreement is necessary in order to stop the loss of sales tax revenue due to the rapid growth of internet sales, to level the playing field between local businesses and out-of-state businesses, and to negate the undue burden on interstate commerce; and that this act is necessary in order for Arkansas to be in compliance with the Streamlined Sales and Use Tax Agreement. Under the Streamlined Sales and Use Tax Agreement, when at least ten (10) states comprising at least twenty percent (20%) of the total population, as determined by the 2000 Federal census, of all states imposing a state sales tax have petitioned for membership and have been found to be in compliance with the requirements of the agreement, the agreement will become effective unless a specific effective date is otherwise given. These contingencies were met and the Streamlined Sales and Use Tax Agreement went into effect on October 1, 2005. Pursuant to the Streamlined Sales and Use Tax Agreement, a state may apply to become a party to the Streamlined Sales and Use Tax Agreement by submitting a petition for membership and certificate of compliance to the governing board. The governing board shall then determine if the petitioning state is in compliance with the Streamlined Sales and Use Tax Agreement. A state is in compliance with the Streamlined Sales and Use Tax Agreement if the effect of the state's laws, rules, regulations, and policies is substantially in compliance with the requirements in the Streamlined Sales and Use Tax Agreement. The petitioning state's proposed date of entry to the Streamlined Sales and Use Tax Agreement shall be on the first day of a calendar quarter. It is anticipated that Arkansas will become a full member of the Streamlined Sales and Use Tax Governing Board on January 1, 2008. In order to allow the Department of Finance and Administration and local businesses additional time to prepare for the changes necessary as the result of this act, all of the sections in this act will become effective on January 1, 2008. Thus, any section of this act with a specific effective date shall have an effective date of January 1, 2008, and not the specific effective date provided in the introductory language to the section, and when no effective date was listed in the section, then the effective date will also be January 1, 2008.”