Ark. Code Ann. § 26-53-106 (2026)

Research References

U. Ark. Little Rock L. Rev.

Annual Survey of Caselaw, Tax Law, 25 U. Ark. Little Rock L. Rev. 1036.

Case Notes

Constitutionality.

Use tax is not a tax on property; hence it does not violate Ark. Const., Art. 16, § 5, requiring all property taxes to be equal and uniform. Morley v. E.E. Barber Constr. Co., 220 Ark. 485, 248 S.W.2d 689 (1952).

This section recognizes constitutional limitation of a state's imposition of a tax on goods in interstate transit; if goods have not “come to rest” within state, they are still in stream of interstate commerce, and tax may not be levied. Martin v. Riverside Furniture Corp., 292 Ark. 399, 730 S.W.2d 483 (1987).

Materials did “finally come to rest” in Arkansas within the meaning of this section and were not exempted from use tax. Martin v. Riverside Furniture Corp., 292 Ark. 399, 730 S.W.2d 483 (1987).

Where the Revenue Division imposed both the sales and use taxes upon the price of the concrete components regardless of whether they were precast within or without the state, there was equal treatment for similarly situated in-state and out-of-state taxpayers in the imposition of the taxes, and as a result, there was no violation of the commerce clause. Pledger v. Featherlite Precast Corp., 308 Ark. 124, 823 S.W.2d 852, cert. denied, 506 U.S. 826, 113 S. Ct. 82, 121 L. Ed. 2d 46 (1992).

Applicability.

This section operates retrospectively to include within its operation only those delinquent taxpayers who have failed and refused to pay the tax, those who have paid the tax are excluded from the operation of the law simply because they paid the tax; thus, the exclusion of those persons who were attempting to comply with the law at the time the tax matured, in effect, penalizes them because of their compliance. Federal Express Corp. v. Skelton, 265 Ark. 187, 578 S.W.2d 1 (1979).

Under subsection (b) of this section, there was no intention for consumption of a product to be the equivalent of its coming to rest; rather, the statute contemplated that property had to first come to rest before it was consumed in order for it to be taxable. Mississippi River Transmission Corp. v. Weiss, 347 Ark. 543, 65 S.W.3d 867 (2002).

Catalogue Sales.

Where no agency relationship existed between out-of-state mail order school book company and Arkansas teachers, the company's sales of books in Arkansas were not subject to a vendor's use tax. Pledger v. Troll Book Clubs, 316 Ark. 195, 871 S.W.2d 389 (1994).

Not Subject to Tax.

Importation by corporation of paneling manufactured in a plant owned by the corporation outside the state and the use thereof in remodeling the offices of the corporation located in Arkansas was not subject to use tax. Georgia Pac. Corp. v. Larey, 242 Ark. 428, 413 S.W.2d 868 (1967).

This subchapter did not apply to a manufacturer who purchased compressor fuel where the transfer of ownership as well as the right to use the compressor fuel occurred in Oklahoma. Boral Gypsum, Inc. v. Leathers, 325 Ark. 272, 924 S.W.2d 805 (1996).

This subchapter does not support taxing sheetrock manufacturer for purchase of out-of-state diverted natural gas, known as “compressor fuel,” transported by pipeline to manufacturer. Boral Gypsum, Inc. v. Leathers, 325 Ark. 272, 924 S.W.2d 805 (1996).

Sales Price.

Where person contracted to install reinforcing steel bars at missile sites within the state and manufactured the bars in an out-of-state plant, the use tax provided under this section should have been on the finished bars and not the raw materials, as the term “sales price” used in this section is used to provide a method of determining the basis on which the three percent would apply and does not mean there must be an ordinary sale before the tax is payable. Republic Steel Corp. v. McCastlain, 240 Ark. 979, 403 S.W.2d 90 (1966).

The Revenue Division properly calculated the sales and use tax due on the sale of precast concrete components based upon the sale price charged the general contractor. The precast concrete components were large, specially designed and constructed pieces of concrete, and were tangible personal property. They were not real property at the time they were transported to the jobsite. Pledger v. Featherlite Precast Corp., 308 Ark. 124, 823 S.W.2d 852, cert. denied, 506 U.S. 826, 113 S. Ct. 82, 121 L. Ed. 2d 46 (1992).

Subject to Tax.

Rentals and leases are unquestionably covered under this section, and rented tapes and films that finally come to rest for the purpose for which they are sent are subject to tax. American Television Co. v. Hervey, 253 Ark. 1010, 490 S.W.2d 796 (1973).

Painted bulletins, posters, facings, hardware, and paint, purchased out of state and used in connection with the taxpayer's billboard advertising service, were not exempt from the use tax. Technical Servs. of Ark., Inc. v. Pledger, 320 Ark. 333, 896 S.W.2d 433 (1995).

Natural gas “came to rest” in Arkansas within the context of subsection (b) of this section, the use tax statute, and was therefore subject to the tax at the point that it left interstate pipelines, was metered, and entered a taxpayer's plant's internal gas lines, although the gas was used immediately and never stored. Alcoa World Alumina, L.L.C. v. Weiss, 2010 Ark. 94, 377 S.W.3d 164 (2010).

Cited: Ragland v. General Tire & Rubber Co., 297 Ark. 394, 763 S.W.2d 70 (1989); Pledger v. EASCO Hand Tools, Inc., 304 Ark. 47, 800 S.W.2d 690 (1990); Pledger v. Brunner & Lay, Inc., 308 Ark. 512, 825 S.W.2d 599; Pledger v. Baldor Int'l, Inc., 309 Ark. 30, 827 S.W.2d 646 (1992).