Ark. Code Ann. § 26-75-602 (2026)
Gross receipts taxes authorized
History. Acts 1965, No. 185, § 1; 1969, No. 123, § 1; 1971, No. 534, § 1; 1977, No. 178, § 1; 1979, No. 926, § 1; 1981, No. 20, § 1; 1981, No. 957, § 1; A.S.A. 1947, §§ 19-4613, 19-4613.1; Acts 1989, No. 626, § 2; 1991, No. 726, § 1; 1993, No. 364, § 1; 1995, No. 300, §§ 1, 2; 1995, No. 931, § 1; 2007, No. 473, § 2; 2009, No. 274, § 1; 2019, No. 560, § 1.
Publisher's Notes. Acts 1985, No. 976, confirmed and continued the authority of municipalities to levy the hotel and restaurant tax and to pledge the proceeds of that tax to tourism bonds by ordinance subject to referendum but without a prior vote of the people. It declared the proceeds of any hotel and restaurant tax pledged to tourism bonds issued under Acts 1971, No. 380, or bonds issued under the Local Government Capital Improvement Revenue Bond Act of 1985, for tourism projects, to be project revenues of the project financed. It further provided that the hotel and restaurant tax is not a “tax” as taxes are normally understood and intended for government support but is a special levy paid and collected by those persons and entities peculiarly associated with and benefited by tourism. However, since the Local Government Revenue Bond Act of 1985, § 14-164-301 et seq., makes specific reference to hotel and restaurant taxes and the Local Government Capital Improvement Revenue Bond Act of 1985, § 14-164-401 et seq., does not, it is uncertain which act was intended to be referred to by Acts 1985, No. 976.
Acts 1989, No. 626, § 1, provided:
“It is hereby found and determined by the General Assembly that:
“(A) Tourism is the second largest industry in the United States with revenues totaling over two hundred billion dollars;
“(B) The various states spend in excess of two hundred million dollars per year to promote and develop tourism and that this amount increases substantially each year;
“(C) As part of the major economic development program being undertaken in Arkansas, it is imperative that the state and its counties and municipalities have every opportunity to participate in the available tourism dollars;
“(D) The hotel and restaurant tax authorized by Act 185 of 1965, as amended, has been levied by many municipalities in Arkansas and in some instances has been pledged to revenue bonds, as authorized by Act No. 977 of 1975, as amended, and the levy of such tax has been essential to the various tourism programs and projects of those municipalities and such projects have and will continue to result in substantial inflow of tourism dollars and the resulting economic benefits to residents of those municipalities and to the state as a whole; and
“(E) As the result of several recent cases in the Supreme Court of Arkansas, questions have arisen concerning the constitutional right of the General Assembly to authorize revenue bond financing and classify revenues for revenue purposes, and the General Assembly desires to reassert its constitutional right to do so as a separate branch of government to the fullest extent of its inherent sovereign power and constitutional power.
“Therefore, it is the purpose of this act is to enable cities of the first class to continue and expand their tourism promotion programs and projects to further enhance the revenues and other benefits derived from tourism and to thereby improve the quality of life of all residents of such cities and the residents of the entire state.”
Amendments. The 2007 amendment substituted “restaurants, or similar businesses” for “restaurants, and similar businesses” in (c)(2).
The 2009 amendment, in (c)(1), inserted “house, cabin, bed and breakfast, campground,” deleted “short-term” preceding “condominium,” inserted “or other similar” preceding “rental accommodations,” and made related changes.
The 2019 amendment added (c)(3).
Case Notes
Constitutionality.
This section is constitutional since it has a rational basis with classifications having a fair and substantial relation to their objective. Dicks v. Naff, 255 Ark. 357, 500 S.W.2d 350 (1973), cert. denied, 415 U.S. 958, 94 S. Ct. 1486, 39 L. Ed. 2d 573 (1974).
Where a city proposed the construction of a convention center-hotel complex, to be financed by the issuance of revenue bonds, without an election pursuant to § 14-170-201, the construction of this project by the city through the issuance of revenue bonds by the city was not violative of Ark. Const., Art. 16, § 1, as amended by Ark. Const. Amend. 13 prior to its repeal by Ark. Const. Amend. 62, § 11, since the promoters were building the hotel at their own expense, substantially contributing to the costs of the convention center, paying an annual rental, and the title to the hotel and convention center was being vested in the city. Purvis v. Hubbell, 273 Ark. 330, 620 S.W.2d 282 (1981) (decision under prior law).
Class Action.
Predominance requirement for class actions was satisfied in a suit brought by local taxing entities alleging underpayment of gross-receipts taxes, even if there were some differences in the tax ordinances, because each ordinance had been derived from and enacted under the authority of the same statutes. Hotels.com, L.P. v. Pine Bluff Adver. & Promotion Comm'n, 2013 Ark. 392, 430 S.W.3d 56 (2013).
Hospitality Tax.
Hospitality tax could not be added on to regular mixed drink tax imposed pursuant to § 3-9-213. City of Hot Springs v. Vapors Theatre Restaurant, 298 Ark. 444, 769 S.W.2d 1 (1989).
Cited: City of Hot Springs v. Creviston, 288 Ark. 286, 705 S.W.2d 415 (1986).