Stricken language would be deleted from and underlined language would be added to present law.
Act 1007 of the Regular Session
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State of Arkansas As Engrossed: H4/7/25 H4/14/25 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1671 3
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By: Representative L. Johnson 5
By: Senator J. Boyd 6
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For An Act To Be Entitled 8
AN ACT TO AMEND THE LAW CONCERNING THE GROSS RECEIPTS 9
TAX; TO CREATE A GENERAL SALES AND USE TAX EXEMPTION 10
FOR SALES TO QUALIFIED NONPROFIT ORGANIZATIONS; AND 11
FOR OTHER PURPOSES. 12
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Subtitle 15
TO AMEND THE LAW CONCERNING THE GROSS 16
RECEIPTS TAX; AND TO CREATE A GENERAL 17
SALES AND USE TAX EXEMPTION FOR SALES TO 18
QUALIFIED NONPROFIT ORGANIZATIONS. 19
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21
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SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 4, is 23
amended to add an additional section to read as follows: 24
26-52-457. Sales to qualified nonprofit organization — Definition. 25
(a) As used in this section, "qualified nonprofit organization" means 26
an organization described in 26 U.S.C. § 501(c)(3), as it existed on January 27
1, 2025, that: 28
(1) Has an annual operating budget of less than two hundred 29
thousand dollars ($200,000); and 30
(2) Performs charitable community -based services in the state to 31
benefit residents of the state that are in need of assistance. 32
(b) The gross receipts or gross proceeds derived from the sale of 33
tangible personal property, specified digital products, a digital code, or 34
services are exempt from the gross receipts tax levied by this chapter and 35
the compensating use tax levied by the Arkansas Compensating Tax Act of 1949, 36 As Engrossed: H4/7/25 H4/14/25 HB1671
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§ 26-53-101 et seq., if: 1
(1) The sale is made to a qualified nonprofit organization; and 2
(2) If the sale is of tangible personal property, the tangible 3
personal property sold to the qualified nonprofit organization is not: 4
(A) A motor vehicle; 5
(B) A motorboat; 6
(C) An aircraft or airplane; 7
(D) An alcoholic beverage; 8
(E) Tobacco; 9
(F) A computer; 10
(G) A material used to construct a residential or 11
commercial structure; 12
(H) A household appliance; 13
(I) A mobile telephone or cellular telephone; 14
(J) An all-terrain vehicle; or 15
(K) A television. 16
(c) A nonprofit organization requesting recognition as a qualified 17
nonprofit organization shall file with the Secretary of the Department of 18
Finance and Administration an application as prescribed by the secretary 19
verifying the facts upon which the nonprofit organization claims the 20
exemption under this section. 21
(d)(1) Upon receipt of an application described in subsection (c) of 22
this section, the secretary shall respond in writing within a reasonable time 23
after the filing of the application either issuing an exemption certificate 24
to the qualified nonprofit organization or denying the application. 25
(2) If an application is denied, an explanation of the reason 26
for denial shall accompany the denial. 27
(3) If the secretary finds that a nonprofit organization no 28
longer meets the conditions to be a qualified nonprofit organization, the 29
secretary shall revoke an exemption certificate. 30
(e) The secretary may promulgate rules to implement this section, 31
including but not limited to rules regarding: 32
(1) An application process; and 33
(2) A reverification process. 34
(f) The secretary shall report annually to the Legislative Council the 35
number of exemption certificates that have been issued to qualified nonprofit 36 As Engrossed: H4/7/25 H4/14/25 HB1671
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organizations during the prior one (1) year period. 1
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SECTION 2. EFFECTIVE DATE. Section 1 of this act is effective on the 3
first day of the calendar quarter following the effective date of this act. 4
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/s/L. Johnson 6
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APPROVED: 4/22/25 9
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