Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 SENATE BILL 419 3
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By: Senator G. Leding 5
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For An Act To Be Entitled 8
AN ACT TO CREATE A SALES AND USE TAX EXEMPTION FOR 9
CERTAIN SALES TO A CULTIVATION FACILITY; AND FOR 10
OTHER PURPOSES. 11
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Subtitle 14
TO CREATE A SALES AND USE TAX EXEMPTION 15
FOR CERTAIN SALES TO A CULTIVATION 16
FACILITY. 17
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19
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SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 4, is 21
amended to add an additional section to read as follows: 22
26-52-457. Cultivation facility. 23
(a) As used in this section: 24
(1) "Cultivation facility" means the same as defined in Arkansas 25
Constitution, Amendment 98, § 2; 26
(2)(A) "Finished goods packaging" means product packaging for 27
usable marijuana that: 28
(i) Is received by a qualifying patient; 29
(ii) Is child resistant or contains a child -30
resistant container; and 31
(iii) Has product information that is directly 32
printed on the packaging of the finished product or has an attached label or 33
leaflet that contains product information. 34
(B) "Finished goods packaging" includes without limitation 35
a label attached to the product packaging; 36 SB419
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(3) "Medical use" means the same as defined in Arkansas 1
Constitution, Amendment 98, § 2; 2
(4) "Qualifying patient" means the same as defined in Arkansas 3
Constitution, Amendment 98, § 2; 4
(5) "Usable marijuana" means the same as defined in Arkansas 5
Constitution, Amendment 98, § 2; and 6
(6) "Utility" means electricity, liquefied petroleum gas, 7
natural gas, and water. 8
(b) The gross receipts or gross proceeds derived from the sale of the 9
following to a cultivation facility are exempt from the gross receipts tax 10
levied by this chapter and the compensating use tax levied by the Arkansas 11
Compensating Tax Act of 1949, § 26 -53-101 et seq.: 12
(1) Seeds used in the cultivation and production of usable 13
marijuana; 14
(2)(A) New and used equipment, machinery, and related 15
attachments used exclusively in the cultivation and production of usable 16
marijuana. 17
(B) The exemption provided in subdivision (b)(2)(A) of 18
this section does not apply to a purchase of a repair or replacement part for 19
new or used machinery, equipment, or a related attachment; 20
(3)(A) A utility that is used exclusively in the operation of 21
the cultivation facility. 22
(B)(i) A utility subject to the exemption provided under 23
subdivision (b)(3)(A) of this section shall be separately metered from a 24
utility used for any other purpose by the taxpayer. 25
(ii) However, the rules promulgated under subsection 26
(c) of this section may establish additional or alternate requirements for 27
the metering of utilities under this section. 28
(iii) Before allowing the exemption of a utility 29
under this section, the Secretary of the Department of Finance and 30
Administration may require a seller of a utility to obtain a certificate from 31
the taxpayer in the form prescribed by the secretary, certifying that the 32
taxpayer is eligible for the exemption under this section; 33
(4) Consumable materials, ingredients, and chemicals used in the 34
cultivation, extraction, or manufacturing of marijuana for medical use; 35
(5) Finished goods packaging; and 36 SB419
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(6) A device that is used to house usable marijuana that is 1
placed in finished goods packaging, including without limitation a syringe, 2
concentrate container, suppository mold, topical pump, and cartridge. 3
(c) The secretary shall promulgate rules for the proper administration 4
of this section. 5
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SECTION 2. EFFECTIVE DATE. Section 1 of this act is effective on the 7
first day of the calendar quarter following the effective date of this act. 8
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