• April 18, 2011

Arkansas – Reduced Rates on Energy Sold to Manufacturers

Sales and Use tax rates on natural gas and electricity sold to manufacturers have been reduced.

The Arkansas sales and use tax rates on natural gas and electricity sold to manufacturers and to certain electric power generators have been reduced. Effective July 1, 2011, the rates for natural gas and electricity sold for use directly in the manufacturing process is reduced from 3.125% to 2.625%. To obtain the total tax rate, an additional 0.125% constitutional rate must be added to the new rate.

Manufacturers may file a refund request or amended return to claim the reduced tax rate. When the amount of tax savings received by all taxpayers as a result of the above rate reduction reaches $27 million during a fiscal year, the Arkansas Department of Finance and Administration will discontinue the refund and amended return process.

Refund requests and amended returns will be processed in the order they are received. A taxpayer that did not receive a refund in a prior year will be given priority to receive a refund in the subsequent fiscal year, and the statute of limitations for refunds and amended returns will be extended for one year for such taxpayers to allow the payment of a refund.

If you would like additional information on this topic or have any questions, please contact the taxdesk@thesaltgroup.com