A. Any person who
performs taxable labor for any other person who holds a retail permit need not
collect and remit tax upon labor services performed for that person holding the
retail permit if, and only if, the labor is to be charged to, and the tax
collected from, the ultimate consumer by the person purchasing the taxable
labor.
Example: Seller operates an automobile paint and body shop.
Retailer, an automobile dealer, contracts with Seller to repair and paint
automobiles for those consumers to whom Retailer has sold automobiles. Retailer
performs the necessary engine repairs to the damaged automobiles but contracts
with Seller to perform the body and paint work. If Retailer bills the consumer
for all work performed by both Seller and Retailer, and collects the applicable
tax on the work, then Seller need not collect tax from Retailer.
B. The tax does not apply to the
sale of service provided by coin-operated car washes where the car-washing
equipment is activated by the insertion of a coin or coins into a slot or
receptacle and where the labor of washing the exterior of the car or motor
vehicle is performed solely by the customer or by mechanical
equipment.
C. The tax does not
apply to the sale of services performed on watches and clocks which are
received by mail or common carrier from outside this State and which, after the
service is performed, are returned by mail or common carrier, or in the
repairman's own conveyance, to points outside this State.
D. Prior to December 1, 2004, the tax does
not apply to the sale of repair or maintenance services of railroad parts,
railroad cars and equipment brought into the State of Arkansas solely and
exclusively for the purpose of being repaired, refurbished, modified, or
converted within this State. The tax does apply to any parts, materials, or
supplies purchased in the repair, refurbishing, conversion or modification of
railroad parts, railroad cars, and equipment. After December 1, 2004, the tax
does not apply to the parts or labor used in the repair and maintenance of
railroad parts, railroad cars and equipment owned by railroad companies or
carriers.
E. The gross proceeds or
gross receipts derived from the repair or refurbishing of telephone instruments
are exempt if the instruments are sent into Arkansas for repair and then
shipped out of Arkansas to the state of origin.
F. The gross receipts or gross proceeds
derived from the repair or remanufacture of industrial metal rollers is exempt
from tax if:
1. The rollers have a
remanufactured, nonmetallic material covering on all or part of the roller
surface; and
2. The rollers are
brought into Arkansas solely and exclusively for the purpose of repair or
manufacture; and
3. The rollers are
shipped back to their state of origin after repair or remanufacture.
G. Automobile detailing services,
such as interior and exterior car washing, or waxing, and engine cleaning and
degreasing, are exempt from tax pursuant to GR-53 as a sale for resale if, and
only if all requirements of GR-53 are met, and:
1. The business for which the detailing is
performed is in the business of reselling the detailing service; or
2. The detailing becomes a recognizable and
integral part of an automobile which is to be sold by a person or company
regularly engaged in the business of reselling automobiles.
