006.05.06 Ark. Code R. 005-GR-32 - EXEMPTIONS FROM TAX - FUEL FOR MANUFACTURING

A. STEEL MILLS. The gross receipts or gross proceeds derived from the sale of electricity and natural gas to qualified manufacturers of steel for use in connection with the steel mill are exempt. "Qualified manufacturer of steel" means a natural person, company or corporation engaged in the manufacture, refinement or processing of steel and more than fifty percent (50%) of the electricity or natural gas consumed by the manufacturer is used either:

1. To power an electric arc furnace or furnaces, continuous casting equipment, or rolling mill equipment in connection with melting, continuous casting, or rolling of steel; or,

2. In the preheating of steel for processing through a rolling mill.

B. ALUMINUM METAL. The gross receipts or gross proceeds derived from the sale of electricity used in the manufacture of aluminum metal by the electrolytic reduction process are exempt from the tax.

C. GLASS. The gross receipts or gross proceeds derived from the sale of natural gas used as fuel in the manufacture of glass are exempt from the tax.

D. SUBSTITUTE FUEL. The gross receipts or gross proceeds derived from the sale of substitute fuel used in producing, manufacturing, fabricating, assembling, processing, finishing, or packaging articles of commerce at manufacturing or processing plants or facilities in Arkansas are exempt from the tax. "Substitute fuel" means products or materials derived from tires, from municipal solid waste or other solid waste (except for wood chips or other wood by-products), from used motor oil, from used railroad ties, or from petroleum-based waste, for use in producing heat or power by burning.

E. TILE. Effective July 1, 2003, the gross receipts or gross proceeds derived from sales of electricity and natural gas used in the process of manufacturing wall and floor tile, by manufacturers of tile classified in Standard Industrial Classification ("SIC") 3253, are exempt from the tax. In order to claim this exemption the manufacturer in SIC 3253 must have begun construction of a manufacturing facility in Arkansas prior to January 1, 2003.

F. BIOMASS. The gross receipts or gross proceeds derived from the sale of gas produced from biomass in a facility meeting all of the eligibility requirements for the credit allowed under Internal Revenue Code § 29, as in effect on December 31, 1996, and sold to an entity for the purpose of generating steam, hot air or electricity to be sold to the gas producer are exempt from the tax. The gross receipts or gross proceeds derived from the sale of steam, hot air or electricity from the entity purchasing the gas produced from biomass in a facility meeting all of the eligibility requirements for the credit allowed under Internal Revenue Code § 29, as in effect on December 31, 1996, to the gas producer are exempt from the tax.

G. CHLOR-ALKALI MANUFACTURING PROCESS. The gross receipts or gross proceeds derived from the sale of electricity used for the production of chlorine and related chemicals using a chlor-alkali manufacturing process are exempt from the tax.

1. This exemption applies only to electricity used in a chlor-alkali manufacturing process performed at a manufacturing plant or facility located within the State of Arkansas.

2. The term "chlor-alkali manufacturing process" means an electrolytic process that uses either a diaphragm cell, mercury cell, or membrane cell to simultaneously produce chlorine and an alkali by the electrolysis of a salt solution.

Notes

006.05.06 Ark. Code R. 005-GR-32

Ark. Code Ann. §§ 26-52-903; 26-52-914; 26-52-401(24); 26-52-429; 26-53-134; 26-52-425; 26-53-143; 26-52-423; 2652-435: 26-52-438