006.05.06 Ark. Code R. 005-GR-9.18 - LABOR ASSOCIATED WITH THE INITIAL INSTALLATION, ALTERATION, ADDITION, OR REPLACEMENT OF MACHINERY AND EQUIPMENT THAT QUALIFIES FOR AN EXEMPTION FROM TAX AS MACHINERY AND EQUIPMENT USED IN MANUFACTURING
A. The service of initial installation,
alteration, addition, or replacement of machinery and equipment that qualifies
for the exemption from the gross receipts or compensating use tax provided by
Ark. Code Ann. §§
26-52-402 and
26-53-114 (machinery and equipment
used directly in manufacturing) is not subject to gross receipts or use
tax.
B. Labor services that are
exempt from tax as provided in this rule are exempt without regard to who
performs and bills for the labor services.
C. Labor performed in connection with the
replacement of exempt manufacturing machinery is exempt from tax only if the
machinery being replaced meets all of the requirements for exemption required
by Ark. Code Ann. §§
26-52-402 and 26-53114, including
the requirement that substantially all of the machinery required to perform an
essential function is replaced.
D.
The service of repair of exempt machinery is taxable.
Notes
Ark. Code Ann. § 26-52-402
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