A. The gross
proceeds or gross receipts derived from the collection and disposal of solid
waste are subject to state and local gross receipts taxes. Tax should be
collected on the entire gross receipts derived from the fee charged for
collection and disposal of solid waste, without any deduction for costs, fees,
labor services performed, interest, losses, or any expenses whatsoever. Fees
paid by a service provider to the state, a city, county, or other governmental
subdivision, which are passed on to the customer are part of the gross receipts
for the collection and disposal of solid waste.
B. DEFINITIONS.
1. "Solid waste" means any garbage or refuse,
sludge from a wastewater treatment plant, water supply treatment plant, or air
pollution control facility, and other discarded material, including solid,
liquid, semisolid, or contained gaseous material resulting from residential,
industrial, commercial, mining, medical, agricultural, and restaurant
operations, and community activities. Solid waste includes yard waste. Solid
waste does not include solid or dissolved materials in domestic sewage, or
low-level radioactive waste as defined by the Interstate Low-Level Radioactive
Waste Compact codified at Ark. Code Ann. §
8-8-201 et seq. Solid waste does
not include recyclable material as defined in Ark. Code Ann. §§
8-9-104 and
8-6-702 that has been separated
from the solid waste stream for subsequent use in its present or reprocessed
form. Recyclable materials are removed from the solid waste stream at the point
where the materials are separated, identified, collected, or sorted for reuse
or reprocessing. Solid waste shall not include waste tires.
2. "Domestic sewage" means the water-carried
waste products from residences, public buildings, institutions, or other
buildings, including the excrementitious or other discharge from the bodies of
humans or animals, together with such groundwater infiltration and surface
water as may be present.
3.
"Disposal" means the final disposition of solid waste by means of landfilling,
incinerating, composting, dumping, abandoning, or other similar method. For
purposes of this rule, solid waste disposal does not include the management of
hazardous waste in accordance with the provisions of Ark. Code Ann. §
8-7-201 et seq. Hazardous waste
management includes the incineration of solid waste which has become commingled
with hazardous waste as part of the treatment of hazardous waste.
C. EXEMPTIONS FROM TAX. Sewer
services are not subject to the tax. Septic tank cleaning is not subject to the
tax.
D. PERSONS RESPONSIBLE FOR
COLLECTING AND REMITTING THE TAX.
1. The tax
shall be collected and remitted by the seller of the collection or disposal
services. Disposal services ("tipping fees") may be purchased exempt as sales
for resale by a person holding a retail permit and performing taxable
collection of waste services, if the taxes are included in the charges billed
by the person or entity collecting the waste.
2. A fee collected by a city, county, or town
from its residents for the collection and disposal of solid waste is subject to
tax. The disposal fees paid by the city or county to the landfill or other
disposal site are exempt as a sale for resale, provided the city, town, or
county collects and remits the applicable tax to the state. A city, town, or
county that collects the tax from its residents and contracts with a person or
entity for the collection and disposal of solid waste does not pay tax on
either the contract amount paid to the contractor or the disposal fee at the
landfill or other disposal site.
Example 1: City X collects a fee of $15.00 per month from its
residents for collection and disposal of solid waste. City X should collect tax
from its residents on the $15.00 fee. City X is not required to pay sales tax
on any fee charged to City X when it delivers the waste to the landfill. City X
is entitled to claim the sale-for-resale exemption for these landfill
charges.
Example 2: City X collects a fee of $15.00 per month from its
residents for collection and disposal of solid waste. City X contracts with
Contractor to pick up the solid waste and deliver it to the landfill. City X
pays Contractor a fee of $12.50 per month per resident. City X should collect
tax from its residents on the $15.00 fee. City X should not pay tax on the
$12.50 fee paid to Contractor. Contractor should not pay tax on the disposal
fee paid to the landfill.
3. A city, county, or town that provides
waste collection and disposal services with funds from tax revenues does not
collect tax from its residents for the collection or disposal of solid waste.
However, the city, county, or town must pay tax on the tipping (disposal) fees
(if the city, county, or town disposes of the waste) or on the amount paid to a
contractor who collects and disposes of the waste.
Example 1: County Y levied a tax that is dedicated to provide
funds for collection and disposal of solid waste of its residents. County Y
collects the solid waste from its residents and delivers it to the landfill.
County Y should pay tax on the disposal fees to the landfill.
Example 2: County Z levied a tax that is dedicated to provide
funds for collection and disposal of solid waste of its residents. County Z
contracts with Contractor to pick up the solid waste and deliver it to the
landfill. County Z pays Contractor a fee of $12.50 per month per resident.
Contractor should collect tax from County Z on the $12.50 fee paid to the
Contractor. The disposal fees at the landfill are exempt as a sale for
resale.
E. LOCAL
TAXES. The local taxes at the point of collection should be applied unless the
only service rendered is the taxable service of disposal of solid waste.
Example 1: XYZ Company collects garbage from residents and
businesses in Little Rock, Pulaski County, Arkansas. XYZ Company dumps the
garbage in the Pulaski County Landfill, which is located outside of the city
limits of Little Rock, Arkansas. XYZ Company charges its customers in Little
Rock, Pulaski County, Arkansas for the collection and disposal services. The
City of Little Rock and Pulaski County have a sales tax. The place of
collection determines what tax is due. Accordingly, the Arkansas state sales
tax, the City of Little Rock sales tax, and the Pulaski County sales tax apply.
XYZ Company holds a retail permit and purchases the disposal services from the
Pulaski County Landfill exempt from tax as a sale for resale.
Example 2: J.T. lives in Little Rock, Pulaski County,
Arkansas. The City of Little Rock and Pulaski County have a sales tax. J.T.
delivers and dumps some garbage in the Pulaski County Landfill, which is
located outside of the city limits of Little Rock, Arkansas. J.T. must pay
sales tax on the landfill disposal charges. The place of disposal determines
what tax is due. Accordingly, the Arkansas state sales tax and the Pulaski
County sales tax apply (no Little Rock tax is due).
F. MULTISTATE TRANSACTIONS. Collection and
disposal services that cross state lines should be treated as follows.
1. Collection in Arkansas. When waste
collection occurs in Arkansas and waste disposal occurs out of state, only the
waste collection service is taxable. Disposal services furnished in another
state are not subject to Arkansas sales tax.
2. Disposal in Arkansas. When waste is
collected in another state and deposited in a landfill in Arkansas, the
disposal services are subject to Arkansas sales tax. Disposal services
furnished in Arkansas are subject to tax unless an exemption applies.
