These rules and regulations are promulgated for the enforcement
and administration of Act 7 of 1992 (2nd Ex. Sess.).
1. "Bottle" means any closed or sealed glass,
metal, paper, plastic or other type container regardless of its size or shape.
A paper or plastic cup with a removable lid is not a "bottle" for purposes of
2. "Bottled soft
drink" means any complete, ready-to-consume non-alcoholic drink, whether
carbonated or not.
3. "Diet soft
drink" means any low-calorie or sugarless soft drink that is not manufactured
and sold as a dietary supplement or for weight reduction.
4. "Dietary supplement" means any liquid or
powder manufactured for weight gain or maintenance.
5. "Director" means the director of the
Department of Finance and Administration or his authorized agent.
6. "Distributor, manufacturer or wholesaler"
means any person who receives, stores, manufactures, bottles or sells bottled
soft drinks, soft drink syrups, simple syrups, or powders or base products to
retail dealers, or to other manufacturers, wholesalers or distributors for
a. A distributor, manufacturer or wholesaler
who sells soft drinks, syrups, simple syrups, powders or base products to
retail dealers within Arkansas; and,
b. A retailer in this state who purchases
soft drinks, syrups, simple syrups, powders or base products from an unlicensed
distributor, manufacturer or wholesaler.
8. "Milk" means natural liquid milk or
natural milk concentrate regardless of animal source or butter fat content; or
dehydrated natural milk whether reconstituted or not.
9. "Milk product" means milk, cream, butter,
cheese, ice cream, skim milk, condensed milk or other milk derivative as
defined by Ark. Code Ann. §
10. "Natural fruit juice" means the original
liquid from pressing fruit, or the reconstitution of natural fruit juice
concentrate or dehydrated natural fruit juice.
11. "Natural vegetable juice" means the
original liquid resulting from pressing vegetables, or the reconstitution of
natural vegetable juice concentrate or dehydrated natural vegetable
12. "Non-alcoholic beverage"
means and includes all beverages not subject to tax under Ark. Code Ann. §
13. "Place of business" means any place where
soft drinks, syrups, simple syrups, powders or base products are manufactured,
held for wholesale distribution, received for sale, or sold in this
14. "Powder" or "other base"
means a solid mixture of basic ingredients used to make, mix or compound soft
drinks with water, ice, syrup, simple syrup, fruits, vegetables, fruit juice,
vegetable juice or any other product to make a complete soft drink.
14. "Retailer" or "retail dealer" means any
person, except a manufacturer, distributor or wholesaler, who purchases soft
drinks, syrups, simple syrups, powders or base products for sale in this state
to the ultimate consumer.
"Sale" means the transfer of possession for a valuable consideration of
tangible personal property.
"Simple syrup" means a mixture of sugar and water.
"Soft drink" means any non-alcoholic
beverage sold for human consumption including ready-to-drink coffee and tea
sold in bottles, cans or other sealed containers and "diet" or low-calorie soft
drinks. "Soft drink" does not include products used solely for coloring or
flavoring other beverages. Examples of such products include lime and lemon
juice, bitters, and clam juice. Examples of a 'soft drink" include, but are not
a. soda water, Club soda, seltzer
water and any other water to which carbonation has been added by the
manufacturer or bottler;
c. all soft drinks commonly
referred to as colas such as Coke, Pepsi, Dr. Pepper, Mr. Pibb, Tab, and RC
Cola, and including decaffeinated, sugarless or "diet" soft drinks;
d. artificially or naturally flavored drinks
of ten percent (10%) or less natural fruit or vegetable juice, including grape
soda, cherry soda, root beer, strawberry soda, lime soda, limeade, lemon soda,
lemonade, lemon-lime soda, orange soda, orangeade, flavored water, Mountain
Dew, 7-Up, Sprite, CountryTime, Crystal Lite, Clearly Canadian, and including
decaffeinated, sugarless or "diet" soft drinks;
e. low-alcohol or non-alcoholic beer, ale and
f. ready-to-drink liquid
mixes to which an alcoholic beverage may be added to produce beverages such as
margaritas, pina coladas, Tom Collins, and daiquiris;
g. chocolate-flavored sodas or drinks which
contain either natural or artificial flavoring and which do not contain milk or
"Syrup" means any liquid mixture of basic ingredients used to make, mix or
compound soft drinks with water, simple syrup, ice, fruits, vegetables, fruit
juice, vegetable juice or any other product suitable to make a complete soft
drink. "Syrups" include mixtures to which water and alcohol may be added to
produce a margarita, pina colada, Tom Collins, daiquiri or other similar
SOFT DRINK TAX
A tax is levied upon:
a. the sale in this state of soft drinks,
syrups, simple syrups, powders and base products by a manufacturer, wholesaler
or distributor to a retailer or other purchaser; and,
b. the purchase by a retailer in this state
of soft drinks, syrups, simple syrups, powders and base products from an
unlicensed manufacturer, wholesaler or distributor.
2. The tax is imposed upon and shall be paid
by each licensee and may be passed on to the retailer or other
The rate of tax shall
be as follows:
a. Two dollars ($2.00) per
gallon of soft drink syrup or simple syrup;
b. Twenty-one cents ($0.21) per gallon of
bottled soft drinks;
cents ($0.21) per gallon of soft drink which may be produced from a package or
container of powder or base product by following the manufacturer's
bottled soft drinks, syrups, simple syrups, powders or base products
("products") are sold to a retailer with a place of business in an Arkansas
city or unincorporated town which is divided by a state line from an
incorporated city or town in an adjoining state and which has a population less
than the population in the adjoining city, then the tax imposed on the licensee
shall be at the same rate as imposed in the adjoining state on similar sales;
provided, that the products are delivered to the retailer within the boundaries
of the city or town to be held for sale in the city or town to the ultimate
The following transactions are exempt from
the soft drink tax:
a. sales to the United
States Government or its agencies.
b. sales by a distributor, wholesaler or
manufacturer for export from this state, including sales to an Arkansas
retailer for delivery outside of this state.
c. the sale of any powder or base product
which when mixed with water or other liquid produces coffee or tea. Examples
include powdered instant tea and coffee, whether caffeinated, decaffeinated or
herbal. Loose or bagged tea leaves, coffee beans, and loose or bagged ground
coffee are not "powders or base products" subject to the tax.
d. the sale of any frozen concentrate or
freeze dried concentrate to which only water is added to produce a soft drink
containing more than ten percent (10%) natural fruit or vegetable juice.
Examples include frozen concentrated orange juice, apple juice, or grape
e. the sale of any soft
drink containing more than ten percent (10%) natural fruit or vegetable
f. sales of soft drinks,
syrups, simple syrups, powders or base products by a distributor, manufacturer
or wholesaler to a licensed distributor, manufacturer or wholesaler if the
purchaser's license number is clearly shown on the invoice. Sales to a retailer
are not exempt.
g. the sale of any
liquid or powder that is manufactured solely for consumption by infants and
commonly called "infant formula." Examples include Enfamil, Isomil, SMA,
Prosobee, Similac, and Nursoy.
the sale of any liquid or powder that is manufactured for use solely as a
dietary supplement or for weight reduction.
i. sales of bottled water to which no
flavoring, whether artificial or natural, or carbonation has been
sale of any powder or
other base product solely intended by the manufacturer to be sold for the
purpose of domestically mixing soft drinks by the ultimate consumer. This
exemption applies to sales of powders to:
retail businesses who purchase the powder for resale to customers, such as
grocery stores, health food stores and convenience stores. This exemption also
applies to retail businesses that purchase the powder for both resale and for
mixing and sale of soft drinks to the public, such as stores which operate
delicatessens, grills, and fountains.
(2) entities that purchase the powder for
mixing and in-house consumption or as part of a service provided to customers,
and not for resale. Examples include hospitals, nursing homes, rehabilitation
centers, daycares, and churches. This exemption also applies to sales to
entities which purchase the powder for both in-house consumption and retail
sale, such as hospitals and nursing homes which operate cafeterias open to the
public. This exemption does not apply to the sale of powders to entities that
are solely in the business of selling prepared food and beverages to customers,
such as bars, restaurants, and fast-food restaurants.
k. the sale of any product which has been
prepared by the manufacturer with milk or milk products.
2. There is no exemption from soft drink tax
for soft drinks, syrups, simple syrups, powders or base products a) donated by
a licensee to churches, schools, clubs, charitable organizations or other
organizations, or b) distributed free of charge by a licensee for promotional
or other purposes at political fund-raisers, rallies, sporting events, civic
group meetings or other similar gatherings.