"Heavy equipment" includes rough terrain
fork lifts, scissor lifts, extendable boom lifts, cranes, trenchers, loader
backhoes, excavators, bulldozers, motor graders, crawler tractors and loaders,
skid-steer loaders, scrapers, earth movers, compaction equipment, asphalt
pavers, demolition equipment, concrete pavers, wheel loaders, rock drills,
portable air compressors that are 100 CFM or greater, cable plows, boring
machines, or any other equipment determined by the Director to be heavy
equipment following the adoption of a regulation in accordance with state law.
a. Demolition equipment is limited to
equipment that is used to demolish structures or highway.
b. Rock drills are limited to equipment used
to drill holes in rock or concrete.
2. With the exception of portable air
compressors, the items listed in GR-15.2(A)(3) shall be considered to be heavy
equipment only if (i) the item is propelled by its own internal engine or
internal power source; and (ii) the item is intended for outside use.
Heavy equipment does not include the
a. Hand held tools;
b. Portable tools and attachments, with the
exception of portable air compressors 100 CFM or greater;
c. Farm tractors or small tractors used for
mowing, gardening, etc;
used in conjunction with the operation of a manufacturing or processing
g. Aircraft; or
1. All sales of new and used heavy equipment
are subject to sales or use tax unless otherwise exempted. The tax shall be
collected, reported and remitted by the heavy equipment dealer at the time of
2. At the time of sale, every
dealer who sells heavy equipment shall affix a decal to each piece of heavy
equipment sold as proof that either (i) sales tax has been paid on the heavy
equipment; or (ii) either the heavy equipment or the purchaser of the equipment
is exempt from tax. The dealer shall record the decal number on the sales
invoice or other document evidencing the sale.
3. The dealer shall affix the decal in a
prominent and clearly visible place on the heavy equipment.
4. A red decal shall be affixed to heavy
equipment that is taxable and for which the dealer collected the tax. If the
equipment is exempt from tax under the farming exemption, a blue decal shall be
affixed. If the equipment is exempt from tax under any other tax exemption
(i.e., manufacturing, timber harvesting, etc.), a green decal shall be affixed.
No decal is required for heavy equipment that is sold exempt from tax as a sale
for resale, because the dealer will affix the decal at the time the heavy
equipment is sold to the ultimate consumer.
A dealer who sells used heavy equipment
shall remove the old decal from the used equipment before it is resold and a
new decal shall be affixed when the item is resold. If the dealer fails to
remove the old decal, the Director shall assess the following penalties:
a. $100.00 for the first offense;
b. $200.00 for the second offense;
c. $500.00 for the third and
Decals may be obtained from the Department of Finance and Administration, Sales
and Use Tax Section, P.O. Box 1272, Little Rock, Arkansas 72203.
7. In the event a decal on heavy equipment is
lost or damaged, the purchaser of the equipment may obtain a replacement decal
from the Department. Before a replacement decal will be issued, the purchaser
must provide the original sales invoice or other document evidencing the sale
that shows the original decal number recorded by the dealer at the time of
Any person who purchases
heavy equipment for storage or use within Arkansas from a dealer located
outside of Arkansas, and who does not pay tax to the out of state dealer, shall
be liable for Arkansas use tax.
a. A purchaser
of heavy equipment who does not pay tax to the out of state dealer is required
to pay Arkansas use tax to the Department. The tax shall be reported and paid
to the Sales and Use Tax Section. Upon payment of the tax, the purchaser shall
receive a decal to affix to each piece of heavy equipment purchased.
b. If the purchaser has paid sales or use tax
to an out of state dealer, the purchaser shall present proof to the Sales and
Use Tax Section that the tax has been paid, and the purchaser shall receive a
decal to affix to each piece of heavy equipment.
C. SALES BY AUCTIONEERS.
Auctioneers who simply auction items for third parties, and who do not maintain
an inventory of their own, are not heavy equipment dealers and are not required
to affix a decal on heavy equipment they sell. However, if an auctioneer
maintains an inventory of items for sale which includes heavy equipment, then
the auctioneer must affix a decal on heavy equipment sold from the inventory.
In the event an auctioneer sells the inventory of a heavy equipment dealer that
is liquidating, the heavy equipment dealer is responsible for affixing a decal
to equipment sold.
D. DIRECT PAY
PERMIT HOLDERS. If heavy equipment is sold to the holder of a direct pay
permit, the heavy equipment dealer is not required to affix a decal. Instead,
the holder of the direct pay permit shall be required to contact DFA to obtain
the proper decal for the equipment.
1. Dealers who sell heavy equipment to
purchasers and elect to collect tax on the rental payments and claim the sale
for resale exemption at the time the equipment is purchased are not required to
affix a decal to the heavy equipment. The purchaser must obtain the applicable
decal from the Department of Finance and Administration prior to renting the
equipment. For example, if the lessor rents to an exempt entity, the
appropriate decal would be an "exempt" decal. However, if the lessor is
required to collect tax on the stream of rental payments, the appropriate decal
would be a red decal.
who sell heavy equipment to purchasers and elect to pay tax on the heavy
equipment at the time of sale must affix a red decal indicating that the dealer
has collected tax on the sale of the heavy equipment. The purchaser is not
required to affix any additional decal at the time of rental.