A. Any person who
performs taxable labor for any other person who holds a retail permit need not
collect and remit tax upon labor services performed for that person holding the
retail permit if, and only if, the labor is to be charged to, and the tax
collected from, the ultimate consumer by the person purchasing the taxable
labor.
Example: Seller operates an automobile paint and body shop. Retailer,
an automobile dealer, contracts with Seller to repair and paint automobiles for
those consumers to whom Retailer has sold automobiles. Retailer performs the
necessary engine repairs to the damaged automobiles but contracts with Seller
to perform the body and paint work. If Retailer bills the consumer for all work
performed by both Seller and Retailer, and collects the applicable tax on the
work, then Seller need not collect tax from Retailer.
B. The tax does not apply to the sale of
service provided by coin-operated car washes where the car-washing equipment is
activated by the insertion of a coin or coins into a slot or receptacle and
where the labor of washing the exterior of the car or motor vehicle is
performed solely by the customer or by mechanical equipment.
C. The tax does not apply to the sale of
services performed on watches and clocks which are received by mail or common
carrier from outside this State and which, after the service is performed, are
returned by mail or common carrier, or in the repairman's own conveyance, to
points outside this State.
D. Prior
to December 1, 2004, the tax does not apply to the sale of repair or
maintenance services of railroad parts, railroad cars and equipment brought
into the State of Arkansas solely and exclusively for the purpose of being
repaired, refurbished, modified, or converted within this State. The tax does
apply to any parts, materials, or supplies purchased in the repair,
refurbishing, conversion or modification of railroad parts, railroad cars, and
equipment. After December 1, 2004, the tax does not apply to the parts or labor
used in the repair and maintenance of railroad parts, railroad cars and
equipment owned by railroad companies or carriers.
E. The gross proceeds or gross receipts
derived from the repair or refurbishing of telephone instruments are exempt if
the instruments are sent into Arkansas for repair and then shipped out of
Arkansas to the state of origin.
F.
The gross receipts or gross proceeds derived from the repair or remanufacture
of industrial metal rollers is exempt from tax if:
1. The rollers have a remanufactured,
nonmetallic material covering on all or part of the roller surface;
and
2. The rollers are brought into
Arkansas solely and exclusively for the purpose of repair or manufacture;
and
3. The rollers are shipped back
to their state of origin after repair or remanufacture.
G. Automobile detailing services, such as
interior and exterior car washing, or waxing, and engine cleaning and
degreasing, are exempt from tax pursuant to GR-53 as a sale for resale if, and
only if all requirements of GR-53 are met, and:
1. The business for which the detailing is
performed is in the business of reselling the detailing service; or
2. The detailing becomes a recognizable and
integral part of an automobile which is to be sold by a person or company
regularly engaged in the business of reselling automobiles.
