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 less than ten percent (10%) 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 directions.
4. If 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 consumer.
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.
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.
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 juice.
sale of any soft drink containing more than ten percent (10%) natural fruit or
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
h. the sale of any liquid
or powder that is manufactured for use solely as a dietary supplement or for
i. sales of
bottled water to which no flavoring, whether artificial or natural, or
carbonation has been added.
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:
(1) 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
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
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