006.05.96 Ark. Code R. § 005 - Amendment to Gross Receipts Regulation GR-53

This amendment is necessary in order to implement and enforce Act 358 of 1995. Gross Receipts Regulation GR-53(B), (C) and (D) are amended to read as follows:

B. It is necessary that the person claiming the benefits of this sale for resale exemption prove to the seller that he s engaged in the business of reselling the articles purchased by him. The purchaser must provide the seller with the purchaser's retail permit number if the sale is made within Arkansas. In addition to furnishing his retail permit number to the seller, the purchaser must certify in writing to the seller that he (the purchaser) is engaged in the business of reselling the articles purchased. Failure to so certify, or to falsely certify with the knowledge that the items purchased are not for resale, shall be sufficient grounds upon which the Commissioner may cause the purchaser's retail permit to be canceled. Certification may be made on the bill, invoice or sales slip retained by the seller or by furnishing a certification letter to the seller which contains the following:
(1) the name and address of the purchaser;
(2) the retail permit number of the permit issued to the purchaser;
(3) a statement that the purchaser is engaged in the business of reselling the articles purchased;
(4) a statement that the articles purchased are purchased for resale,-
(5) the signature of the purchaser or a person authorized to legally bind the purchaser.

If certification is made directly on the bill, sales slip or invoice, the purchaser need only note his retail permit number and write the following statement (or a reasonable approximation thereof): "I, (name, position, business name, hereby certify that the materials listed on the (bill, invoice or sales slip) are purchased for resale and that I am regularly engaged in the business of reselling the items noted on this (bill, invoice or sales slip) . " The purchaser or his authorized agent must then sign the bill, invoice or sales slip and return a copy thereof to the seller for his records.

Alternatively, certification may be made in compliance with this regulation by completing the Resale Certificate printed as Exhibit "A" following this regulation.

C. If a retail permit holder purchases goods, wares, and merchandise from a seller on a regular basis, then the permit holder may furnish the Resale Certificate or certification letter described in Section (B) of this regulation to the seller and the seller may subsequently make sales of tangible personal property to the retail permit holder without requiring a certification letter or certification statement for each subsequent sale. The retail permit holder must notify the seller of all purchases which are not for resale and remit the applicable amount of tax thereon. If the retail permit holder fails to so notify the seller of purchases not intended for resale, then sufficient grounds shall exist for the Commissioner to cancel the retail permit of the retail permit holder who failed to so notify the seller.

NOTE: For special rules affecting contractors, see Gross Receipt Regulation GR-21.

1. The seller of items intended for resale must satisfy the requirements of Section (B) or (C) of this regulation. If the seller does not require the purchaser to perform the requirements listed in Section (B) or (C) and the sale was otherwise taxable, then the seller shall be liable for the tax upon the gross receipts or gross proceeds derived from the sale of the items.
2. If the seller of items intended for resale accepts a certification or completed Resale Certificate in good faith, then the seller shall a not be liable for tax on the gross receipts from the sale of goods regardless of the subsequent taxable use of the goods by the purchaser. A seller takes a Resale Certificate in good faith if he has no actual knowledge at the time of the sale that the purchaser is not entitled to the resale exemption. Actual knowledge may be implied from a previous course of dealing, knowledge of the purchaser's business, knowledge of the purchaser's intended use for the goods, or other facts and circumstances which should cause a reasonable person to refuse to accept the Resale Certificate as a basis for exempting the transaction from sales tax.

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006.05.96 Ark. Code R. § 005

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