The beginning of a new fiscal year for the State of Arkansas brings a reduction in a sales and use tax rate. The rate for repairs to manufacturing machinery will now be at 3.5% falling from the current
4.5%.
Direct pay and limited direct pay companies are eligible immediately to begin accruing at the new reduced rate beginning with the July 2019 reporting period while non-direct pay facilities must file special forms to be eligible to participate in the program.
The State of Arkansas adopted the reduction in repairs by 1% per year until the repairs are non-taxable at the state level of taxation. This was done to help Arkansas be competitive in luring new facilities and keeping current facilities within the borders.
Our staff has the insight to help you make the most of this reduction. With over fifty (50) manufacturing clients we can help in reclassifying items that normally would not be considered manufacturing under "strict interpretation" be eligible for the reduced rate.
If your company is not taking advantage at the reduced rate, give us a call for a free analysis and enjoy reduced tax costs and a better bottom line.