The Sales and Use Tax Section has developed a form for individuals to report the Use Tax on purchases made from out-of-state. Use Tax is a tax on tangible personal property purchased out-of-state and brought into Arkansas for use, storage, consumption, or distribution. The tax is designed to assure fair competition between Arkansas businesses and out-of-state businesses.
Businesses and individuals should pay Use Tax if they:
- Purchased items outside Arkansas that would be taxable if purchased in Arkansas (including items from catalogues, TV advertisements, magazines, the Internet, etc.)
- Use, store, consume, or distribute these items in Arkansas, and
- Have not paid Arkansas sales tax or an equivalent amount to another state.
Examples of items subject to Use Tax include records, CD's, books, furniture, jewelry, clothing, food, hunting and fishing gear, etc. These are only a few examples; all tangible personal property purchased out of state is subject to the Use Tax.
The State Use Tax rate is the same as the Sales Tax rate, 6% (residents inside the city limits of Texarkana the state rate is 7%. (Effective March 1, 2004) In addition, you are required to remit the city and/or county tax for where the items are first delivered in Arkansas. A list of tax rates for cities and counties may be obtained from the Sales Tax Office or downloaded from this website (see below). If you legally paid sales tax on the items in the other state, you could be entitled to a tax credit for the tax paid to the other state against the tax due Arkansas. If you pay less than the Arkansas tax rate to the other state, you must pay Arkansas the difference.
The Individual Consumer Use Tax Form is available in the taxpayer's state income tax booklet, may be downloaded from the Sales and Use Tax Section's website, or obtained by calling the Sales and Use Tax Office. If you have further questions regarding Use Tax, you may the Sales and Use Tax Office at (501) 682-7104. Office hours are 8:00 am to 4:30 pm.
Use Tax is a tax on tangible personal property purchased out-of-state and brought into Arkansas for use, storage, consumption, or distribution. The tax is designed to assure fair competition between Arkansas businesses and out-of-state businesses.