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Vending

A taxpayer is given 3 options to manage their vending operations in Arkansas.  All vending machines must display an annually issued vending device decal, no matter which option is chosen.

• Option 1 involves the payment of sales tax directly to the supplier of all merchandise that will be sold through the taxpayer’s vending machines. Food sold through a vending machine can qualify for taxation at the Reduced Food Tax rate (see Rule 2007-3).  No Sales/Use Tax permit is required if Option 1 is chosen.
  
  After the opening of a Vending account, fiscal year decals are issued and placed on vending machines by the taxpayer.   Prior to the beginning of each new fiscal year, a decal order form is mailed out to all Vending accounts.  There are no fees for the annual Option 1 decals. 
   
• Option 2 involves reporting/paying the 7% Wholesale Vending Tax (see Rule 1995-2) each month on the merchandise to be sold through the taxpayer’s vending machines. Merchandise is purchased tax free under the sale for resale exemption.  A Sales/Use Tax Permit is required.  The taxpayer is required to file a monthly ET-1 Excise Tax Report and pay the appropriate tax. 
  
  After the opening of a Vending account, fiscal year decals are requested, issued, and placed on vending machines by the taxpayer.   Prior to the beginning of each fiscal year, a decal order form is mailed out to all Vending accounts.  There are no fees for the annual Option 2 decals. 
   
• Option 3 involves exempting vending merchandise purchases from tax under the sale for resale exemption.   A Sales/Use Tax Permit is required.  The taxpayer is required to file a monthly ET-1 Excise Tax   Report.
  
  After opening of a Vending account, fiscal year decals are purchased, issued, and placed on vending machines by the taxpayer.  The vending machine operator purchases Option 3 decals based on various factors – manual verses electric vending equipment, value of the vended goods, and bulk verses individually vended goods.   Prior to the beginning of each new fiscal year, a decal order form is mailed out to all Vending accounts. Decal costs are shown below.   

Option 3 category decal fees are:

Applicable Statutes: AR Code Ann. §26-57-1001 et seq.; AR Code Ann. §26-57-1201 et seq.

DFA Rule(s)

Forms

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