Depending on where the sale takes place, different rates of sales tax apply in Arkansas. The local sales taxes range from 0.125% to 5.125% in addition to the state’s 6.5% sales tax. For instance, the combined sales tax rate in Fort Smith, Arkansas, consists of a state tax of 6.5% and a local tax of 3.25%. 501(c)(3) organizations are exempt from paying sales tax on goods they buy for their personal use, but they are still required to collect and repay the tax on goods they sell. In Arkansas, non-profit businesses that sell tangible personal property or taxable services must also collect sales tax.
A company may be subject to fines and interest charges if it fails to collect and submit sales tax. The Arkansas Department of Finance and Administration has other legal options for recouping unpaid taxes, such as wage garnishment and property liens.
In conclusion, companies in Arkansas are tasked with collecting sales tax from customers who purchase tangible personal property or taxable services. Non-profit organizations are not excluded from collecting and remitting sales tax on goods they sell; the rate varies depending on the area of the transaction. The Arkansas Department of Finance and Administration may take legal action, impose fines, and charge interest for failure to collect and remit sales tax.