006.05.06 Ark. Code R. 005-GR-22

Current through Register Vol. 49, No. 10, October, 2024

Rule 006.05.06-005-GR-22 - PERSONS REQUIRED TO COLLECT AND REMIT TAX - SPECIFIC BUSINESS - FUNERAL HOMES AND FUNERAL DIRECTORS

A. GENERALLY. Funeral homes or funeral directors must collect and pay the tax upon the gross receipts or gross proceeds of all sales of tangible personal property sold by them in connection with the services they offer.

B. INVOICING. Where the funeral home or funeral director separately states the charges for items of tangible personal property on his bill or invoice, then the tax should be collected and remitted on the gross receipts or gross proceeds derived from the sale of the items of tangible personal property.

C. SHIPMENT. Where a corpse is shipped by one funeral home located in Arkansas to another funeral home located in Arkansas, the tax must be collected and remitted on the gross receipts or gross proceeds derived from the sale of the casket, shipping case, shipping box and freight, by the selling funeral home. If, however, the body is shipped outside the State of Arkansas, then see GR-5 for applicable rules.

D. CONSUMERS. Funeral homes and funeral directors are considered the consumers of preparation room supplies and equipment, display room equipment, chapel furnishings and equipment, and cemetery equipment, and must pay the tax to the suppliers of these goods at the time of purchase.

E. PREPAID FUNERAL CONTRACTS.

1. When tangible personal property is sold through a pre-paid funeral plan, the funeral home or funeral director has the following options:

a. Remitting gross receipts tax when the property is provided to the customer. The tax shall be calculated at the rate in effect when the property is provided; or

b. Remitting gross receipts tax on the date the contract is purchased. The tax shall be calculated at the rate in effect when the contract is purchased.

2. If the funeral home elects to pay gross receipts tax on the date the contract is purchased, the gross receipts tax must be reported on the sales tax report for the month in which the contract is purchased. Those funeral homes who have received approval from the Director of Revenue to pay tax on a cash basis should remit the gross receipts tax as outlined in GR-78.

F. SOURCING. The state and local sales or use tax due is determined by Ark. Code Ann. § 26-52-521 and GR-76.

1. Tangible personal property sold in connection with the services offered by funeral homes and funeral directors, such as caskets, clothing, or similar items, are deemed received at the location where the remains are placed in the casket.

2. The tax applicable to the sale of burial vaults and other items purchased for delivery is determined by the location of delivery.

Example: If the burial vault is delivered to a cemetery, then the applicable local tax is that of the cemetery location.

006.05.06 Ark. Code R. 005-GR-22

Ark. Code Ann. §§ 26-52-301(1); 26-52-511