006.05.08 Ark. Code R. 004-GR-9.18

Current through Register Vol. 49, No. 9, September, 2024

Rule 006.05.08-004-GR-9.18 - LABOR ASSOCIATED WITH THE INITIAL INSTALLATION, ALTERATION, ADDITION, OR REPLACEMENT OF MACHINERY AND EQUIPMENT THAT QUALIFIES FOR AN EXEMPTION FROM TAX AS MACHINERY AND EQUIPMENT USED IN MANUFACTURING:

A. The service of initial installation, alteration, addition, or replacement of machinery and equipment that qualifies for the exemption from the gross receipts or compensating use tax provided by Ark. Code Ann. §§ 26-52-402 and 26-53-114 (machinery and equipment used directly in manufacturing) is not subject to gross receipts or use tax.

B. Labor services that are exempt from tax as provided in this rule are exempt without regard to who performs and bills for the labor services.

C. Labor performed in connection with the replacement of exempt manufacturing machinery is exempt from tax only if the machinery being replaced meets all of the requirements for exemption required by Ark. Code Ann. §§ 26-52-402 and 26-53114, including the requirement that substantially all of the machinery required to perform an essential function is replaced.

D. The service of repair of exempt machinery is taxable.

006.05.08 Ark. Code R. 004-GR-9.18

Ark. Code Ann. § 26-52-402