26-63-102. Definitions.

26-63-102. Definitions. As used in this chapter: (1) “Consumer” means a person to which the taxable sale is made or to which a taxable service is furnished; (2) “Engage in business” means any local activity regularly and persistently pursued by any seller or vendor through agents, employees, or representatives with the object of gain, profit, or advantage and that results in a sale, delivery, or the transfer of the physical position of any tangible personal property by the vendor to the vendee at or from any point within Arkansas, whether from warehouse, store, office, storage point, rolling store, motor vehicle, delivery conveyance, or by any method or device under the control of the seller effecting such a local delivery without regard to the terms of sale with respect to point of acceptance of the order, point of payment, or any other condition; (3)(A) “Gross receipts” or “gross proceeds” means the total amount of consideration, including cash, credit, property, and services, for which tangible personal property or a taxable service is sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following: (i) The seller's cost of the tangible personal property sold; (ii) The cost of materials used, labor or service cost, interest, any loss, any cost of transportation to the seller, any tax imposed on the seller, or any other expense of the seller; (iii) Any charge by the seller for any service necessary to complete the sale; (iv) Delivery charge; (v)(a) Installation charge. (b) However, an installation charge will not be included in the gross receipts or gross proceeds if it is not a specifically taxable service under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq., and the installation charge has been separately stated on the invoice, billing, or similar document given to the purchaser; (vi) The value of exempt tangible personal property given to the purchaser if taxable and exempt tangible personal property have been bundled together and sold by the seller as a single product or piece of merchandise; and (vii) Credit for any trade-in. (B) “Gross receipts” or “gross proceeds” does not include: (i) A discount, including cash, term, or a coupon that is not reimbursed by a third party and that is allowed by a seller and taken by a purchaser on a sale; (ii) Interest, financing, or a carrying charge from credit extended on the sale of tangible personal property or a taxable service, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser; and (iii) Any tax legally imposed directly on the consumer that is separately stated on the invoice, bill of sale, or similar document given to the purchaser; (4)(A)(i) “Lease” or “rental” means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. (ii) A lease or rental may include future options to purchase or extend. (B) “Lease” or “rental” does not include: (i) A transfer of possession or control of tangible personal property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments; (ii) A transfer of possession or control of tangible personal property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price that does not exceed the greater of one hundred dollars ($100) or one percent (1%) of the total required payments; or (iii)(a) Providing tangible personal property along with an operator for a fixed or indeterminate period of time. (b) A condition of this exclusion in this subdivision (4)(B)(iii) is that the operator is necessary for the equipment to perform as designed. (c) For the purpose of this subdivision (4)(B)(iii), an operator must do more than maintain, inspect, or set up the tangible personal property. (C) “Lease” or “rental” includes an agreement covering a motor vehicle and trailer if the amount of consideration may be increased or decreased by reference to the amount realized upon the sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(2), as in effect on January 1, 2007. (D) This definition of “lease” or “rental” in this subdivision (4) shall: (i) Be used for excise tax purposes under this chapter regardless of whether a transaction is characterized as a lease or rental under generally accepted accounting principles, the Internal Revenue Code, as in effect on January 1, 2007, the Uniform Commercial Code, § 4-1-101 et seq., or another provision of federal, state, or local law; (ii) Be applied only prospectively from January 1, 2008, and shall have no retroactive impact on existing leases or rentals; and (iii) Impact neither any existing sale-leaseback exemption nor exclusion; (5) “Long-term rental” means a lease of thirty (30) days or more to a single consumer; (6) “Motor vehicle” means a vehicle that is self-propelled and is required to be registered for use on the highway; (7) “Person” includes any individual, partnership, limited liability company, limited liability partnership, corporation, estate, trust, fiduciary, or any other legal entity; (8)(A) “Sale” means the transfer of either the title or possession, except in the case of a lease or rental for a valuable consideration of tangible personal property regardless of the manner, method, instrumentality, or device by which the transfer is accomplished. (B) “Sale” includes the: (i) Exchange, barter, lease, or rental of tangible personal property; or (ii) Sale, giving away, exchanging, or other disposition of admissions, dues, or fees to clubs, to places of amusement, to recreational or athletic events, or for the privilege of having access to or the use of amusement, athletic, or entertainment facilities. (C) “Sale” does not include the: (i) Furnishing or rendering of a service except as otherwise provided in this section; or (ii) Transfer of title to a vehicle by the vehicle owner to an insurance company as a result of the settlement of a claim for damages to the vehicle. (D)(i) In the case of a lease or rental of tangible personal property, including motor vehicles and trailers for less than thirty (30) days, any tax levied by this chapter shall be paid on the basis of rental or lease payments made to the lessor of the tangible personal property during the term of the lease or rental regardless of whether Arkansas gross receipts tax or compensating use tax was paid by the lessor at the time of the purchase of the tangible personal property. (ii)(a) Except as provided in subdivision (8)(D)(ii)(b) of this section, in the case of a lease or rental of tangible personal property for thirty (30) days or more, the tax shall be paid on the basis of rental or lease payments made to the lessor of the tangible personal property during the term of the lease or rental unless Arkansas gross receipts tax or compensating use tax was paid by the lessor at the time of the purchase of the tangible personal property. (b) In the case of a lease or rental of a motor vehicle for thirty (30) days or more, the tax shall be paid on the basis of rental or lease payments made to the lessor of the motor vehicle during the term of the lease or rental; (9) “Secretary” means the Secretary of the Department of Finance and Administration or any of his or her authorized agents; (10) “Short-term rental” means a rental or lease of tangible personal property for a period of less than thirty (30) days to a single consumer; (11) “Tangible personal property” means personal property that can be seen, weighed, measured, felt, or touched or that is in any other manner perceptible to the senses; and (12) “Taxpayer” means any person liable to remit a tax levied by this chapter or to make a report for the purpose of claiming any exemption from payment of a tax levied by this chapter.