Arkansas Code § 26-18-303 - Records Confidential and Privileged -- Exceptions

(a) (1) The Director of the Department of Finance and Administration is the official custodian of all records and files required by any state tax law to be filed with the Director of the Department of Finance and Administration and is required to take all steps necessary to maintain their confidentiality.

(2) (A) (i) Except as otherwise provided by this chapter, the records and files of the Director of the Department of Finance and Administration concerning the administration of any state tax law are confidential and privileged.

(ii) These records and files and any information obtained from these records or files or from any examination or inspection of the premises or property of any taxpayer shall not be divulged or disclosed by the Director of the Department of Finance and Administration or any other person who may have obtained these records and files.

(B) It is the specific intent of this chapter that all tax returns, audit reports, and information pertaining to any tax returns, whether filed by individuals, corporations, partnerships, or fiduciaries, shall not be subject to the provisions of the Freedom of Information Act of 1967, § 25-19-101 et seq.

(b) The provisions against disclosures shall not apply to the following:

(1) Publication of statistics by the Director of the Department of Finance and Administration classified to prevent the identification of a particular taxpayer;

(2) Use of the information in records filed under any state tax law by the Director of the Department of Finance and Administration when conducting any audit or investigation of any taxpayer in regard to any state tax;

(3) (A) Disclosure of information to the Attorney General of this state, any prosecuting attorney, or any other individual who is empowered by law to prosecute criminal and civil violations of any state tax law when the Director of the Department of Finance and Administration initiates the investigation.

(B) If the prosecution is initiated by the Attorney General or a prosecuting attorney, the Director of the Department of Finance and Administration shall not disclose any information unless required by subpoena issued by a circuit court.

(C) Information may be introduced as evidence by the Attorney General, a prosecuting attorney, or other individual so empowered when the individual is prosecuting any civil or criminal violation of state tax law;

(4) Disclosure compelled by any Arkansas circuit court, the Supreme Court, the Court of Appeals, or by any federal court of information involved in any case or controversy before that court;

(5) Disclosure by the taxpayer or the taxpayer's authorized agent or by the Director of the Department of Finance and Administration, at the taxpayer's request, of any information which the Director of the Department of Finance and Administration has concerning that taxpayer;

(6) Disclosure by the Director of the Department of Finance and Administration, at the Director of the Department of Finance and Administration's discretion, of information from the records of any state tax law to comparable officials of any other state or the United States who are charged with the administration of a similar tax;

(7) Disclosure of motor vehicle titling and registration information, all licenses and permits issued to owners and operators of coin-operated amusement machines pursuant to §§ 26-57-402, 26-57-408 -- 26-57-421, and 26-77-303, and tax records, files, and other information relating to sales of aviation fuel at airports and other aviation fuel outlets;

(8) Disclosure of information other than income tax information at an administrative hearing held regarding the issuance, cancellation, revocation, or suspension of licenses or permits issued by the Director of the Department of Finance and Administration or any other state agency or department;

(9) (A) Disclosure to the Arkansas Student Loan Authority, the Department of Higher Education, the Student Loan Guarantee Foundation of Arkansas, or any Arkansas public institution of higher education of the last known address or whereabouts or the last known employer of any person from whom these agencies are charged with collecting a student loan or other student indebtedness.

(B) In providing such information, the Director of the Department of Finance and Administration shall not allow the Arkansas Student Loan Authority, the Student Loan Guarantee Foundation of Arkansas, the Department of Higher Education, or any Arkansas public institution of higher education to examine the tax return;

(10) (A) In order to ensure proper payment to vendors by all agencies of state government or by county governments or city governments, information about the receipt or nonreceipt of sales tax permits by vendors must be made available by the Director of the Department of Finance and Administration upon request by these agencies of state government or by county governments or city governments.

(B) Therefore, notwithstanding any provision of this chapter or any other law to the contrary, in instances when state agencies, boards, commissions, and other branches of state government or county governments or city governments identify to the Director of the Department of Finance and Administration the identity of vendors receiving payments and ask the Director of the Department of Finance and Administration whether these vendors have been issued sales tax permits, the Director of the Department of Finance and Administration shall answer these inquiries;

(11) Disclosure of the name of any taxpayer and the amount of any tax credit, tax rebate, tax discount, or commission for the collection of a tax received by such taxpayer from the following tax incentive provisions:

(A) Discount for prompt payment, § 26-52-503;

(B) Economic Investment Tax Credit Act, § 26-52-701 et seq.;

(C) Steel mill tax incentives, §§ 26-52-901 -- 26-52-903 and 26-52-912 -- 26-52-914;

(D) Motor fuel shrinkage allowance, § 26-55-230(a)(1)(F);

(E) Commission for sale of stamps for cigarettes and the collection of cigarette taxes, § 26-57-236(f);

(F) Credit on severance tax of oil producer, § 26-58-204;

(G) Credit on severance tax of gas producer, § 26-58-205;

(H) Refund of motor fuel tax by municipal buses, § 26-55-401 et seq.;

(I) Refund of distillate special fuel tax to interstate users, §§ 26-56-214 and 26-56-215;

(J) Credit against severance tax for the discovery of a commercial oil pool, § 15-72-706;

(K) Native wines -- Subsidies, § 3-5-1001 et seq.;

(L) Native wines -- Incentive grants, § 3-5-901 et seq.;

(M) Consolidated Incentive Act of 2003, § 15-4-2701 et seq.; and

(N) (i) Any other tax incentive program enacted after January 1, 1991, that provides a tax credit, tax rebate, tax discount, or commission for the collection of a tax, with the exception of any benefits under the income tax laws of this state.

(ii) However, information that is subject to disclosure under the provisions of this subdivision (b)(11) shall not be disclosed if such information would give an advantage to competitors or bidders or if such information is exempt from disclosure under any other provision of law that exempts specified information from disclosure under any such law;

(12) Disclosure of the lists required by:

(A) Section 3-2-205(e)(4), reporting to the Alcoholic Beverage Control Division of the Department of Finance and Administration and the Alcoholic Beverage Control Board those taxpayers who hold a permit to sell alcoholic beverages and who are delinquent in state taxes; and

(B) Section 26-57-257(q)(2), reporting to the Arkansas Tobacco Control Board those taxpayers who hold a permit to sell tobacco products and cigarettes and who are delinquent in state taxes;

(13) Disclosure to the Tax Division of the Arkansas Public Service Commission of information contained in motor fuel tax records necessary to assess motor carrier companies for ad valorem taxation;

(14) (A) Disclosure of the following information from corporate franchise tax reports:

(i) The name and address of the corporation;

(ii) The name of the corporation's president, vice president, secretary, treasurer, and controller;

(iii) The total authorized capital stock with par value;

(iv) The total issued and outstanding capital stock with par value; and

(v) The state of incorporation.

(B) In the case of a franchise tax report filed by an organization formed under the Small Business Entity Tax Pass Through Act, § 4-32-101 et seq., the confidentiality provision of subsection (a) of this section shall apply to the names of members of the organization, except those designated in the organization's franchise tax report as a manager, president, vice president, secretary, treasurer, or controller of the organization, unless the organization has no registered agent for service of process, in which case the confidentiality provisions of subsection (a) of this section shall not apply;

(15) Disclosure compelled by a subpoena issued by a state or federal prosecutor or grand jury or other state or federal entity with subpoena power;

(16) (A) Disclosure to county assessors of information that may affect personal property tax assessments, including information obtained during the course of audits or investigations concerning motor vehicles, boats, trailers, airplanes, or other items of personal property that may be subject to assessment in that county.

(B) This information may be released only following completion of an audit or investigation by the Director of the Department of Finance and Administration and following a determination by the Director of the Department of Finance and Administration that there is a strong possibility the taxpayer has failed to properly assess the taxpayer's personal property in the county.

(C) In providing this information, the Director of the Department of Finance and Administration shall not allow the county assessors to examine any tax returns or audit records;

(17) Disclosure to a capital development company organized under the Arkansas Capital Development Company Act, § 15-4-1001 et seq., of the name and tax identification number of and amount of any tax credit received by a taxpayer as a result of the purchase of an equity interest in a capital development company;

(18) (A) For the purpose of the timely and accurate collection of local sales and use tax and state income tax withholding for employees, disclosure of the name and address of a taxpayer that has failed three (3) times within any consecutive twenty-four-month period to either report or remit state or local gross receipts or compensating use tax or state income tax withholding for employees and has been served with a business closure order under § 26-18-1001 et seq.

(B) Disclosure shall be made by posting weekly on the website maintained by the Department of Finance and Administration the business name, business address, and city and county in which the business is located as it appears on the sales tax permit or the state income tax withholding for employees registration of each taxpayer identified in subdivision (b)(18)(A) of this section.

(C) The information posted on the website for a taxpayer shall remain on the website until that taxpayer is no longer subject to the business closure provisions of § 26-18-1001 et seq.;

(19) (A) Disclosure to the Arkansas Economic Development Commission of any information requested regarding a tax incentive program that provides a tax credit, tax rebate, tax discount, or other economic incentive that is jointly administered by the Arkansas Economic Development Commission and the Department of Finance and Administration.

(B) Any information received by the Arkansas Economic Development Commission under this section shall remain confidential and is not subject to disclosure except in accordance with this section;

(20) Disclosure to the office of a standing Chapter 13 bankruptcy trustee, upon the request of the trustee, whether or not a taxpayer filed a state tax return for all taxable periods ending during the four-year period ending on the date of the filing of a petition for relief under Chapter 13 of Title 11 of the United States Code;

(21) (A) To perform audit and compliance duties, disclosure to the Department of Workforce Services of withholding tax information reported by companies doing business in Arkansas, including without limitation taxpayer names, taxpayer addresses, tax identification numbers, and tax withholding information.

(B) Information received by the Department of Workforce Services under this section shall remain confidential and is not subject to disclosure except in accordance with this section;

(22) Disclosure of information, including disclosure as required under § 26-55-232, regarding delinquent motor fuel excise tax levied by the Motor Fuel Tax Law, § 26-55-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-55-222 for the taxpayer that owes the delinquent tax;

(23) Disclosure of information regarding delinquent distillate special fuel tax levied by § 26-56-201 et seq., and by § 26-56-601 et seq., to a bonding company that provides the surety bond required by § 26-56-204 for the taxpayer that owes the delinquent tax;

(24) Disclosure of information regarding delinquent liquefied gas special fuel tax levied by § 26-56-301 et seq. and by § 26-56-601 et seq. to a bonding company that provides the surety bond required by § 26-56-303 for the taxpayer that owes the delinquent tax; and

(25) (A) Disclosure of information in the books of the Department of Finance and Administration concerning a taxpayer by the Department of Finance and Administration to a joint auditor employed under the authority of § 26-75-619 when the joint auditor requests the information.

(B) Information received by the joint auditor under subdivision (b)(25)(A) of this section shall remain confidential and is not subject to disclosure except in accordance with this section.

(c) The provisions of this section shall be strictly interpreted and shall not permit any other disclosure of tax information concerning a taxpayer, whether the taxpayer is an individual, a corporation, a partnership, or a fiduciary, that is contained in the records and files of the Director of the Department of Finance and Administration relating to income tax or any other state tax administered under this chapter.

(d) (1) Any person who knowingly discloses information in violation of a provision of this section shall be guilty of a Class A misdemeanor.

(2) An employee of the state who is convicted of violating a provision of this section shall be discharged from employment in addition to any fine or imprisonment.

(e) Any person who knowingly obtains or attempts to obtain any of the confidential and privileged records and files of the Director of the Department of Finance and Administration who is not so permitted by law is guilty of a Class A misdemeanor.

(f) The Director of the Department of Finance and Administration shall report all violations of this section to the appropriate prosecuting attorney in this state.

(g) (1) The Director of the Department of Finance and Administration shall promulgate such regulations as are necessary to establish a reasonable procedure for making requests for and release of information under subdivision (b)(11) of this section, for allowing a taxpayer reasonable notice in advance of the release of the requested information, for a period of time up to seven (7) days from the date a request for information is made to provide notice and make necessary determinations, and to provide the methods by which the Director of the Department of Finance and Administration shall determine if the information requested is subject to disclosure under Arkansas law.

(2) The provisions of this section shall solely govern the release of information under subdivision (b)(11) of this section, and the release of information shall not be subject to the Freedom of Information Act of 1967, § 25-19-101 et seq.

(h) (1) Upon the request of a county government or a city government, the Director of the Department of Finance and Administration shall provide a list of vendors within the requesting county or city who hold permits issued pursuant to the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq.

(2) Requests made pursuant to this subsection must be made in writing by an official of the county government or city government prior to August 1 of the calendar year for which the list is requested.

(3) Lists provided pursuant to the provisions of this subsection will be made available following October 1 of the year requested and will be compiled from the list of all valid sales tax permit holders within the requesting county or city as of September 1 of the year requested.

(4) (A) A reasonable fee based upon the number of permit holders within the requesting city or county may be charged for the permit search made and reported to the requesting county or city government.

(B) Fees collected under the provisions of this subsection shall be deposited into the State Central Services Fund to be treated as a refund of expenditures to reimburse the Department of Finance and Administration for the costs of providing the requested information.

(i) (1) The Director of the Department of Finance and Administration may disclose information from a return filed by a person, partnership, corporation, trust, or estate to any of the parties who signed the return:

(A) Who is the administrator, executor, or trustee of the estate filing the return;

(B) Who was a member of the partnership filing the return during any part of the period covered by the return;

(C) Who is a trustee or beneficiary of the trust filing the return;

(D) Who is an officer or bona fide shareholder of record owning one percent (1%) or more of the outstanding stock of the corporation filing the return;

(E) Who was a shareholder during any part of the period covered by the return filed by a Subchapter S corporation;

(F) Who was a member of the partnership during any part of the period covered by the partnership return; or

(G) Who is the attorney in fact duly authorized in writing by any of the persons described in subdivisions (i)(1)(A)-(F) of this section.

(2) The Director of the Department of Finance and Administration may also disclose all information concerning the collection activity related to a tax return to any party who signed the return.

(3) The Director of the Department of Finance and Administration shall promulgate such regulations as are necessary to establish a reasonable procedure for making requests for and for the release of information under this section.

(j) (1) The General Assembly finds that:

(A) The collection of cigarette and other tobacco products taxes and the enforcement of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., §§ 26-57-260 and 26-57-261, and §§ 26-57-1301 -- 26-57-1307, effect the fiscal soundness of the state and the public health;

(B) The Attorney General and the Director of Arkansas Tobacco Control play an important role in the enforcement of the state's tobacco laws; and

(C) The sharing of documents and other information between the Director of the Department of Finance and Administration, the Attorney General, and the Director of Arkansas Tobacco Control will put the state in a better position to prevent tobacco diversion and prevent cigarettes from being sold to youth and an already addicted adult population.

(2) The Director of the Department of Finance and Administration may disclose documents and other information submitted by stamp deputies appointed under § 26-57-236 or those persons licensed or permitted under the terms of the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq., to the Attorney General or the Director of Arkansas Tobacco Control upon the request of the Attorney General or the Director of Arkansas Tobacco Control.

(3) (A) The documents and other information provided under this subsection shall not be disclosed by the Attorney General or the Director of Arkansas Tobacco Control to a person other than a person specifically authorized by the Attorney General or the Director of Arkansas Tobacco Control to receive the documents or other information.

(B) However, the Attorney General and the Director of Arkansas Tobacco Control may share the documents and other information provided under this subsection with the taxing authorities or law enforcement agencies of Arkansas or another state or with any other entity permitted by the Attorney General to aggregate the documents and other information, if the parties agree to the confidentiality requirements under this subsection.

(4) (A) The Attorney General and the Director of Arkansas Tobacco Control may use the documents and other information provided under this subsection by the Director of the Department of Finance and Administration in proceedings before any court.

(B) (i) However, the documents and other information shall not be presented in court except with the approval of the court in which the action is pending and after adequate notice to the person who initially furnished the documents or other information to the Director of the Department of Finance and Administration.

(ii) When confidential information is presented with court approval, the documents and other information and the related evidence shall be held in camera and shall be part of the court record or trial transcript only if under seal.

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Last modified: November 15, 2016