Arkansas Code § 26-52-427 - Property Purchased for Use in Performance of Construction Contract

(a) A contractor that purchases tangible personal property which becomes a recognizable part of a completed structure or improvement to real property and which is purchased for use or consumption in the performance of construction contracts shall be entitled to a rebate on any additional gross receipts tax or compensating use tax levied by the state or any city or county if:

(1) The construction contract for which the tangible personal property was purchased is entered into prior to the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax; and

(2) The contractor paid the additional gross receipts or compensating use tax to the seller.

(b) As used in this section, "construction contract" means a contract to construct, manage, or supervise the construction, erection, or substantial modification of a building or other improvement or structure affixed to real property. "Construction contract" shall not mean a contract to produce tangible personal property.

(c) The rebate provided by this section shall apply to tangible personal property purchased within five (5) years from the effective date of the levy of the additional state, city, or county gross receipts tax or compensating use tax.

(d) The rebate provided by this section shall not apply to cost-plus contracts which allow the contractor to pass any additional tax on to the principal as a part of the contractor's costs.

(e) Interest shall not accrue or be paid on an amount subject to a claim for rebate pursuant to this section.

(f) The Director of the Department of Finance and Administration shall promulgate rules and prescribe forms for claiming a rebate as provided by this section.

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Last modified: November 15, 2016