Exemptions from tax — Foodstuffs sold to governmental agencies and nonprofit food distribution agencies

(a)(1) The gross receipts or gross proceeds derived from the sale of food or food ingredients or prepared food to governmental agencies for free distribution to any public, penal, or eleemosynary institution or for free distribution to poor and needy individuals are exempt from the tax.

(2) The gross receipts or gross proceeds derived from the sale of food or food ingredients to nonprofit agencies organized under the Arkansas Nonprofit Corporation Act, Arkansas Code § 4-28-201 et seq., for free distribution to the poor and needy are exempt from gross receipts tax.

# (b) Definitions

(b) Definitions. As used in this section:

(1) “Eleemosynary institution” means any charitable and nonprofit organization that is operated primarily for the benefit of the economically disadvantaged;

(2) “Free distribution” means that no consideration is required prior to, subsequent to, or at the time of distribution;
(3)(A) “Governmental agencies” means any agency or department of the United States, the State of Arkansas, counties, cities, towns, or school districts.

(B) Government agencies do not include a private nonprofit organization funded wholly or in part by public monies;

(4) “Poor and needy” means individuals who are economically disadvantaged (e.g., individuals who receive little or no income in any form or fashion); and

(5) “Public institution” means any institution operated or managed by a governmental agency or supported in whole or substantial part by public funds for the benefit of the economically disadvantaged.