Exemption

There is specifically exempted from the tax levied in the Arkansas Compensating Tax Act of 1949, Arkansas Code § 26-53-101 et seq., the following:

(1) All sales on which the Arkansas gross receipts tax is levied and all sales that are specifically exempted from taxation by the Arkansas Gross Receipts Act of 1941, Arkansas Code § 26-52-101 et seq.;
(2)(A) Aircraft, aircraft equipment, and railroad parts, cars, and equipment or tangible personal property owned or leased by aircraft, airmotive, or railroad companies brought into Arkansas solely and exclusively for:

(i) Refurbishing, conversion, or modification within Arkansas and is not used or intended for use in this state and such aircraft, aircraft equipment, and railroad parts, cars, and equipment or tangible personal property is removed from this state within sixty (60) days from the date of the completion of such refurbishing, conversion, or modification; or

(ii) Storage for use outside or inside Arkansas regardless of the length of time any such property is so stored in Arkansas.

(B) However, if any such property is subsequently initially used in Arkansas, the tax shall be applicable to the property so used in Arkansas.

# (C) Note

(C) Note. This does not exempt from taxation any materials used in the refurbishing, conversion, or modification of such property in Arkansas that are subject to the Arkansas Gross Receipts Act of 1941;
(3)(A) The gross receipts or gross proceeds derived from the sale or lease of railroad rolling stock manufactured for use in transporting persons or property in interstate commerce are exempt from the tax.

(B) For purposes of this section, “railroad rolling stock” means completed railroad locomotives and railroad cars designed to haul either passengers or freight, and includes repair parts and materials used to repair railroad locomotives and railroad cars.

(C) “Railroad rolling stock” does not include machinery used to repair or maintain:

(i) Railroad cars;

(ii) Locomotives;

(iii) Track;

(iv) Railroad ties; or

(v) Railroad roadway; and

(4) The gross receipts or gross proceeds derived from the sale of parts or labor used in the repair and maintenance of railroad parts, railroad cars, and equipment owned or leased by railroad companies and carriers are exempt from the tax.