Services subject to tax — Utilities — Public services

(a)(1) All sales of natural or artificial gas, electricity, water, ice, steam, or any other utility or public service are subject to gross receipts tax except for transportation services and sewer services.

(2) The tax should be collected and remitted by the seller of such services.

(3) See also 26 CAR § 30-1107.

# (b) Low-income residential utility customer tax exemption

(b) Low-income residential utility customer tax exemption.

# (1) Definitions

(1) Definitions. As used in this section:

(A) “Electric utility” means any:

(i) Electric utility;

(ii) Cooperative corporation created or existing under the authority of Arkansas Code § 23-18-301 et seq.; or

(iii) Municipally owned electric utility;

(B) “Household” means an individual and, if applicable, his or her spouse;

(C) “Household income” means the combined income received by members of a household during a calendar year; and (D)(i) “Income” means gross income less deductions allowed by law for expenses.

(ii) It shall also include:

(a) Alimony;

(b) Support money;

(c) Cash public assistance and relief;

(d) The gross amount of any pension or annuity (including all monetary retirement benefits from whatever source derived, including but not limited to railroad retirement benefits, all payments received under the federal Social Security Act, and veterans’ disability pensions);

(e) All dividends and interest from whatever source derived not included in gross income;

(f) Workers’ compensation; and

(g) The gross amount of “loss of time insurance”.

(iii) Provided, however, the term “income” shall not include gifts from nongovernmental sources, or surplus food or other relief in kind supplied by a governmental agency.

(iv) In the case of a claimant who is a World War I veteran or the widow of such veteran, the term “income” shall not include federal and/or state retirement, pension, disability, railroad retirement, or Social Security benefits.
(2)(A) The sale of the first five hundred (500) kilowatt hours of electricity per month to each residential customer whose household income does not exceed twelve thousand dollars ($12,000) per year shall be exempt from the gross receipts tax and all other state excise taxes that would otherwise be levied thereon.

(B) The total franchise taxes billed to each residential customer whose household income does not exceed twelve thousand dollars ($12,000) per year shall be exempt from the gross receipts tax and all other state excise taxes that would otherwise be levied thereon.

(3) The exemption provided herein shall apply to sales by all electric utilities operating in the State of Arkansas.
(4)(A) Customers qualifying for the exemption provided herein shall notify the electric utility providing service to them of their intent to claim the exemption on forms provided by the Commissioner of Revenue.

(B) The exemption must be claimed by March 1 of the year following the year in which the customer’s income did not exceed twelve thousand dollars ($12,000).

(C) Once the exemption is claimed, no further application is required.

(D) The exemption continues from year to year until the customer becomes disqualified.
(5)(A) A customer becomes disqualified for the exemption when the customer’s household income for a calendar year exceeds twelve thousand dollars ($12,000).

(B) The customer must notify the electric utility of their ineligibility on or before March 1 of the year following the year during which the household income exceeded twelve thousand dollars ($12,000).

(C) This notification must be made on forms provided by the commissioner.

(6) Any customer who fails to notify the electric utility of their ineligibility and continues to benefit from the tax exemption shall be liable for the amount of the tax exemption received after March 1 of the year during which notice of ineligibility should have been given.

(7) Customers who change electric utilities must notify the new electric utility of their intent to claim the exemption provided herein by submitting to the new utility another claim form provided by the commissioner.

(8) When submitting the claim form for the purpose of claiming this exemption, the income listed shall be that which was received by the customer’s household during the preceding calendar year.
(9)(A) The claim forms may be obtained directly from the commissioner upon request, and supplies of the forms will also be furnished to the electric utility companies.

(B) The electric utility companies are authorized to make copies of the forms to furnish to their customers.

(10) Every electric utility shall, on each sales tax report that it submits to the Department of Finance and Administration, indicate the amount of exemptions provided its customers hereunder in the space designated “Other Legal Deductions” on such sales tax report.
(11)(A) Every electric utility shall keep and maintain all claim forms submitted by customers claiming the exemption provided herein and shall make the same available for examination by the secretary.

(B) Such records shall be:

(i) Preserved for a period of three (3) years; and

(ii) Open to examination by the commissioner at any reasonable time.