News and Insights

Arkansas Imposes Sales Tax on the Purchase of 911 Telecommunication Services

Tax Development Sep 06, 2016

The Arkansas Department of Finance and Administration released an opinion on purchases of 911 telecommunication services(Revenue Legal Counsel Opinion No. 20150509, Arkansas Department of Finance and Administration, August 31, 2016).

A regional planning commission of Texas purchased 911 telecommunication services from an organization in Arkansas. The purchases were considered taxable and not exempt from Arkansas sales and use tax even though the services were exempt in Texas. Purchases of telecommunication services sourced to Arkansas are taxable, unless Arkansas law exempts those purchases. Although there is an entity-based exemption for telephone cooperatives in Texas, there is no exemption in Arkansas that allows a taxpayer to purchase telecommunication services exempt from tax.