The Arkansas Department of Finance and Administration recently reaffirmed in a letter ruling that sales of puppies are taxable. The taxpayer made eleven separate sales of puppies from 2017 through 2019. The taxpayer's dog had one litter per year, and the taxpayer sold only one litter per year. The taxpayer sold the puppies under an alias, advertised the sale of the puppies on her website and other social media platforms, and entered into sales contracts with customers.
Arkansas taxes the sale of tangible personal property unless an exemption applies. Puppies qualify as tangible personal property and there is no exemption for the sale of puppies. In finding that tax applied, it was determined that the taxpayer was making regular rather than occasional sales, the taxpayer used a website, and the taxpayer used advertisements. On this basis, the Department found that the taxpayer was "engaged in business" in the state and was making taxable sales.