Arkansas Gift Store Owed Tax on Wrapping Paper and Bags

Thursday, March 24th, 2016

 
 
A wrapping paper station.
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Arkansas
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The Arkansas Department of Finance and Administration ("Department") ruled that a gift store owed tax on wrapping materials.

The taxpayer was a gift store that sold jewelry, watches, and other gifts. It purchased bags, wrapping paper, tissue paper, ribbon, jewelry pads, risers, and liners. It used these items to wrap and package the gifts its customers bought.

Arkansas does not tax items purchased for resale in the regular course of business. However, the Department ruled that the gift store did not resell the wrapping materials. The store did not charge separately for the materials. It also did not allocate the cost of materials to certain items of merchandise. As a result, the store used the materials - it did not resell them.

https://www.ark.org/dfa-act896/index.php/api/document/download/16-014.pdf


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