Arkansas to Start Taxing Digital Products and Increase Tax on Soft Drinks and Candy in 2018

Friday, February 10th, 2017

 
 
Image of a tablet nex to candy hearts and a lollipop.
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Arkansas
General

Arkansas recently passed a law that will tax digital movies, music, books, and some other digital products. The law will also change the sales tax so it applies to candy and soft drinks at the full rate. These changes take effect January 1, 2018.

Under current law, Arkansas does not tax digital products delivered electronically. Under the new law, Arkansas sales tax will apply to "specified digital products." These include digital movies, videos, music, and books. It will also tax sales of codes that users can redeem to purchase these items.

Under current law, Arkansas taxes candy and soft drinks at the reduced rate for food. Under the new law, candy and soft drinks will not qualify for the reduced rate. "Candy" includes sweetened bars, drops, or pieces that have chocolate, fruit, nuts, or flavorings. It does not include things with flour or things that need refrigeration. "Soft drinks" are sweetened, nonalcoholic beverages. They do not include drinks with more than 50% juice or any amount of milk.

http://www.arkleg.state.ar.us/assembly/2017/2017R/Bills/HB1162.pdf


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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at www.ttrus.com or call 866.578.8193.

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