AR HB1031

Repeals Arkansas Code § 26-52-319, which previously imposed a reduced excise tax rate (3.125% as of July 1, 2009) on natural gas and electricity sold to manufacturers for direct use in manufacturing.

Repeals Arkansas Code § 26-53-148, which previously imposed a reduced excise tax rate (3.125% as of July 1, 2009) on natural gas and electricity purchased by manufacturers for direct use in manufacturing.

Creates a new sales and use tax exemption for natural gas and electricity used directly in the actual manufacturing process by manufacturers classified in sectors 31-33 of the North American Industry Classification System.

Requires natural gas and electricity qualifying for the exemption to be separately metered from utilities used for other purposes, and allows the Director of Finance and Administration to require manufacturer certificates before exemption applies.

Declares an emergency effective July 1, 2011, citing high unemployment and economic hardship affecting manufacturers, asserting that the utility tax exemption would help manufacturers increase employment and production.