HB1206 Summary

• Amends Arkansas Code § 26-52-301(7) to clarify sales tax treatment of service contracts, maintenance agreements, and extended warranties that provide for future performance of services subject to gross receipts tax

• Sellers must collect and remit gross receipts tax on contract sales, except when contracts are sold simultaneously with motor vehicles, in which case the purchaser pays tax at vehicle registration

• Exempts trade service fees or deductibles from gross receipts tax, regardless of collection method, when charged pursuant to a taxable service contract

• Effective date is the first day of the calendar quarter following enactment of the legislation