DFA Updated COVID-19 FAQ Advises Taxability of Arkansas Ready for Business Grants

The Arkansas Department of Finance and Administration (DFA) has updated its "Frequently Asked Questions Regarding the Impact of Coronavirus (COVID-19)" (rev. Sept. 18, 2020) to specify that receipt of an Arkansas Ready for Business grant is taxable income for Arkansas income tax purposes that generally will be offset by expense deductions for purchases under the program. This guidance seems correct given the legal framework of Arkansas income tax, although it conceivably could be changed by legislation in the upcoming legislative session. (And regardless of what the Arkansas General Assembly does, it would also seem to be required for federal income tax purposes.) [More]

Arkansas COVID-19 guidance on estimated payments and nontaxability of Recovery Rebates; possible exemption for agricultural Market Facilitation Payments

There are handful of updates since our detailed coverage of Arkansas tax filing and payment extensions associated with COVID-19: (1) 2020 Q1 Arkansas income tax estimated payment guidance, (2) nontaxability of IRS stimulus checks; and (3) possible exemption from income tax of USDA Market Facilitation Program payments. [More]

Arkansas COVID-19 Tax Extensions - Individuals & Passthroughs Delayed; Corporations Not (Except for Franchise Tax)

So far Arkansas is taking a limited approach to tax deadline extensions compared with other states, with the relief focused on individuals and small businesses:
- 2019 individual, passthrough, and fiduciary/estate income tax returns and payments extended to July 15.
- 2019 corporate income tax returns not extended.
- 2020 income tax estimated payments not extended (including estimated payments for individuals).
- Sales tax or excise tax reporting and payment deadlines not extended.
- Franchise tax late payment penalties and interest waived if filed and paid by July 15.
- Property tax payment deadline of October 15 and personal property rendition due May 31 have not been extended. [More]

Is COVID-19 Sterilization a Taxable Service in Arkansas?

With the demand for COVID decontamination on the upswing, businesses providing COVID-19 cleaning or sterilization services in Arkansas should consider the sales taxability of such services. Arkansas taxes cleaning and janitorial services. Ark. Code Ann. § 26-52-301(3)(D)(i)(b); Gross Receipts Tax Rule GR-9.4. DFA's applied interpretation of cleaning is sometimes broader than ordinary janitorial services; for example providers of industrial cleanup services may be surprised to see DFA take the position that such services are taxable. [More]