United States

Arkansas: Recently Enacted Legislation Revises Taxation of Digital Goods, Candy, and Soft Drinks

Feb 20, 2017
From KPMG TaxWatch

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Arkansas House Bill 1162, which has been signed into law by Governor Asa Hutchinson, expands the state’s sales tax base to include certain specified digital products and digital codes. “Specified digital products” means digital audio works, digital audio-visual works, and digital books transferred electronically. “Digital codes” are codes that provide a purchaser with a right to obtain one or more specified digital products. The bill makes a number of changes to Arkansas’ tax laws to reflect that sales of digital products and codes will be subject to sales and use tax effective January 1, 2018. The bill also defines candy and soft drinks and revises the law to eliminate candy and soft drinks from the definition of “food and food ingredients.” Thus, also effective January 1, 2018, candy and soft drinks will be taxed at the regular sales and use tax rate, rather than the reduced rate that applies to food and food ingredients. Please stay tuned to TWIST for future legislative updates.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.