Arkansas Sales Tax Nexus

Businesses with nexus in Arkansas are required to register with the Arkansas Department of Finance and Administration and to charge, collect, and remit the appropriate tax.

Generally, a business has  nexus in Arkansas when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.

Arkansas nexus for out-of-state sellers

Affiliate nexus

If your business has ties to businesses in Arkansas, including affiliates, it may have nexus under the state’s affiliate nexus law (Act 1001).

Out-of-state sellers of tangible personal property or taxable services are presumed to be engaged in business in the state and must register and collect and remit Arkansas sales tax when any one of the following applies:

  • The seller sells a similar line of products as the affiliated person under the same or a similar business name
  • An affiliated person uses in-state employees or facilities to advertise, facilitate, or promote sales in the state
  • An affiliated person maintains an office, distribution facility, warehouse, storage place, or similar place of business to facilitate the delivery of property or services sold by the seller to consumers in the state
  • An affiliated person uses trademarks, service marks, or trade names in the state that are substantially similar or the same as those used by the seller
  • An affiliated person delivers, installs, assembles, or performs maintenance services for the seller’s purchasers within the state

Click-through nexus

Referrals, including online referrals, from in-state entities may also trigger nexus for an out-of-state business if both the following conditions are met:

  • The out-of-state seller enters into an agreement with one or more residents whereby the residents, for a commission or other consideration, directly or indirectly refer potential purchasers to the seller, by a link on an internet website or otherwise.
  • Cumulative gross receipts from sales by the seller to purchasers in Arkansas who are referred to the seller by such agreements exceeds $10,000 during the preceding 12 months.

See AR Code § 26-52-117 (2012), Act 1001, and the Arkansas Department of Finance and Administration (DFA) Nexus Questionnaire.