Arkansas Sales Tax Farm machinery and equipment exemption all-terrain vehicles
The Arkansas Department of Finance and Administration Office of Hearings and Appeals determined that the taxpayer did not prove entitlement to the farm machinery and equipment exemption by a preponderance of the evidence for purchases of all-terrain vehicles (ATVs). Generally, the liability for collection and remittance of sales tax is on the seller unless the customer makes an exemption claim. Here, the Department demonstrated that the taxpayer made an exemption claim at the time of the purchase of the ATVs. Consequently, the liability for payment of sales tax on the purchase of the machinery or equipment shifted to the taxpayer. Furthermore, the taxpayer failed to prove by a preponderance of the evidence that the ATVs were used exclusively or directly in the production of food or fiber as a commercial business and that the relevant machinery or equipment was directly and exclusively utilized in that pursuit as required by Arkansas law. There were uncertainties presented in the record indicating that the ATVs’ uses were indirect uses in relation to a farming activity even though such activity may have been beneficial. The uncertainties presented by the current record prevented a finding that the taxpayer had proven entitlement to the farm machinery and equipment exemption by a preponderance of the evidence. (Arkansas Administrative Hearing Decision, Dkt. No. 23-151, 11/08/2022.)
Arkansas Sales Tax Farm machinery and equipment exemption all-terrain vehicles
