Arkansas – Reduced Rate for Natural Gas and Electricity

SALT Report 2408 – The Arkansas General Assembly passed a Bill that reduces the sales and use tax rate on natural gas and electricity used by manufacturers.

The rate reduction applies as follows:

  • Effective July 1, 2014, the sales and use tax rate on natural gas and electricity used directly by manufacturers in the manufacturing process will be reduced to 1%, and
  • Effective July 1, 2015, the rate will be reduced to 0%

Exclusions

Sales of natural gas and electricity to manufacturers will remain subject to the 0.125% excise tax rate as require by Amendment 75 to the Arkansas Constitution, and
Sales of natural gas and electricity to manufacturers will be subject to the temporary 0.5% excise tax under Amendment 91, which takes effect July 1, 2013

Electric Power Generators

Effective January 1, 2015, the sales and use tax rate on natural gas and electricity used in an electric power generator to operate a new or existing facility that uses combined-cycle gas turbine technology will be lowered to 1%. The current rate of 2.625% will be in effect until December 31, 2014.

For Further Information

Arkansas General Assembly – Senate Bill 791, Laws 2013

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