Arkansas—Sales and Use Tax: Taxpayer Failed to File Returns to Report Taxable Photography Sales; Assessment Affirmed

ARKANSAS: A photography service provider (taxpayer) was liable for Arkansas sales and use tax assessed against her because she failed to timely file returns reporting taxable sales. In this matter, the Department of Finance and Administration (department) issued a notice assessing tax, penalty, and interest against the taxpayer as she failed to report taxable sales. However, the taxpayer protested stating that photography was her hobby and that very few people paid her for it. It was noted that the taxpayer provided taxable photography services for paying customers. Further, the taxpayer failed to maintain adequate records to support her argument. The handwritten customer list provided by the taxpayer was not supported by other documentation. Accordingly, the department’s approach of estimating the taxpayer’s sales from audits conducted on other photographers was reasonable. Lastly, the lack of knowledge of publicly available statutes cannot be used as a defense by the taxpayer. Accordingly, the assessment against the taxpayer was sustained in full.

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