AR: Sales and Use Tax: Seller Failed to Collect and Remit Tax on Aircraft Sale
Arkansas: A taxpayer was properly subject to Arkansas sales and use tax on the sale of an aircraft because the taxpayer failed to collect the tax from the purchaser and remit it to the Department of Treasury and Administration. The department found that although the aircraft purchase agreement specified that the buyer was responsible for paying the tax, the taxpayer did not collect it at the time of sale. The taxpayer argued that the buyer was required to pay the tax directly to the Department of Finance and Administration. Arkansas generally requires sellers to collect and remit sales tax on aircraft sales; However, a seller may be relieved of this responsibility if a customer requests an exemption. The Hearings and Appeals Board determined although the taxpayer had entered into a contract with the buyer to pay the taxes, the Department was not a party to this agreement and was not bound by it. Therefore, the Department of Finance and Administration correctly assessed the tax on the transaction, as the taxpayer remains responsible for collecting and remitting the tax.
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