State & Local Tax Impacts of COVID-19 for Arkansas – 2020

Thoughtware Alert Published: Dec 11, 2020 | Updated: May 05, 2021
SALT GOV COVID TW - 1

Information current as of December 31, 2020.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Arkansas

  • Arkansas is providing an automatic extension for the filing and payment date to July 15 from April 15 for 2019 individual income, subchapter S corporation, fiduciary and estate, partnership and composite returns and taxes.
    • Governor’s Executive Order No. 20-09, March 23, 2020.
  • Arkansas is waiving late fees and interest charges on annual franchise taxes until July 15. The filing deadline for annual franchise taxes is May 1, and companies filing late would generally be charged a $25 late fee plus 0.000274 percent interest for each day that the payment is delinquent.
    • Arkansas Secretary of State Announcement, March 26, 2020.
  • Arkansas announced the extension of the individual income, subchapter S corp, fiduciary and estate, partnership income and composite returns and taxes tax filing and payment deadlines to July 15 and waiving associated penalties and interest due to COVID-19. The extension is only for individual income and trust income taxes and doesn’t affect 2019 corporation income tax, 2020 estimated tax payments, sales and use tax, withholding tax, motor fuel tax, tobacco products tax, and alcohol excise tax.
  • The penalty for the late registration of motor vehicles is suspended until April 16 and doesn’t impact any statute, rule, or law requiring payment of sales or use tax, including any assessed penalty or interest on the tax owed, on a vehicle purchase or payment of any registration or other fee.
    • Arkansas DOR Notice, March 27, 2020.
  • Arkansas determined that an airline’s storage of aircraft in Arkansas until the resumption of normal air traffic demand won’t result in the imposition of Arkansas use tax on that aircraft. In addition, the removal of the aircraft from Arkansas for use in interstate or international air transportation of passengers or freight won’t be an "initial use" in this state that would subject the aircraft to Arkansas sales or use tax, and the performance of maintenance or repair services to the stored aircraft located won’t subject the aircraft to tax.
    • Arkansas DOR Opinion No. 20200415, April 28, 2020.
  • Arkansas determined that services used to disinfect a business, home, or community space from COVID-19 are taxable cleaning services and that general cleaning services don't meet the narrow exemption for services performed to clean or sanitize food processing facilities in accordance with specific sanitization standards.
    • Arkansas DOR Opinion No. 20200327, June 11, 2020.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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