Arkansas has taken steps to streamline the sales and use tax exemption process for farmers. With the passage of Act 621 (H.B. 1594), the state will now issue a Farmer Sales Tax Identification Card, which farmers can present in lieu of a traditional exemption certificate when making qualifying purchases.
This new initiative is designed to simplify tax compliance for farmers and ensure consistent application of exemptions across the state.
Eligibility Requirements
To obtain the Farmer Sales Tax Identification Card, an individual or entity must meet the following criteria:
- Be actively engaged in farming activities,
- Demonstrate the capacity to produce food, fiber, grass sod, or nursery products in commercially marketable quantities, and
- Provide documentation such as a Schedule F (Form 1040), Form 1065, or another equivalent federal tax form showing farming activity for the most recent three-year period.
For new farmers with less than three years of experience, a detailed business plan may be submitted in place of prior tax documentation to demonstrate future production capability.
The card will be valid for eight years from the date of issuance. The fee is $20 for a new card and $10 for renewals.
How Thompson Tax Can Help
At Thompson Tax, we understand that navigating exemption rules and documentation requirements can be challenging, especially for busy farmers. Our expert team is here to support you with:
- Eligibility assessments to determine whether you or your business qualify under the new law,
- Application assistance, including gathering and submitting the necessary supporting documentation,
- Strategic guidance for new farmers, including the development and review of business plans, and
- Ongoing compliance support, ensuring you are prepared for audits, renewals, and any changes in state tax regulations.
We’re here to help you maximize your exemption benefits and guide you through every step of the process.
Contact Thompson Tax today, your Trusted Tax Advisors for all of your sales and use tax needs.