- Arkansas Supreme Court opinion states that withdrawal of inventory for use can trigger sales tax liability
- Businesses must be aware of rules in state where inventory is located to avoid unintentional tax obligations
- Aprio’s State and Local Tax team can help businesses understand exempt inventory withdrawals to avoid unexpected liabilities
- Sales tax not imposed on items purchased for resale and placed in inventory
- State rules restrict when items can be withdrawn from inventory for use without tax payment
- Recent Arkansas Supreme Court case involved an automobile dealership and unauthorized use of dealer tags triggering sales tax assessment
- Arkansas sales tax statutes levy taxes on withdrawal from stock, defined as use of goods from inventory for consumption or use
- Court rejected taxpayer’s arguments that items must be permanently withdrawn from inventory for tax liability to apply
Source: aprio.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
