Arkansas Finance Department Determines Nonprofit Not Exempt From Sales and Use Tax as Charitable Organization

The Arkansas Department of Finance and Administration (DFA) Feb. 3 determined in a letter ruling that Taxpayer didn’t qualify for a sales and use tax exemption for charitable organizations. Taxpayer was a nonprofit organization exempt under IRC Section 501(c)(3) that engaged in projects related to historical preservation, children’s hospitals, and veterans. It inquired whether the exemption could apply with regard to a convention it was planning. The DFA responded that: 1) nonprofit organizations are not automatically charitable organizations for Arkansas sales and use tax purposes; and 2) Taxpayer was not a charitable organization because it didn’t perform a function that, ...