Do contractors charge sales tax in Arkansas?

It depends on the work. Arkansas contractors pay tax on materials, but installing or repairing listed items in an existing building is taxed.

Arkansas treats all contractors as consumers of the tangible personal property they buy, and they pay tax at purchase. Materials used in a nontaxable service are not taxed to the customer.

Installing, repairing and replacing listed items, such as flooring, electrical devices and machinery, are taxable services even when the items are affixed to real property. An initial installation in an existing building is taxable, and so are the parts installed. The same installation in new construction is not taxable. Materials used in a taxable service are taxed to the customer.

Landscaping of residential and nonresidential property, and lawn care of nonresidential property, are taxable on the total contract, plants included. Pest control, janitorial and cleaning work, parking lot and gutter cleaning, alarm monitoring and locksmith services are also taxable services.

The state rate is 6.5%.

It turns on: whether the building is new construction or an existing building; whether the work is a listed taxable service, such as flooring or electrical installation; for lawn care, whether the property is residential or nonresidential.

“Initial installation in an existing building is taxable.”26 CAR § 30-519