Arkansas economic nexus threshold

Affiliate nexus

Arkansas formerly recognized affiliate nexus under ACA § 26-52-110. That provision was explicitly repealed effective July 1, 2019, the same date economic nexus took effect under Act 822 of 2019 (SB 576). The Arkansas Department of Finance and Administration's fiscal analysis stated the affiliate nexus provisions were "likely no longer needed" with economic nexus in place. There is no affiliate nexus law currently in effect in Arkansas for sales tax purposes.

Physical nexus

Arkansas physical nexus is governed by the "doing business" standard under ACA § 26-52-103 and the "regular and persistent" [](Arkansas DFA Gross Receipts Tax Rules GR-3 and GR-5)business activity test codified in Rules GR-3 and GR-5. Presence triggers include maintaining a store, salesroom, sample room, showroom, distribution center, warehouse, storage point, service center, factory, credit or collection office, administrative office, or research facility in the state. Employing or retaining any person in Arkansas, regardless of role, also establishes physical nexus, as does soliciting or generating sales while physically present, delivering goods in seller-owned vehicles, or storing seller-controlled inventory in a third-party warehouse where the seller directs the movement of that inventory. Third-party warehouse arrangements where the third party controls inventory movement do not create physical nexus, nor does attending a trade show without soliciting sales.

Trailing nexus

Arkansas has not published a formal trailing nexus regulation. For economic nexus, a seller that falls below both thresholds may cancel its registration, but cancellation must be formal and affirmative. There is no inactive status. For physical nexus, the "regularly and persistently pursued" language in Rule GR-3 implies nexus ceases once all physical activities legitimately terminate, but no fixed trailing period has been codified.