Manufacturers not taking advantage of sales tax break

Less than 20 percent of manufacturers in Arkansas are taking advantage of a sales tax reduction on natural gas and electric utility costs, according to figures from the Arkansas Department of Finance and Administration.

In the 2007 Arkansas General Assembly, legislators approved a bill that reduced the Arkansas sales and use tax rate on manufacturing utilities from 6% to 4.5% from July 1, 2007 through June 30, 2008 and to 4% on and after July 1, 2008, where it stands today.

Talk has been renewed to lower the tax further to help the ailing manufacturing sector in Arkansas. According to the latest statistics from the Arkansas Department of Workforce Services, the manufacturing sector has seen a decline of 5,600 jobs between November 2007 and November 2008.

However, only 656 manufacturers of the estimated 3,600 manufacturers in the state (estimate provided by the Arkansas Economic Development Commission) have requested the certificate required to take advantage of the sales tax reduction.

The real and estimated tax revenue decline from the program in the first year was $20.2 million, and could reach $30 million by the end of the second fiscal year of the program. State tax officials estimate that the remaining 4% sales tax generates about $60 million per fiscal year.

Link here for the full story at Roby Brock’s Talkbusiness.net.