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Who Must Pay By EFT?

Ark. Code Ann. § 26-19-101 et seq. requires that taxpayers with an average total tax liability of $20,000 or greater per month or per quarter (according to the type of tax) must remit their tax payments by an electronic method. Taxpayers that are required to remit tax payments by EFT (Electronic Funds Transfer) are selected by the Department of Finance and Administration by a computer review process in October prior to the year they are required to remit payments by EFT. The following criteria, as prescribed in Ark. Code Ann. § 26-19-101 et seq. is applied during the review process. 

If the director of the Department of Finance and Administration determines that a corporation's estimated quarterly state income tax liability under § 26-51-911 et seq. equals or exceeds twenty thousand dollars ($20,000), the corporation shall pay the quarterly income taxes due by EFT.  If the Director of the Department of Finance and Administration determines that a taxpayer's monthly liability for the following taxes for fiscal year equals or exceeds twenty thousand dollars ($20,000), the taxpayer shall pay any tax due by EFT:

• Income withholding taxes under the Arkansas Income Tax Withholding Act of 1965, § 26-51-901 et seq.
• Gross receipts or sales taxes under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., §§ 26-74-201 — 26-75-705, or the Local Government Bond Act of 1985, § 14-164-301 et seq.;
• Compensating or use taxes under the Arkansas Compensating Tax Act of 1949, § 26-53-101 et
• Privilege taxes
• Special alcoholic beverage excise taxes under § 3-7-201;
• Alcoholic beverage supplemental taxes under §§ 3-9-213 and 3-9-223; and
• Any other taxes supplemental to the taxes in subdivisions (a)(1)(A)-(F) of this section or required to be collected and remitted in the same manner as sales or use taxes or any other law of this state.
• Taxes on tobacco products under the Arkansas Tobacco Products Tax Act of 1977, § 26-57-201 et seq.
• Severance taxes under §§ 26-58-101 — 26-58-303; or
• Taxes on spirituous liquors, wines, malt liquors, and beer under §§ 3-5-101 — 3-7-114.
• Soft drink taxes under the Arkansas Soft Drink Tax Act, § 26-57-901 et seq.

Prepayment(s)
Ark. Code Ann. § 26-52-512 requires that all businesses in Arkansas with average net sales of $200,000.00 or more per month must make prepayments of their Sales Tax and Vender Use tax.  Act 1142 requires out-of-state sellers with taxable sales averaging more than $200,000 per month to begin making prepayments equal to 80% of the monthly state liability twice each month beginning January 1, 2012.  Ark Code Ann. §26-52-512 also requires that prepayments must be paid by electronic funds transfer (EFT).

EFT/Prepayment(s) Penalties
Failure to pay tax by EFT as required will result in a 5% penalty of the amount of taxes due. Failure to prepay your sales or use tax as required will result in a 5% penalty and loss of discount, if applicable, for each occurrence. Act 665 requires that prepayments must be paid by electronic fund transfer (EFT). Failure to EFT your prepayments will result in a 5% penalty for each occurrence.

For more information and instructions detailing the EFT payment methods and electronic filing options offered by Arkansas click on the link Electronic Filing/Payment Options. Contact the individual tax units for information concerning filing requirements, due dates, and tax procedures or visit the Department of Finance and Administration’s web site at www.dfa.arkansas.gov.

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