Is a mandatory municipal solid waste collection fee subject to the Arkansas gross receipts tax?

Plain-English summary

State Representative DeAnn Vaught asked the AG whether mandatory municipal or county solid waste collection fees are subject to the Arkansas gross receipts tax for services under Ark. Code Ann. § 26-52-316(a)(2). DF&A's existing rule (GR-9.6(A)) said the gross receipts tax should be collected on the entire fee charged for solid waste collection and disposal, but the rule did not distinguish between mandatory fees imposed by city or county ordinance and voluntary fees.

AG Leslie Rutledge declined to answer. The opinion explains the institutional reason: under Gross Receipts Tax Regulation GR-75(E) (2008), only the Arkansas Department of Finance and Administration's Revenue Division can issue binding letter opinions on state sales tax law. AG opinions "are not binding on the Department," so a substantive AG opinion would not actually resolve the question. The proper channel is to submit the question directly to DF&A's Sales and Use Tax Division.

This is a useful procedural opinion for anyone with an Arkansas state tax interpretation question: the AG's office is not the forum.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why doesn't the AG opine on tax questions?

Because Arkansas DF&A regulations (GR-75(E)) place tax interpretation authority in DF&A's Revenue Division, and explicitly say opinions from any other agency are not binding on DF&A. An AG opinion on a sales tax question would have no operative effect: DF&A could ignore it, the parties would be no closer to certainty, and the AG would have spent resources to no clear end. So the AG defers.

Where do tax questions go instead?

The Arkansas Department of Finance and Administration, Sales and Use Tax Division, P.O. Box 1272, Little Rock, AR 72203-1272. They issue formal opinion letters that are binding on the agency. The opinion gives that mailing address explicitly.

What if you disagree with DF&A's interpretation?

You can challenge it in court. The opinion mentions "judicial remedies" as the next step if "a disagreement exists over the interpretation of the law by the Revenue Division." Tax appeals in Arkansas typically go through DF&A's internal hearing process first and then to circuit court.

Is this a common kind of declination?

Yes. The AG routinely declines to issue opinions on matters that are committed by statute or regulation to another agency's primary jurisdiction. State tax interpretations, election law disputes that belong with the Board of Election Commissioners, and certain personnel matters that go to the appropriate hearing officer all get redirected.

What was the underlying tax question Rep. Vaught was actually asking?

Whether a city ordinance saying every household must pay the city for trash collection makes the trash collection fee a "service" fee subject to gross receipts tax, even though the household has no choice but to pay. Voluntary subscription fees (where a household chooses among providers) are clearly taxable as service fees. Mandatory ordinance fees might be characterized differently because they look more like a tax than a service charge. DF&A's existing rule did not distinguish; the AG declined to write that distinction into law from the AG's office.

Background and statutory framework

• Ark. Code Ann. § 26-52-316(a)(2): the gross receipts tax for services, including solid waste collection.
• DF&A Gross Receipts Tax Regulation GR-9.6(A): historical rule addressing how the tax applies to solid waste collection fees.
• DF&A Gross Receipts Tax Regulation GR-75(E) (2008): provides that DF&A is the binding interpreter of state sales tax law and that AG opinions are not binding.

Citations

• Ark. Code Ann. § 26-52-316(a)(2) (gross receipts tax for services)
• Gross Receipts Tax Regulation GR-9.6(A) (DF&A rule on solid waste fee taxation)
• Gross Receipts Tax Regulation GR-75(E) (2008) (DF&A as exclusive tax interpreter)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2018-031
April 16, 2018
STATE OF ARKANSAS
ATTORN EY GENERAL
LESLI E RUTLEDGE
The Honorable DeAnn Vaught
State Representative
266 Dairy Road
Horatio, AR 71842-8904
Dear Representative Vaught:
This is in response to your request for my opinion concerning the solid waste gross
receipts tax under Ark. Code Ann. § 26-52-316(a)(2) (Supp. 2017). As
background for your question, you note that "section 26-52-316 does not
specifically address how the gross receipts tax may apply to a fee charged for the
service." You further report:
The Arkansas Department of Finance and Administration ("DF&A")
Rule GR-9.6(A) states that the gross receipts tax for a service subject
to a tax should be collected on the "entire gross receipts derived
from the fee charged by the collection and disposal of solid waste."
The DF&A rule does not distinguish between a fee that is mandated
by a municipality or a county to be paid by a citizen for a service
subject to gross receipts tax under § 26-52-316, and a fee that is
voluntary or optional.
You then pose the following question:
Is a fee that is mandated by a municipality or a county to be paid by
a citizen on the service for the collection and disposal of solid waste
subject to the gross receipts tax for services under § 26-52-
3l6(a)(2)?
323 CENTER STREET. SU ITE 200 · LITTLE ROCK. A RKANSAS 72201
TELEPHONE (501) 682-2007 · FAX (50 I) 682-8084
ARKANSASAG.GOV The Honorable DeAnn Vaught
State Representative
Opinion No. 2018-03 I
Page 2
RESPONSE
I must respectfully decline to address your question, which seeks my advisory
opinion on a general issue of state tax law. DF&A's Revenue Division is the
appropriate authority to issue letter opinions on questions involving the application
of the state sales tax law. See Gross Receipts Tax Regulations GR-7 S(E) (2008)
("Opinions issued by any other agency, whether formal or informal, are not
binding on the Department."). Accordingly, you may wish to submit your
question to the following office:
Arkansas Department of Finance and Administration
Sales and Use Tax Division
Post Office Box 1272
Little Rock, AR 72203-1272
If a disagreement exists over the interpretation of the law by the Revenue
Division, interested parties of course may resort to judicial remedies.
I regret that I could not be of assistance in this matter. Please feel free to contact
me if I can help you in some other respect.
Sincerely,
-~-- ~
LESLIE RUTL~
Attorney General