Arkansas Taxable Services: Towing, Solid Waste Collection, Landscaping, Lawn Care and Pest Control Are Taxed Under the Gross Receipts Rules
Arkansas Taxable Services: Towing, Solid Waste Collection, Landscaping, Lawn Care and Pest Control Are Taxed Under the Gross Receipts Rules
This guide is informational content, not legal or tax advice. Confirm current rules, rates and deadlines with the agencies named below before you price a service or file a return.
If you plan to sell a service in Arkansas, the first question is usually not about a business license. Arkansas has no general statewide business license and no county business license. The question that matters more is whether the Department of Finance and Administration (DFA) treats your service as taxable. Under the gross receipts rules, a specific list of services is subject to sales tax, and several common trades appear on it: towing, solid waste collection, landscaping, lawn care and pest control.
This guide walks through how each of those services is taxed, what else sits on the taxable services list, and how to register once you know you owe the tax. Arkansas taxable services are spread across several DFA rule sections, so read each section that matches your work, then confirm the specifics with DFA before you set prices or invoice a customer.
How the Gross Receipts Rules Work
The state sales tax rate is 6.5 percent. The gross receipts rules tell you which services fall under that tax. They are published in the Arkansas Administrative Code under DFA Revenues and cited by number, such as GR-9.5 for towing. Some sections cover an entire category, while others carve out exceptions, so the wording of each rule matters more than the general name of your trade.
Two registration steps apply once you sell a taxable service. First, a business selling tangible personal property or taxable services must obtain a sales and use tax permit. The permit costs $50 and is applied for through the Arkansas Taxpayer Access Point (ATAP), DFA's online portal. Second, if you have employees, withholding is also handled through ATAP.
Towing and Wrecker Services (GR-9.5)
Wrecker and towing receipts are taxable under GR-9.5. The taxable amount includes mileage and hook-up charges, so do not treat those as untaxed add-ons. Two points affect how you collect:
- Local tax follows the destination. The local tax depends on where the towed vehicle is delivered, not on where your truck or yard is located.
- A tow into Oklahoma is not taxed. Record the destination on every ticket so you can show it if DFA asks.
Solid Waste Collection and Disposal (GR-9.6)
GR-9.6 taxes the entire solid waste collection and disposal fee. There is no labor deduction, so you cannot tax only the disposal portion and treat the crew's time as exempt. Build your pricing around the full taxable amount.
Junk removal is the gray area. It is not settled whether a junk removal fee counts as solid waste collection under GR-9.6. Check with DFA before you advise customers or set a tax line for that service.
Landscaping and Lawn Care (GR-9.2 and GR-21)
GR-9.2 taxes landscaping on any property. Lawn care is taxed when performed on nonresidential property. Because the rule as written reaches lawn care on nonresidential property, ask DFA to confirm how residential lawn care is handled before you assume it falls outside the tax.
GR-9.2 also addresses materials left on the site. Confirm with DFA how materials you bought for resale and left on a customer's property are taxed, because the answer changes how you should itemize an invoice.
GR-21 treats contractors as consumers of the materials they use. In practice, you should expect to be treated as the consumer of the materials you install, not as a reseller. Confirm that treatment for your jobs with DFA, especially if you bill materials and labor on separate lines. Labor-only jobs raise their own questions, so ask DFA how they are treated before you publish a price list.
Pest Control (GR-9.11)
Pest control is taxable at the full fee under GR-9.11. The main exception is pest control for agricultural production, which is exempt. Check with DFA how that exemption applies to a farm customer before you leave the charge off a bill.
Pest control operators should also confirm with the Department of Agriculture whether a state license, certification or registration applies to the applications they perform.
Other Taxable Services on the GR-9(B) List
GR-9(B) lists several other services as taxable. Most of these rules took effect in 2004. Review the table below, then read the specific rule that matches your business.
| Service | Rule |
|---|---|
| Cleaning and janitorial work | GR-9.4 |
| Pool cleaning and servicing | Listed in GR-9(B) itself |
| Parking lot and gutter cleaning | GR-9.7 |
| Dry cleaning and laundry | GR-9.8 |
| Self-storage | GR-9.9 |
| Body piercing, tattooing and electrolysis | GR-9.10 |
| Pest control (full fee; agricultural production exempt) | GR-9.11 |
| Security and alarm monitoring | GR-9.12 |
| Locksmith services | GR-9.15 |
| Pet grooming and kennels | GR-9.16 |
Registering to Collect and Remit Tax
Registration depends on the activity, and each activity has its own agency. Use this checklist:
- Sales and use tax permit: $50, applied for through ATAP on the DFA website.
- Withholding: handled through ATAP if you pay employees.
- Unemployment insurance: registered with the Division of Reemployment.
- Entity filings: made with the Secretary of State if you form an LLC or corporation.
- Assumed names: entity trade names go to the Secretary of State, and sole proprietor assumed names go to the county clerk.
- City license: set by your city, not your county.
City rules vary. Arkansas has 75 counties and 500 municipalities, and many cities impose their own business license, privilege license or registry on different bases. Examples include:
| City | City requirement |
|---|---|
| Little Rock | Based on a base amount plus employees |
| North Little Rock | Based on a base amount plus employees |
| Bentonville | Free registry |
| Conway | No city business license |
City rules change, so confirm the current requirement with the city where you operate.
Occupational Licenses to Check
Occupational licenses come from state agencies and boards, not from a general business license. Check whether your work falls under one of these:
- Department of Labor and Licensing: the Contractors Licensing Board, the Electrical Examiners Board and the HVAC/R Board. Confirm whether your installation or repair work triggers any of them.
- Department of Health: licenses plumbers, cosmetologists, massage therapists and food establishments.
- State Police: licenses security and investigators. Security and alarm monitoring businesses should confirm whether that applies to them.
- Department of Agriculture: confirm whether pest control or lawn treatment work needs a license or certification.
Forming an LLC to Run the Business
Many service owners form an LLC to separate personal and business liability. Whether that fits your situation is a decision to discuss with a qualified attorney or CPA. If you form one, these are the key facts:
- Formation document: Certificate of Organization (Form LL-01), with a $45 filing fee online ($50 on paper).
- Annual franchise tax: the Annual LLC Franchise Tax Report carries a $150 fee and is due May 1 each year. Late filing adds a $25 penalty plus interest.
- Registered agent: a street address in Arkansas where the agent is located. A P.O. Box is not acceptable, and an incomplete filing will be returned for correction.
- Name: must include Limited Liability Company, Limited Company, or an abbreviation such as LLC, L.L.C., LC or L.C.
- Processing: the Secretary of State lists anticipated processing of 3 to 5 business days for all filings, and its FAQ says most filings are completed within two business days of receipt. It does not publish an expedited service or fee, but in-person drop offs carry a 48 hour turnaround.
If you operate under a trade name, the fees depend on your entity type. An LLC or corporation files a fictitious name application with the Secretary of State for $22.50 online or $25.00 on paper. Reserving a name costs $22.50 and holds it for 120 days. A domestic corporation also files an approved form with the county clerk where its registered office is located, unless that office is in Pulaski County. A sole proprietor records the business name with the county clerk, and each county sets that fee, so confirm the amount locally.
Questions to Confirm With DFA
Before you finalize prices or invoices, get written answers to these questions:
- Whether a junk removal fee counts as solid waste collection
- How residential lawn care is treated
- How labor-only landscaping and lawn jobs are treated
- How materials you install are taxed under GR-21
- Which local rate applies to a tow, based on its destination
- How the agricultural production exemption applies to a pest control customer
Official Resources
- Arkansas Department of Finance and Administration
- Sales and use tax account registration
- Secretary of State, Business and Commercial Services Division
- Arkansas business entity search
- Corporations Online Filing System
- Arkansas Small Business and Technology Development Center
- SBA district resources for Arkansas
This article is informational content, not legal or tax advice. Rates, fees and rules can change, so verify current requirements with the Department of Finance and Administration and the Secretary of State. For complex situations, such as mixed residential and commercial work, a tow into another state, or choosing an entity structure, consult a qualified attorney or CPA.