Arkansas imposes excise or privilege taxes on tobacco products other than cigarettes that are offered for sale in the state. The taxes must be reported and paid by licensed wholesalers making the first sale in the state. However, retailers who purchase tobacco products directly from a manufacturer or from an unlicensed wholesaler and consumers who purchase untaxed tobacco products from outside the state are also liable for the tax.
The tax on tobacco products other than cigarettes is 68% of the invoice price to a wholesaler or retailer, before discounts, except that the total amount of the excise or privilege taxes on cigars may not exceed $0.50 per cigar.
On or before the 15th day of each month, every wholesaler must file an Other Tobacco Products Excise Tax Return (Form OTP-1) and Schedule A, along with payment for taxes due. These forms are required to be filed monthly, even if no activity occurred. Retailers who purchase tobacco products directly from a manufacturer or from an unlicensed wholesaler and consumers who purchase untaxed tobacco products from outside the state are also liable for the tax. Form OTP-1 and Schedule A can be filed online through the Arkansas Taxpayer Access Point at https://atap.arkansas.gov/_/.
“Tobacco products” means all products containing tobacco for consumption, including without limitation cigarettes, cigars, little cigars, cigarillos, chewing tobacco, smokeless tobacco, snuff, smoking tobacco, including pipe tobacco, and smoking tobacco substitutes.
“Manufacturer” means a person that produces or offers a tobacco product for sale, including without limitation federally licensed importers and distributors that deal in tobacco products as manufacturers and that are required under this subchapter to sell only to licensed wholesalers or licensed retailers located in the state.
“Invoice price” means the price that a wholesaler or retailer of tobacco products pays to a manufacturer, importer, or distributor for tobacco products that the wholesaler or retailer subsequently sells in the state.