This bill amends the existing sales and use tax exemption laws in Arkansas to expand the definition of eligible machinery and equipment used in manufacturing. Specifically, it includes machinery and equipment utilized in the research and development of articles of commerce, thereby broadening the scope of the exemption. The amendments clarify that machinery and equipment must be used directly in the research and development process, as well as in the actual manufacturing, processing, or packaging of products. The bill also specifies that the exemption applies to machinery and equipment used throughout the entire manufacturing process, from research and development to the completion of the finished product.

Key changes in the bill include the insertion of language that explicitly mentions "research and development" in various sections, ensuring that machinery and equipment used for these purposes are included in the tax exemption. Additionally, the bill modifies the definition of "used directly" to encompass machinery and equipment involved in both research and development and actual production processes. The effective date for these changes is set for the first day of the calendar quarter following the enactment of the bill.

Statutes affected:
SB 256: 26-52-402(a), 26-52-402(c), 26-53-114(a), 26-53-114(c)