This bill amends the Arkansas Code to establish a general sales and use tax exemption for sales made to qualified nonprofit organizations. It defines a "qualified nonprofit organization" as one that is recognized under 26 U.S.C. 501(c)(3) with an annual operating budget of less than $200,000, and that provides charitable community-based services to residents in need. The exemption applies to gross receipts from the sale of tangible personal property, specified digital products, digital codes, or services, provided that the total gross receipts for the transaction do not exceed $2,000.

To qualify for this exemption, nonprofit organizations must submit an application to the Secretary of the Department of Finance and Administration, who will respond with either an exemption certificate or a denial, including reasons for the latter. The Secretary is also empowered to revoke the exemption if the organization no longer meets the criteria. Additionally, the Secretary may create rules to facilitate the application and reverification processes. The provisions of this act will take effect on the first day of the calendar quarter following its enactment.