State v. Dunhall Pharmaceuticals, Inc.

Robert H. Dudley, Justice.

The sole issue on appeal is whether the free distribution of samples of prescription products by the appellee, Dunhall Pharmaceuticals, Inc., is subject to a sales tax. The trial court held the distribution was not taxable. We affirm.

The Arkansas Gross Receipts Tax is applicable when there is a transfer of either title or possession for a valuable consideration. Ark. Stat. Ann. § 84-1902 (Repl. 1980). Obviously, when the samples were distributed there was a transfer of title and possession. The issue is whether the distribution was for a valuable consideration. The…