AR HB1384

Repeals the definition of "candy" from Arkansas Code § 26-52-103(3) and § 26-53-102(3), removing candy as a separately defined category in the Gross Receipts Act of 1941 and Compensating Tax Act of 1949.

Removes candy from the exclusions in the definition of "food" and "food ingredients" under both tax acts, making candy subject to the same sales tax rate applied to food and food ingredients.

Requires the Secretary of the Department of Finance and Administration to either publish a list of Universal Product Codes identifying candy and soft drinks for retailer guidance, or provide penalty relief for retailers demonstrating good faith efforts to collect taxes on candy at the food and food ingredients rate.

Applies candy taxation at the food and food ingredients rate under § 26-52-317 or § 26-53-145 for retailers collecting and remitting taxes, or at the standard rates under § 26-52-301, § 26-52-302, § 26-53-106, or § 26-53-107 for those demonstrating good faith compliance efforts.

Effective date is the first day of the calendar quarter following the enactment of the act.