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AR SB377
Bill
Status
5/5/2025
Primary Sponsor
Bart Hester
Click for details
AI Summary
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Food and food ingredients become exempt from Arkansas state sales and use taxes effective January 1, 2026, eliminating the current 1.375% state tax rate on groceries
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Municipal and county gross receipts taxes continue to apply to food and food ingredients; only state-level taxes are removed
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"Food and food ingredients" excludes prepared food, but includes items only cut, repackaged, or pasteurized by the seller, as well as raw eggs, fish, meat, and poultry requiring cooking
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Candy and soft drinks remain subject to standard sales tax rates rather than the food exemption, with retailers protected from penalties if they demonstrate good faith compliance efforts
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Repeals provisions that previously allocated grocery tax revenue to general revenues (76.6%), Property Tax Relief Trust Fund (8.5%), and Educational Adequacy Fund (14.9%)
Legislative Description
To Create The Grocery Tax Relief Act; To Amend The Law Concerning The Sales And Use Taxes Levied On Food And Food Ingredients, As Affirmed By Referred Act 19 Of 1958; And To Exempt Groceries From State Sales And Use Taxes.
Last Action
Died in Senate Committee at Sine Die adjournment.
5/5/2025