🛒 “A Few Pennies Less at Checkout” — Senate Votes to End Arkansas’s Remaining State Grocery Tax

Monday, April 15 — Arkansas Senate

In a unanimous vote, the Arkansas Senate approved a bill to eliminate the state’s last remaining sales tax on groceries — a 0.125% conservation levy. Though small in effect, it continues a years-long bipartisan push to make food tax-free at the state level.

💸 What the Bill Would Do:

House Bill 1685, the Grocery Tax Relief Act, would:

• Eliminate the 0.125% state sales tax on groceries
  
  
• Take effect January 1, 2026
  
  
• Leave local sales taxes on groceries in place
  
  
• Repeal the levy under Amendment 75, which funds conservation efforts
  
  

📉 State Revenue Impact:

• Loss of $4.4M in FY2026
  
  
• Loss of $10.9M in FY2027
  
  

🗣️ Sen. Bart Hester (R-Cave Springs):
“That’s correct,” when asked whether the bill would save Arkansans just $5 to $8 per year.

Gov. Sarah Huckabee Sanders supports the bill.

📜 A Quick Grocery Tax History:

• 2007: Cut from 6% to 3% under Gov. Mike Beebe
  
  
• 2009 & 2011: Further cuts to 2%, then 1.5%
  
  
• 2013: Act 1450 allowed reduction to 0.125%
  
  
• 2019: Final reduction took effect
  
  

This bill would finish the job.

🧾 The Senate Vote:

✅ Passed 35–0
Heads back to the House to approve Senate amendments.

🍎 Other Tax Bills Passed Monday:

✏️ HB1732: Doubling the Teacher Expense Deduction

• Increases classroom expense deduction from $500 to $1,000
  
  
• Covers books, supplies, food, student clothing, and more
  
  
• Applies starting January 1, 2025
  
  
• Estimated revenue loss: $350,000 (FY2026)
  ✅ Passed Senate 34–0 | Sent to Governor
  
  

✈️ HB1807: Aircraft Sales & Use Tax Exemption

• Clarifies who qualifies for aircraft tax exemptions
  
  
• Requires 7.5% of aircraft value be earned annually from rentals
  
  
• Allows related-party (non-arm’s-length) exemptions
  
  
• Estimated revenue loss: $1M (FY2026); $1.6M (FY2027)
  ✅ Passed Senate 33–1 | Sent to Governor
  
  

🏢 HB1922: Tax Credit for HQ Relocations

• Offers up to 50% payroll tax credit for companies moving HQs to Arkansas
  
  
• Must meet job/wage minimums by county tier
  
  
• Credit phases down over 10 years (100% → 0%)
  
  
• Revenue neutral (must pass AEDC cost-benefit review)
  ✅ Passed Senate 22–13 | Sent to Governor
  
  

🗣️ AEDC Director Clint O’Neal:
“This would give us an excellent tool... to compete for these projects” against states like Texas and Tennessee.

🔍 What’s Next:

• Grocery tax bill returns to the House for final approval
  
  
• Three tax bills (teacher deduction, aircraft exemption, HQ credit) now await the governor’s signature