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HB 1851

Ad valorem; exempt certain tractors, agricultural implements and equipment, and vehicles.

2025 Regular Session Introduced by Jody Steverson

Clarifies that sales tax exemption for food in public school/college cafeterias stays in effect even when a for-profit third-party operator manages the facility, as long as operate

Died In Committee
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Bill Summary · HB 1851

Summary — HB 1851 (Arkansas) — Clarify sales tax exemption for school/college cafeterias

Status note: The materials you provided include mixed documents and metadata from different states and bills. This summary focuses on the Arkansas HB 1851 materials (Department of Finance and Administration fiscal note and bill text) included in your packet, which amend the Arkansas sales tax exemption for food sold in public school and college cafeterias.

Main purpose

To clarify that the existing Arkansas sales tax exemption for food, food ingredients, and prepared food sold in public/common/high school or college cafeterias/dining facilities continues to apply even when the school or college contracts with a third‑party (for‑profit) vendor to provide services or manage the cafeteria — provided the cafeteria is still operated primarily for teachers and pupils, is not operated primarily for the public, and is not operated for profit.

Key provisions

  • Amends Arkansas Code § 26-52-401(3) (sales tax exemptions) to:
    • Restate the exemption for gross receipts from sale of food/food ingredients/prepared food sold in public/common/high school or college cafeterias/dining facilities that are:
    • operated primarily for teachers and pupils,
    • not operated primarily for the public, and
    • not operated for profit.
    • Add an explicit clarification (new subsection (B)) that a cafeteria/dining facility that contracts with a third‑party for services or management is not, solely because of that contract, considered “operated for profit” for purposes of the exemption even if the third‑party is a for‑profit operator.
  • Effective date: Section 2 (the Code amendment) takes effect on the first day of the calendar quarter following the act’s effective date.

Who is affected

  • Public school districts and public colleges/universities that operate cafeterias/dining facilities.
  • Third‑party food service contractors and managers (for‑profit entities) that provide cafeteria services under contract.
  • Students, teachers, and staff who purchase food in these facilities (no direct tax increase expected).
  • Arkansas Department of Finance and Administration and local tax administrators interpreting and enforcing the exemption.

Fiscal/administrative impact

  • The DFA fiscal impact statement indicates no fiscal impact and no resources or procedural changes required. It concludes no change in state revenue expected from the clarification.
  • The bill is intended to preserve the original legislative intent of the exemption while aligning the law with current school food service management practices.

Additional note

If you need a summary that reconciles the conflicting metadata in your packet (e.g., other HB1851 texts from another state or different subject lines), provide which jurisdiction or bill version you want prioritized and I will prepare a focused summary for that bill.

Compiled from official sources — confirm details with the bill’s official record.

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