RELATING TO CAPITAL IMPROVEMENT PROJECTS FOR THE BENEFIT OF THE EIGHTEENTH REPRESENTATIVE DISTRICT.

2025 Regular Session Introduced by Gene Ward

House Bill 1250 offers Arkansas residents a sales tax holiday for disaster-preparedness supplies each November, making essential items more affordable and promoting safety.

Referred to FIN, referral sheet 4

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Purpose and Intent

House Bill 1250 (HB 1250) aims to establish a sales tax holiday for specific disaster-preparedness supplies. The intent of the bill is to encourage residents of Arkansas to prepare for potential disasters, such as natural calamities or public emergencies, by making essential supplies more affordable through a temporary exemption from sales and use tax.

Key Provisions

Sales Tax Holiday: The bill proposes a sales tax exemption for designated disaster-preparedness supplies during the first full weekend of November each year, starting at 12:01 a.m. on Saturday and ending at 11:59 p.m. on Sunday.

Definition of Supplies: The bill categorizes disaster-preparedness supplies into four main groups:

Fastening Supplies: Items used for securing or covering property, including:
- Bungee cords
- Rope
- Ratchet straps
- Duct tape
- Tarpaulins
Food-Related Supplies: Items for food storage and preparation, including:
- Bottled water
- Artificial ice
- Manual can openers
General Supplies: General-purpose items for disaster response, including:
- Batteries (A, AA, AAA, C, D, 6-volt, 9-volt, and cellular phone batteries)
- Portable generators
- Self-powered radios
Safety Supplies: Items for safety during disasters, including:
- Smoke detectors
- Fire extinguishers
- First-aid kits

Implementation: The Arkansas Department of Finance and Administration (DFA) is tasked with promulgating rules to implement the provisions of the bill.

Affected Parties

Consumers: Arkansas residents will benefit from the sales tax exemption, making it more affordable to purchase essential disaster-preparedness supplies.

Retailers: Businesses selling these supplies will need to adjust their pricing and sales processes during the holiday period.

State Revenue: The bill is expected to result in a loss of sales tax revenue for the state and local governments.

Fiscal Impact

Estimated Revenue Loss: The fiscal impact statement estimates a loss of approximately $2,162,694 in state sales and use tax for FY2026, with a projected increase to $2,227,574 in FY2027. This includes losses across various funds, such as:

General Revenue
Property Tax Relief
Educational Adequacy Fund
Highway Fund

Procedural Aspects

Timeline: The bill was introduced on January 27, 2025, and has been referred to the Committee on Revenue & Taxation. The effective date is set for the first day of the calendar quarter following the act's passage, with an assumed effective date of October 1, 2025.

Legislative Actions: The bill has undergone several readings and was withdrawn by the author on March 5, 2025.

Conclusion

HB 1250 seeks to promote disaster preparedness among Arkansas residents by providing a sales tax holiday for essential supplies. If enacted, it would facilitate access to necessary items during critical times while impacting state revenue. The bill's implementation will require coordination with the DFA to ensure compliance and public awareness.

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