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HB 1851

TO AMEND THE SALES TAX EXEMPTION FOR FOOD, FOOD INGREDIENTS, AND PREPARED FOOD SOLD IN A PUBLIC, COMMON, HIGH SCHOOL, OR COLLEGE CAFETERIA OR DINING FACILITY.

2025 Regular Session Introduced by Steve Crowell and 1 co-sponsor

HB 1851 ensures food sold in public school and college cafeterias remains sales tax-exempt, even if managed by for-profit contractors, supporting affordable meals for students.

Notification that HB1851 is now Act 714
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WeVote Research Nonpartisan
Bill Summary · HB 1851

Summary of HB 1851: Amendment to Sales Tax Exemption for Food in Cafeterias

Bill Number: HB 1851
Title: To Amend the Sales Tax Exemption for Food, Food Ingredients, and Prepared Food Sold in a Public, Common, High School, or College Cafeteria or Dining Facility
Status: Now Act 714
Introduced: March 19, 2025
Sponsors: Representative Jean and Senator Crowell

Purpose and Intent

The primary purpose of HB 1851 is to clarify and amend the existing sales tax exemption for food sold in public school and college cafeterias. The bill aims to ensure that the exemption remains applicable even when a third-party contractor, which may operate for profit, manages the cafeteria services. This update aligns the exemption with current practices in school food service management.

Key Provisions

  • Clarification of Exemption:

    • The bill specifies that food sales in public, common, high school, or college cafeterias are exempt from sales tax if:
    • The cafeteria is primarily for teachers and students.
    • It is not operated for profit.
    • Importantly, the exemption still applies even if the cafeteria contracts with a third-party contractor that operates for profit.

  • Amendment to Arkansas Code:

    • The bill amends Arkansas Code § 26-52-401(3) to reflect these changes, ensuring that the exemption is consistent with modern operational practices in school cafeterias.

Impact

  • Who is Affected:

    • This legislation primarily affects public schools and colleges in Arkansas that operate cafeterias or dining facilities.
    • It also impacts third-party contractors that provide food service management to these institutions.

  • Fiscal Impact:

    • The Department of Finance and Administration has indicated that there is no fiscal impact associated with this bill, meaning it will not affect state revenue.

  • Taxpayer Impact:

    • There is no anticipated impact on taxpayers as a result of this bill.

Procedural Aspects

  • Effective Date:

    • The provisions of HB 1851 will take effect on the first day of the calendar quarter following the act's effective date.

  • Legislative Actions:

    • The bill was passed by both the House and Senate and was signed into law, becoming Act 714 on April 16, 2025.

Conclusion

HB 1851 serves to modernize and clarify the sales tax exemption for food sold in school and college cafeterias, ensuring that these facilities can continue to provide affordable meals to students without the burden of sales tax, even when managed by for-profit contractors. This legislative change reflects a commitment to supporting educational institutions and their food service operations.

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

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