WeVote
Log In

Bill

Bill

SB 377

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.

2025 Regular Session Introduced by Bart Hester and 1 co-sponsor

SB 377 exempts groceries from a 0.125% state sales tax, lowering food costs for consumers while allowing local taxes to remain, effective January 1, 2026.

Died in Senate Committee at Sine Die adjournment.
0
WeVote Research Nonpartisan
Bill Summary · SB 377

Summary of SB 377: Grocery Tax Relief Act

Purpose and Intent

Senate Bill 377, titled the Grocery Tax Relief Act, was introduced to amend existing laws regarding sales and use taxes on food and food ingredients in Arkansas. The primary intent of the bill was to exempt groceries from state sales and use taxes, thereby reducing the financial burden on consumers purchasing food items.

Key Provisions

  • Exemption from State Sales Tax: SB 377 proposed to eliminate the current state sales tax of 0.125% on food and food ingredients, as established under Amendment 75 of the Arkansas Constitution.
  • Definitions: The bill retained the existing definitions of "food" and "food ingredients," which include substances sold for human consumption but exclude items like candy, soft drinks, alcoholic beverages, tobacco, and dietary supplements.
  • Prepared Food Exclusion: The exemption would not apply to "prepared food," which would continue to be taxed at the full state sales and use tax rate. However, items such as raw meat, fish, and poultry requiring cooking by the consumer would qualify for the exemption.
  • Local Tax Impact: While the state sales tax would be eliminated, the bill stipulated that municipal and county gross receipts taxes would still apply to the sale of food and food ingredients.

Fiscal Impact

The fiscal analysis indicated significant revenue implications:
- Estimated Revenue Loss:
- FY2026: Approximately $4.4 million in state sales and use tax loss (for five months of reduced tax collection).
- FY2027: Estimated loss of $10.9 million.
- The losses would affect various funds, including the Conservation Fund and State Central Services.

Affected Parties

  • Consumers: Taxpayers would benefit from the elimination of state sales tax on food purchases, potentially lowering grocery bills.
  • Local Governments: Municipalities and counties would continue to collect local sales taxes on food, mitigating some of the revenue loss at the state level.

Implementation Timeline

  • The provisions of SB 377 were set to take effect on January 1, 2026, should the bill have passed.

Legislative Status

  • SB 377 was introduced on March 5, 2025, and after being read and referred to the Senate Revenue & Tax Committee, it ultimately died in committee on May 5, 2025, at Sine Die adjournment.

This summary provides an overview of SB 377, highlighting its objectives, key provisions, potential impacts, and legislative status, making it accessible for readers seeking to understand the implications of the proposed Grocery Tax Relief Act.

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

Sign in to ask a question.