The proposed constitutional amendment seeks to implement a new excise tax of 0.5% on certain taxable sales, including tangible personal property, specified digital products, and services, to help reimburse counties for revenue losses due to the homestead property tax credit. This tax will be collected in the same manner as existing Arkansas gross receipts and compensating taxes. Notably, the tax will not apply to food, food ingredients, or the sale of used motor vehicles, trailers, and semitrailers.

The revenue generated from this excise tax will be exclusively allocated for reimbursing counties for the tax revenue reduction caused by the homestead property tax credit and for administering the application of this credit. The amendment is set to take effect on January 1, 2025, and will be presented to voters for approval in the next general election. The ballot title will reflect the purpose of the amendment, emphasizing its role in supporting county finances related to the homestead property tax credit.