The Grocery Tax Relief Act seeks to amend Arkansas tax law by exempting food and food ingredients from state sales and use taxes, while still permitting local municipalities and counties to impose taxes under the Arkansas Gross Receipts Act and the Arkansas Compensating Tax Act. The bill aims to alleviate the financial burden on consumers by ensuring that the gross receipts from the sale of unprepared food items are not subject to state taxes. It also clarifies that prepared food will not benefit from this exemption, thereby focusing the tax relief on essential grocery items.

In addition to these exemptions, the bill makes several amendments to existing tax codes, including the repeal of specific provisions related to the taxation of food and food ingredients. It introduces new definitions for "food" and "food ingredients" and modifies the Arkansas Compensating Tax Act of 1949 to establish a three percent (3%) tax on the use and consumption of tangible personal property and certain digital products, while excluding used motor vehicles and trailers. The bill also removes previous exemptions for food and food ingredients from these taxes and sets the effective date for the changes to January 1, 2026.

Statutes affected:
Old version HB1685 V2 - 3-17-2025 12:39 PM: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 03-17-2025, 6-62-701, 6-62-1101, 15-20-1301, 26-73-113, 26-74-201, 26-74-301, 26-75-201, 26-75-301, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
Old version HB1685 V3 - 4-1-2025 10:07 AM: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 04-01-2025, 6-62-701, 6-62-1101, 15-20-1301, 26-73-110, 26-73-113, 26-74-201, 26-74-301, 26-74-401, 26-74-601, 26-75-201, 26-75-401, 26-75-501, 26-81-101, 26-82-101, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
Old version HB1685 V4 - 4-8-2025 02:21 PM: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 04-08-2025, 6-62-701, 6-62-1101, 15-20-1301, 26-73-110, 26-73-113, 26-74-201, 26-74-301, 26-74-401, 26-74-601, 26-75-201, 26-75-401, 26-75-501, 26-81-101, 26-82-101, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
Old version HB1685 V5 - 4-9-2025 06:12 PM: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 04-09-2025, 6-62-701, 6-62-1101, 15-20-1301, 26-52-303, 26-52-606, 26-52-607, 26-73-110, 26-74-201, 26-74-301, 26-74-401, 26-75-201, 26-75-301, 26-75-401, 26-75-501, 26-82-101, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
Old version HB1685 Original - 3-5-2025 09:44 AM: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 6-62-701, 6-62-1101, 15-20-1301, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
HB 1685: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 6-62-701, 6-62-1101, 15-20-1301, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)
Act 1008: 19-5-1103(b), 19-5-1227(b), 19-6-201(58), 19-6-201(60), 26-52-301, 26-52-302, 26-52-317, 26-52-324, 26-52-103, 04-09-2025, 6-62-701, 6-62-1101, 15-20-1301, 26-52-303, 26-52-606, 26-52-607, 26-73-110, 26-74-201, 26-74-301, 26-74-401, 26-75-201, 26-75-301, 26-75-401, 26-75-501, 26-82-101, 26-52-323, 26-53-102, 26-52-101, 26-53-101, 25-15-201, 26-18-201, 26-18-202, 26-18-208, 26-18-209, 26-52-512, 26-53-125, 26-53-145, 26-53-106, 26-53-107, 26-53-106(a)