The "Grocery Tax Relief Act" proposes significant amendments to Arkansas tax law by exempting food and food ingredients from state sales and use taxes, while allowing municipalities and counties to continue imposing their own taxes under existing laws. The bill includes the deletion of specific tax rates and provisions that previously applied to food, effectively setting the state tax rate on these items to zero percent. It also introduces new definitions to clarify that prepared food is not included in this exemption, aiming to provide financial relief to consumers on essential grocery items.

In addition to the exemption, the legislation modifies various sections of the Arkansas Code related to the taxation of tangible personal property and introduces new excise taxes on food and food ingredients at rates of 1%, 0.5%, and 0.875%. It removes the Secretary of the Department of Finance and Administration's authority regarding tax collection conditions for sellers without a physical presence in the state and clarifies that municipal and county use taxes will apply to the sales price of food and food ingredients. The changes are set to take effect on January 1, 2026.

Statutes affected:
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)
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)
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)