Sales Tax relief on food takes effect in Arkansas

by JohnAnderson, The Baxter Bulletin: Taxes don't come down as often as they go up, so customers couldn't help but smile when they talked about the three-percentage-point reduction in Arkansas' sales tax on groceries that took effect Sunday. "I guess, to a certain extent, any savings is a good thing," Stephanie Morris of Mountain Home said as she finished shopping . . . But with prices creeping up for some groceries, confounding laws on how the tax reduction is applied and a high level of skepticism on government, they'll have to be forgiven for not dancing. "It should be good," Mountain Home area resident Bob Recktenwald said, "if the grocery stores don't mark up their profits." State legislators this year responded to Gov. Mike Beebe's proposal to gradually phase out the sales tax on groceries by passing a bill that halves the state's portion of the grocery tax. Any further reductions would require another act of the legislature and are unlikely before it meets again in 2009. "It's not going to mean that much until they do away with the whole thing. Then you'll see some real savings," Recktenwald said.

. . . Beebe said last week that he still wants to push next year for a further reduction in the tax and wants to eventually eliminate it, except for a 1/8-cent sales tax for conservation that was approved by voters in 1996. He said the timing was right for the tax relief, due to the state's financial health. Arkansas in the 2006-07 fiscal year was on target to have a surplus approaching $1 billion. [Read More] ARRA Comment: again the surplus was close to $1 Billion. Remember, Gov. Beebe was forced during his campaign to acknowledge the need to reduce food tax because of the campaign plank of Asa Hutchinson and the embarrassment over the excessive surplus. However, once taking office the legislators bought his position to "phase out" the food tax. The operative missing word now for the future is "maybe." Beebe and the Democrat state leadership wants to spend and obligate the surplus; they do not want to return it to the people - or it would be done. They are going to drag out the time another two years and then "maybe" they will phase it out. It is time to end the tax on groceries!

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Tags: Arkansas, food tax, sales tax