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.

Fiscal Impact Statement Bill: SB377 Bill Subtitle: 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. --------------------------------------------------------------------------------------------------------------------------------------- Sponsors: Sen. Hester and Rep. Underwood Basic Change: SB377 creates the Grocery Tax Relief Act to provide a state sales and use tax exemption for the sale of food and food ingredients. SB377 provides that "[t]he gross receipts or gross proceeds derived from the sale of food and food ingredients are subject to municipal and county gross receipts taxes." Under current law, food and food ingredients are taxed at the rate of 0.125%, which is levied under Amendment 75 of the Arkansas Constitution. The levy under Amendment 75 only applies to the sale of goods and services that are otherwise subject to sales or use tax. Under SB377, food and food ingredients would no longer be subject to the current 0.125% state tax levied under Amendment 75. The bill retains the current definitions of