Arkansas Legislature – Page 117

Lawmakers Consider Proposals to Increase Grocery Tax, Eliminate Tax Holiday

Apr 25, 2018Jerry Cox1 CommentLegislatureArkansas Legislature, Legislation

On Wednesday morning the Arkansas Tax Reform and Relief Legislative Task Force met to review proposed changes to the state’s sales tax exemptions.

The task force cannot make any official changes, but it can make recommendations to the Arkansas Legislature ahead of the next legislative session in 2019.

Among the changes under review are an increase in the state grocery tax; repealing sales tax exemptions for nonprofit hospitals and nursing homes; eliminating the state sales tax holiday; and reducing some of the taxes collected on new or used cars.

Bad Idea: Eliminating the Sales Tax Holiday

In 2011 the Arkansas Legislature created a back-to-school sales tax holiday. During the first weekend in August, the state doesn’t collect sales taxes on school supplies, instructional material, and clothing sold for less than $100. Missouri, Tennessee, Oklahoma, Texas, and Louisiana have similar tax holidays.

Family Council supported the sales tax holiday in 2011, because it benefits families — including home school families — shopping for the upcoming school year. Eliminating the state sales tax on school supplies for one weekend is like giving families a 6% – 7% discount as they do their back-to-school shopping.

The task force is considering a proposal to eliminate the tax holiday. Some lawmakers may not feel like the sales tax holiday does much, but a lot of parents would beg to differ.

Bad Idea: Taxing Sales to Nonprofit Hospitals and Nonprofit Nursing Homes

Currently, sales to nonprofit hospitals, sanitariums, and nursing homes are not taxed in Arkansas. In December consultants for the state singled-out these sales tax exemptions, saying they cost the state millions of dollars in revenue.

Many nonprofit hospitals and nursing homes are faith-based. They offer people more than just medication and healthcare, and they may operate on budgets that are so tight they would have to shut their doors if they were taxed at the same rate as corporate healthcare facilities.

The task force is considering a proposal to tax sales to nonprofit hospitals and nonprofit nursing homes. Our state needs to think twice before increasing the tax burden nonprofit hospitals and nursing homes carry.

Bad Idea: Increasing the Grocery Tax

From 2009 – 2013 Family Council supported Governor Beebe’s effort to reduce and ultimately eliminate Arkansas’ sales tax on groceries. People shouldn’t be penalized financially for buying basic necessities like bread and milk.

Currently, groceries in Arkansas are taxed at a reduced rate of 1.5%. However, the Arkansas Tax Reform and Relief Task Force is considering a proposal to impose the full sales tax on groceries — 6.5%.

That means if a family of four buys $100 worth of groceries every week, their sales tax would increase from $1.50 to $6.50.

Over the course of a year, that family will end up paying an extra $260 in taxes — just so they can put food on the table at home. The legislature may be able reduce the impact of these taxes in other ways, but any increase to the state’s grocery tax is going to add financial strain to a lot of households.

Good Idea: Cutting Taxes on New or Used Cars

Family Council supports efforts to reduce the state sales tax on new and used cars, because parents with young children often cannot afford expensive vehicles, and the used car tax makes it harder for them to purchase a safe, reliable car for their family.

From 1997 – 2011, the state did not collect sales tax on used cars sold for less than $2,500.

In 2011 Family Council successfully lobbied lawmakers to cut taxes on used cars. Under that law, taxes are not collected on new or used vehicles sold for less than $4,000.

Now this legislative task force is reviewing a proposal to stop collecting state sales tax on new or used cars sold for less than $10,000. That sounds like a good idea to us!

Conclusion

You can find a full list of the task force’s tax reform proposals here.

If you are concerned about any of these tax proposals, contact your state representative and state senator.

If you need help contacting your legislators, call our office at (501) 375-7000.

State Officials, City Attorneys Spar Over Fayetteville Ordinance

Sep 26, 2017Jerry CoxLegislationArkansas Legislature, Fayetteville, Homosexuality, Legislation, LGBTQ

In 2015 the Arkansas Legislature passed Act 137, the Intrastate Commerce Act. This good law prevents local municipalities from creating protected classes not found in state law.

It ensures Arkansas does not wind up with a patchwork of conflicting civil rights ordinances and policies in different cities and counties. It also helps ensure local municipalities do not adopt ordinances that undermine religious liberties.

In the fall of 2015 the City of Fayetteville adopted an ordinance creating protections based on sexual orientation and gender identity.

Arkansas Attorney General Leslie Rutledge wrote that the ordinance was unenforceable under Act 137. Last February the Arkansas Supreme Court agreed and overturned the ordinance, saying it violates state law.

The discussion should have ended there, but now attorneys from the City of Fayetteville and the State of Arkansas are back in court, arguing over whether or not Act 137 is constitutional. Fayetteville’s attorneys say the law is not constitutional. The state’s attorneys say it is.

The judge overseeing the case has even gone so far as to suggest that lawmakers who sponsored Act 137 should be questioned to determine their reasoning for the legislation.

Legislative intent is important, but it has nothing to do with whether or not Act 137 is constitutional. Laws about discrimination are best left to the state and federal governments. Act 137 simply ensures the state will make those policies rather than local municipalities.

Photo Credit: “Old Main from the northwest, University of Arkansas, Fayetteville, Arkansas (autumn)” by Brandonrush – Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 Unported.

Legislature Begins Looking at Two Key Bills During the Interim

Jun 23, 2017Jerry CoxLegislatureArkansas Legislature, Arkansas Lottery, Bathroom Policies, LGBTQ, Lottery Oversight, Privacy

This week the Arkansas Legislature moved forward with plans to look at two key pieces of legislation between now and 2019.

The first is S.B. 583 by Senator Joyce Elliott. The legislature will study the feasibility of requiring 25% of lottery proceeds to fund scholarships; reinstating the 2.5 GPA requirement to be eligible for scholarships; and having independent consultants for the Arkansas Lottery.

The second is S.B. 774, the privacy bill by Senator Linda Collins-Smith. This bill would have required a person using a public shower, locker room, restroom, or similar facility on government property to use the facility that corresponds to the biological sex listed on his or her original birth certificate. The legislature will study this issue in the months to come.

Lawmakers cannot pass these bills during the interim study period, but can research these issues, collect testimony, and present recommendations when the Arkansas Legislature reconvenes as a whole.

We are glad lawmakers have agreed to look at these two issues during the interim. The next step is to schedule meetings where experts, members of the public, and others can testify at the Capitol.