LITTLE ROCK – The Senate has approved a property tax cut that will save Arkansas homeowners $56 million every year.
The tax reduction is in Senate Bill 263, which will take effect in 2026. It raises the homestead property tax credit by $100 to $600 a year. The credit is currently $500. About 708,000 homeowners will benefit from the lower real property taxes.
The governor and legislative leaders announced that they will push for another tax reduction, House Bill 1685 to exempt food and groceries from the one-eighth cent state sales tax approved by voters in 1996 to benefit conservation efforts.
HB 1685 will lower taxes by about $10.9 million a year. The bill does not repeal any local option city and county sales taxes on groceries.
In a statewide election in 1996 Arkansas voters approved an eighth-cent sales tax, with 45 percent of the revenue dedicated to the Game and Fish Commission and 45 percent to the what was then known as the Parks and Tourism Department. The Heritage Department receives nine percent and Keep Arkansas Beautiful receives one percent.
At a press conference announcing the proposal to repeal the grocery tax, the governor said she was confident the affected agencies would still have healthy budgets in spite of the loss of revenue.
The February revenue report from the state Department of Finance and Administration indicated that the Arkansas economy remains healthy. Revenue came in at five percent above forecast.
The House of Representatives approved HB 1489 to authorize the use of nitrogen gas for executing inmates sentenced to the death penalty. After its passage by the House it was sent to the Senate, where it will be heard next by the Judiciary Committee.