“The Arkansas Policy Foundation estimates that a family of four will save $234 a year on grocery bills atone, a significant savings in a state where the average taxpayer shells out $3,088 a year in state and locaf taxes.•

The Wafl Street Journal, Feb. 13, 2007

(Feb. 15, 2007) Arkansas Gov. Mike Beebe signed into law today the bigQ$st tax cut in Arkansas history, a 50 percent reduction ill. the state sales tax on groceries that will save taxpayers nearly

$200 million.annually. The measure, which takes.effect in–July, will reduce the sales tax on groceries from six to three percent. Beebe, a Democrat, has pledged to phase-out the tax.

A fiscal package including the grooety tax cut also features measures to increase the homestead property tax exemption.from

$300 to $350; reduce the sales tax on energy used by manufacturers from six to four percent; and exempt Arkansans

earning less.then the federal.poverty.level from state.income tax.

State Sen. Bobby Glover, D-Car1isle, sponsor of the measure, cited the Policy Foundation during debate on the issue.

 

The Policy Foundation has published five research memos on the grocery tax since 2002:

 

  • “Policy Backgrounder: Sales Tax Repeal On Food” (2002)
  • “Free Market Economists And The Sales Tax On Food” (2002)
  • “Road Map For Arkansas Prosperity” (December 2006)
  • “Foundation Releases Grocery Tax Proposal’ (December 2006)
  • “A Middle Class Tax Cut” (January 2007)

These and other research are available for free to citizens who contact the Policy Foundation.