New Tax Goes on the Books in Arkansas Today

JULY 1, 2004 - Posted at 7:35 a.m. CDT

LITTLE ROCK, AR - Business owners across the state are sweating the possible effects of a nearly ten percent price increase that goes into effect today.

Thousands of businesses statewide will have to add state and local sales taxes to the services they sell under a recent state law that extends the taxes to services not previously taxed.

The Legislature raised the state sales tax this year from 5.125 percent to six percent to generate additional revenue for a court-ordered public education overhaul.

Expanding the higher sales tax to services from dry cleaning, body piercing, and campground rentals to pet grooming, security system monitoring and wrecker and towing services, will add about $24 million annually to the $370 million in new taxes the Legislature raised this year to pay for overhauling an unconstitutional state public education system.

(Copyright 2004 by The Associated Press.  All Rights Reserved.)