Legislator Proposes 4.5 Cent Cut in State's Sales Tax

JULY 3, 2006 - Posted at 7:31 a.m. CST

LITTLE ROCK, AR - A phased-in reduction of the state's six-cent sales tax on groceries has been proposed by a Republican legislator from Bentonville.  In principle, the measure has the support of both of this year's gubernatorial nominees from both political parties.

Represenative Horace Hardwick says his draft legislation would reduce the tax to one-and-a-half cents on on the dollar over three years.  He said he would file the proposed legislation for the legislative session that begins in January.

The draft legislation calls for reducing the state taxes on "the sale of food and food ingredients" by four-and-a-half cents.  The tax would be reduced by one-and-a-half cents, beginning July 1, 2007.  After that, it would drop by one cent each July 1 through July 1, 2010.

Hardwich said the bill, if approved, would cost the state about $200 million a year.  City, county and local taxes would not be affected by the proposal.

(Copyright 2006 by The Associated Press.  All Rights Reserved.)