Beebe Signs Bill to Cut Grocery Taxes by Half

FEBRUARY 15, 2007 - Posted at 10:47 a.m. CST

LITTLE ROCK, AR - Governor Beebe has signed into law this morning a 50 percent cut in the sales tax on groceries, making it the largest tax cut in Arkansas history.

The tax will drop from six percent to three percent, starting on July 1.

Before the legislative session began, Beebe had predicted he would have a fight on his hands to get the tax cut passed.  In his state of the state address, Beebe reiterated his campaign promise to do away with the sales tax on groceries.

Beebe said the first step would be cutting it in half and pledged to seek its full revocation by the end of his four-year term.

But Beebe didn't get a fight in the Legislature.  He did have to agree to some other tax cuts, one for manufacturers and one for the working poor, and the sales tax cut sailed through both houses.

The tax cut will reduce Arkansas revenues by $252 million over the next two years.  With the cut, the typical Arkansas family would save $234 annually on its grocery bills, according to the Arkansas Policy Foundation.

(Copyright 2007 by The Associated Press.  All Rights Reserved.)