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Little Rock reflects on proposed grocery tax increase

The Tax Reform Task Force passed the idea of raising the grocery sales tax Wed., April 25. The task force still has to submit the sales tax increase for dynamic scoring this summer.

LITTLE ROCK, Ark. (KTHV) – Lawmakers are looking into raising the grocery sales tax in Arkansas to see if it will help the economy.

The Tax Reform Task Force passed the idea of raising the grocery sales tax Wed., April 25. The task force still has to submit the sales tax increase for dynamic scoring this summer.

"It affects our customer. So it affects us,” Lou Anne Herget said.

Herget owns Heights Corner Market, a small neighborhood grocery store in Little Rock. She said the potential for grocery sales tax to go up could have a big impact on her customer base.

"They don't ever want the prices to go up and we try and control the prices so if we've got to add a little bit more so they might think twice before picking up that second item,” Herget said.

The current grocery sales tax in Arkansas is set at 1.5 percent. The task force is looking into raising to 3 percent, 4.5 percent, or even as high as 6 percent.

"We'll see what kind of revenue that would bring in. How that would affect the economy,” Rep. Lane Jean, R-Magnolia, said.

Jean said the task force is sending its ideas for dynamic scoring to determine what the tax would be set at. He also said raising the grocery sales tax would help make up the revenue lost in income tax going down.

"We realize the fact that the people that are working, that are struggling, they need every dollar they can to make it,” he said.

Jean said the task force is looking into relief for low income families if the grocery tax increases.

"We want to give them some type of grocery tax credit to offset if we put it back on,” Jean said.

Herget said if the tax does go up, she will most likely have to reconsider the cost on her goods.

"It's like if you go out and buy a 100 dollar dress you've got to think actually that dress is 110, 111; it does stop you,” Herget said.

The task force will meet again in August to determine the new amount for the grocery tax if they decide to change it.

The task force would then present it to the legislature for the 2019 legislative session.

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