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Saturday, Apr. 30, 2016

Groceries to cost a little less

Thursday, April 2, 2009

While a penny can't buy much anymore, they can still add up and that is exactly what Arkansas Governor Mike Beebe is hoping they'll do.

One of the big promises Beebe made while campaigning was to do away with the state's grocery tax. In 2007 he and the 86th General Assembly started to act on that promise by cutting the grocery tax from 6 cents to 3 cents.

This year Beebe, yet again, was successful in building on his promise. The House of Representatives voted 99 to 0 to cut the grocery tax again, bringing it from 3 cents to 2 cents.

While this cut is expected to cut the state's revenue by $40 million, Beebe said it is important to him to keep his promise in order to regain people's faith in their government.

"As important as a reduction in the grocery tax is, as important as any of the relief for any of those people is," Beebe said after signing the tax cut bill. "It's not nearly as important as keeping my word."

He said he understands that 1 cent is not that much, but if looked at accumulatively it does help. "How much does 4 cents help?" Beebe said. "I think you have to look at it as a whole, we've done 4 cents now and this further signals we're not going to quit (until there is no more grocery tax)."

The grocery tax is applied on a per dollar basis. So, currently, for every dollar spent on a food item the state taxes 3 cents. Before the 2007 tax cut Arkansas residents were paying 6 cents for every dollar spent.

The grocery tax applies to edible items only. Even though things like shampoo can be found in the grocery store, the tax does not apply to those items. The tax also does not cover prepared items, like what might be found in a deli, either.

It has been estimated that this tax cut could save the average family around $240 every year. The bill goes into effect July 1.

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