Arkansas to Exempt Food and Food Ingredients from State Sales Tax

Effective January 1, 2026, Arkansas has enacted the Grocery Tax Relief Act to exempt sales of food and food ingredients from state-level sales and use tax. Per the legislation, local sales and use taxes will continue to apply to sales of food and food ingredients.

The exemption does not apply to sales of prepared food. The legislation specifies that “prepared food” does not include the following items, so they are included in the exemption:

• Food that is only cut, repackaged, or pasteurized by the seller; or
• Eggs, fish, meat, and poultry, and foods containing these raw animal foods requiring cooking by the consumer to prevent food-borne illnesses.

Sellers of food and food ingredients will want to make special note of these items to ensure that exemptions are applied properly effective January 1, 2026. (Act 1008 (H.B. 1685), Laws 2025, effective January 1, 2026)