LITTLE ROCK, Ark. – Arkansans could soon see changes to their receipts when they buy groceries and school supplies. 

The two items were on a list of proposed sales tax exemptions lawmakers decided to put under further review Wednesday. 

The 16-member Tax Reform and Relief Task Force ultimately voted to further review the Back-to-School Sales Tax Holiday law, which the legislature passed in 2011.

Many lawmakers agreed the tax holiday costs the state a lot, $1.8 million according to the Department of Finance and Administration, for hardly anything back. They want to get that number from the department to see whether it generates enough business to justify the reduction in revenue. 

The task force also decided to review the reduced sales tax on groceries with some sort of help for low to moderate-income earners, either a refundable income tax credit or an earned income tax credit.

However, one state representative threw out a third option: a sales tax credit.

“We all know there would be a new tax burden for families that purchase food so to deal with that, let’s invent something brand new not take another complex thing and try to morph it,” St. Rep. Charlie Collins, R-Fayetteville, told his colleagues. 

Before they started tackling all 43 sales tax exemption proposals, lawmakers decided to adopt the motion St. Sen. Bart Hester, R-Cave Springs, made that the money from any exemption cuts would go to tax relief. 

“It would be hard to pin that money down I would say if it does get back in general revenue,” said Jeff Rutledge, the chairman of the Arkansas Rice Federation. 

Rutledge’s main reason for coming to the task force’s meeting was to make sure the state’s agricultural industry gets treated like the manufacturer it is. A good chunk of the 43 items on the list would affect farmers, including exemptions on the sales of seed to be used in the commercial production of any agricultural product or agricultural seed, and the sale of feedstuffs used in commercial production of livestock or poultry.

“My favorite quote from John F. Kennedy is, ‘The American farmer is the only man in our economy who buys everything retail, sells everything wholesale and pays the freight both ways,’ so that kind of sums up where we are,” Rutledge said. 

The task force voted to refine not remove the sales tax exemption for four-wheelers and ATVs for farm use to make sure it can only apply to farmers. Lawmakers hope to avoid abuse among consumers and salesmen. 

Members also decided to review the exemption on services provided by coin-operated car washes. Sen. Hester told his colleagues some of his constituents who own these companies want an all or nothing tax approach. 

The final item the task force voted to review was the proposal to repeal any sales tax exemption of less than $10,000 for tax years starting on or after Jan. 1, 2019. 

The group made it through about half of the proposed sales tax exemptions Wednesday and plan to pick up where they left off Friday. 

Members meet Thursday to start compiling their list of proposed individual and corporate income tax exemptions to consider at their May meeting.