New Year brings grocery tax relief, workforce and health care laws in Arkansas

As the new year begins, Arkansans will see sweeping changes to taxes, health care coverage, and business incentives as a new set of state laws takes effect on Jan. 1, including the elimination of the state sales tax on groceries.

Most legislation approved during the 2025 Regular Session of the Arkansas General Assembly became law 90 days after lawmakers adjourned. However, many measures were delayed until the start of 2026 to allow state agencies, businesses, insurers, and consumers time to prepare.

According to a release from the Arkansas House of Representatives, the most significant change removes food and food ingredients from the state sales and use tax, effectively ending Arkansas’ state grocery tax. Lawmakers said the move is aimed at lowering the cost of everyday necessities and providing ongoing financial relief for households statewide.

Because groceries are a recurring expense, supporters say eliminating the state tax will have the greatest impact on working families, seniors on fixed incomes, and residents most affected by rising food prices. Local sales taxes on groceries will remain in place.

Several laws taking effect Jan. 1 are designed to bolster Arkansas’ economy and workforce. Changes to the state’s incentive structure expand how investment tax credits may be used, create new incentives for companies that relocate corporate headquarters to Arkansas, and add accountability requirements tied to job creation and payroll commitments.

Farmers will also see changes under a new sales tax identification card intended to simplify the process of claiming eligible exemptions. In addition, updates to the state-maintained job board are aimed at better connecting job seekers with available employment opportunities.

Health care coverage is another focus of the new laws. Beginning Jan. 1, health benefit plans will be required to cover a range of services, including childbirth at licensed birthing centers, treatment for acquired brain injuries, breast reconstruction surgeries, breastfeeding and lactation services, genetic testing, and certain cancer screenings.

Coverage requirements will also include lung cancer screenings and treatment for severe obesity under specified conditions.

A complete list of laws taking effect Jan. 1, along with details on how the changes may affect individuals, families and businesses, is available at arkansashouse.org.