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Arkansas Voters Approve Tax Increase to Fund Roads

  • Nov 8, 2012 | Gail Cole

Arkansas voters want better roads, and they're willing to pay for them. Issue No. 1, "An Amendment to Provide Additional Funding for Highways, County Roads, City Streets, Bridges, and Surface Transportation," was resoundingly approved during the November 6 election. 58% of Arkansans voted in favor of Issue 1, while 42% opposed it.

As a result, the Arkansas state sales tax will increase to 6.5% from 6%, effective July 1, 2013.

The new tax will be temporary and will endure for "approximately ten" years, or until "payment in full" of the bonds issued to pay for the work "shall terminate the temporary sales and use tax… ." (Joint House Resolution 1001). The measure reads:

"If bonds are issued under this amendment, the temporary taxes levied under this amendment shall be abolished when there are no bonds outstanding to which tax collections are pledged… ." (Section 8(a)).

Highway Commission Chairman Madison Murphy has said that projects funded by Issue 1 "will relieve traffic congestion and improve safety" while "taxes will not be raised on groceries, medicine, gasoline, or diesel fuel." He added that the temporary tax "does create and support 40,000 private sector jobs." (Arkansas News).

Revenue generated by the sales tax increase will fund the widening of Interstate 540 between Fayetteville and Bentonville, and the widening of Interstate 40 between Conway and Little Rock. Other projects funded by Issue 1 include four-lane roads connecting Jonesboro and Paragould to U.S. 67/167 and Interstate 55.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.