Half Cent Sales Tax Goes Into Effect in Arkansas

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As of July 1st, the half cent sales tax voters approved in November 2012 went into effect for Arkansas consumers. The new sales tax will pay $1.8 billion in highway projects and it doesn't include purchases on groceries, gasoline or medicine.

John Theis, assistant revenue commissioner with the State Department of Finance and Administration, said the state sales tax went up from 6 percent to 6.5 percent. Theis said each city and county has can levy its own taxes above what the state has set.

Theis said the proceeds will be split between the Highway Department and cities and counties. Seventy percent will go to the highway department and 30 percent will be divided between the city and counties, he said.

Kim Agee, of Fayetteville, bought a new car over the weekend just before the new tax went into effect.

"One of the things that they said was that if you buy it today you avoid a half cent sales tax," Agee said.

This purchase saved Agee and his wife Janie some money in the long run.

"I saved $128, yes I did that math too," he said.

Randy Ort, with the Arkansas Department of Transportation, said he understands a tax hike always comes with resistance.

"Of course nobody likes a tax. Nobody likes to talk about it," Ort said. "We don't like to pay them, but in this case, I think the people of Arkansas saw the benefit of the projects that could be completed with this."

Justine Amanda Eakens, who lives in Fayetteville, said she can't wait for some of the projects to be complete.

"I've taken courses at NWACC too so I've driven all the way up there and I know traffic is really awful sometimes," Eakens said.

Projects include widening I-540 between Fayetteville to Bentonville, completing the Bella Vista Bypass and widening parts of I-40.

Even though, Kim Agee avoided paying some more cash on his car purchase, he looks forward to some relief on the roads.

"I think in general, transportation infrastructure suffers throughout Arkansas and I think Northwest Arkansas is no different than the rest of the state," Agee said.

The bonds are set to repaid in 10 years, at which point this temporary tax will go away.

Click here for a list of the projects.