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Committee moves bill clarifying sales-tax exemption for school cafeteria contractors
Summary
House Bill 18 51, which clarifies that contracted school cafeteria services remain eligible for a long-standing sales-tax exemption, passed the committee after testimony from DFA and the ASU system clarifying the measure is meant as an update to 1941 law.
House Bill 18 51 passed a Senate committee after brief testimony clarifying that the measure updates a 1941 sales-tax exemption for school cafeterias so that schools that contract food services with for-profit vendors retain the exemption.
State Senator Justin Boyd presented the bill; Ali Shawson Smith of the Department of Finance and Administration and Shane Broadway of the Arkansas State University system answered committee questions. DFA staff explained the bill clarifies that use of a for-profit contractor does not remove the schoolor college cafeteriafrom the exemption that has existed since 1941.
Sponsors said the change is an update to modern contracting practices and that the green-sheet fiscal analysis showed no taxpayer impact. The committee voted to pass the bill by voice vote.
