There is a temporary ½ percent sales tax which is dedicated for highway funding. Part of Governor Asa Hutchinson’s highway tax plan calls for the passage of a new law to make the ½ percent sales tax permanent.
Governor Hutchinson doesn’t want to call it a “tax increase” and thinks “extension” sounds so much nicer.
Although the rate of the tax does not immediately change, once we reach 2023 when the tax is set to expire, the legislation would increase the tax rate from zero percent to ½ percent. That makes it a tax increase.
You only need to ask one question: Will it take more money out of my pocket in the long run? Yes, it does.