Arkansas Moves Into 2026 With New Health Care and Tax Laws in Place

A wide range of new state laws, approved by legislators and signed by Gov. Sarah Huckabee Sanders, will take effect on January 1. These measures cover taxation, health care, agriculture, workforce regulations, public safety, and election oversight, all of which have broad public appeal.

While it is common for new laws to begin at the start of the year, political analysts note that many of these changes provide direct benefits to residents and their families and come at a politically significant time during an election year. Alongside these state-level measures, several federal policy changes, particularly in health care, are also scheduled to take effect in 2026. Together, these developments are expected to draw public attention and influence Arkansas voters.

Families See Relief With Grocery Tax Repeal

One of the most widely discussed changes is the elimination of the state grocery tax. Act 1008 removes Arkansas’ 0.125 percent state sales tax on groceries by striking the provision from state law, while leaving local sales taxes unchanged.

State leaders, including Governor Sarah Huckabee Sanders, have highlighted the repeal as a way to help families manage rising costs. According to the Economic Policy Institute, the average adult in Northwest Arkansas spends about $340 per month on groceries, meaning removing the state tax would save roughly 42 cents per month.

Scott Hardin, a spokesperson for the Arkansas Department of Finance and Administration, explained that it is not something people notice immediately, but over time the savings add up. Spending $100 or $200 on groceries can result in saving a few dollars over several trips.

New Incentives Aim to Boost Arkansas Businesses

Several newly enacted laws revise existing tax credits and introduce new incentives aimed at encouraging economic development across Arkansas.

Acts 701 and 709 update the Arkansas Wood Energy Products and Forest Maintenance Income Tax Credit. The revisions allow wood byproducts to qualify under the program, raise the required investment amounts, and increase job creation thresholds for eligible projects. At the same time, the laws reduce the total income tax credit available to participating businesses.

Another measure establishes a new income tax credit intended to attract corporate headquarters to the state. Under Act 881, a corporation that relocates to Arkansas may qualify for a credit of up to 50 percent of payroll costs for new full time permanent employees. To be eligible, companies must meet specific requirements, and the director of the Arkansas Economic Development Commission may approve an additional tax credit of up to 10 percent.

Act 880 expands property tax exemption eligibility for disabled veterans. The law allows property owned by a trust or a limited liability company to qualify as a homestead for property tax exemption purposes, extending the benefit to disabled veterans, as well as to surviving spouses and minor dependent children in certain circumstances.

Act 903 establishes a farmer sales tax identification card for eligible farmers. The card can be presented when purchasing products and serves in place of an exemption certificate for claiming sales tax exemptions.

Another change, Act 912, affects charitable organizations. Under this law, a motor vehicle used exclusively for a public charity is exempt from property taxes. The exemption also applies to vehicles subject to a lease of at least 12 months by a public charity.

Health Care Changes Designed to Protect Families

Health related legislation was a major focus of the Arkansas General Assembly’s 2025 regular session. Many of the new laws taking effect in January are aimed at maternal health, preventive care, workforce support, and insurance coverage standards.

Act 16 establishes a new blue envelope program designed to improve safety during traffic stops for people on the autism spectrum. Drivers or passengers can use the blue envelope to alert law enforcement officers of their condition. The envelopes will be available at every state revenue office beginning January 1, 2026, and no physician note is required.

According to the Autism Society, between 30 and 50 percent of individuals killed by law enforcement are autistic or have other disabilities. The organization notes that “these devastating outcomes occur when police misinterpret benign autistic behaviors as suspicious, evasive, or dangerous.”

Several new laws mandate expanded insurance coverage for specific medical services.

Act 390 requires health plans, as well as Medicaid and ARHOME, to cover lung cancer screenings and related follow up services in line with American Cancer Society guidelines. The law prohibits additional cost sharing for those services.

Act 424 defines breast reconstruction surgery for insurance coverage purposes and requires insurers to cover all stages of reconstruction following trauma, disease, or mastectomy. Coverage also applies to procedures performed to reduce the risk of future breast disease.

Act 627 mandates coverage for breastfeeding and lactation consultant services provided in outpatient settings. The requirement applies to health plans, Medicaid, ARKids First, and ARHOME. The coverage is not subject to annual deductibles, copayments, or coinsurance.

Act 628 requires health plans to cover medically necessary treatment for diseases and conditions caused by severe obesity for adults age 18 and older. Covered services include bariatric surgery and related care. The law specifically excludes coverage for injectable drugs used to lower glucose levels and other medications prescribed for weight loss.

Insurance coverage will also expand for certain genetic and imaging services. Act 860 requires insurers to cover genetic testing for inherited cancer related gene mutations when clinically indicated, as well as specified evidence based cancer imaging for individuals at increased risk of cancer.

Act 866 mandates coverage for deliveries at licensed birthing centers under health benefit plans, Medicaid, and the Arkansas Health and Opportunity for Me program. Coverage must be equivalent to hospital based deliveries. Arkansas currently does not have a licensed birthing center, but the law establishes coverage standards if one is licensed in the future. The law also requires coverage for all modalities, types, and techniques of health care services related to breast reconstruction surgeries.

Act 875 increases the disability onset age from 26 to 46 for eligibility under the Achieving a Better Life Experience Program. Individuals whose disability occurred before age 46 may qualify to establish tax advantaged savings accounts to pay for eligible expenses.

Several federal health policy changes scheduled to take effect on January 1, 2026, will affect Arkansans alongside the new state laws.

Changes to federal Health Insurance Marketplace rules will remove the cap on premium tax credit repayments. As a result, some enrollees may owe more at tax time if their actual income exceeds the amount used to calculate subsidies. This could increase financial risk for individuals with fluctuating incomes.

Medicare will also see changes. The Centers for Medicare and Medicaid Services will launch the Wasteful and Inappropriate Service Reduction Model, a pilot program introducing new prior authorization requirements in traditional Medicare. The model will begin in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington.

Beginning in 2026, Medicare will apply negotiated drug prices to the first group of Part D medications selected under the Inflation Reduction Act. The initial list includes 10 high cost drugs commonly used to treat chronic conditions.

Laws Expanding Oversight and Public Protections

Several other laws passed during the 2025 legislative session will also take effect in January.

A new foreign influence law requires individuals representing certain foreign nations or political organizations to register with the state. The law identifies China, Russia, North Korea, and Iran as hostile foreign nations. It mandates reporting political donations and funding to the Secretary of State’s office, while activities involving agricultural land must be reported to the United States Department of Agriculture. Supporters say the law enhances transparency and helps protect elections.

Act 427 establishes the Strengthen Arkansas Homes Program, allowing state officials to provide financial grants to eligible property owners and nonprofit organizations. The program is designed to help reduce damage to insurable homes from catastrophic wind events. Act 631 enables recipients of Supplemental Nutrition Assistance Program (SNAP) benefits to meet work requirements by volunteering at public entities that receive state funding. Act 708 updates rules for unemployment benefits, requiring recipients to report at least five work search contacts per week, while the state job board must match available jobs with individuals receiving benefits.

Act 748 allows a law enforcement agency that trained an officer to seek reimbursement from another agency that employs the officer within 24 months of completing the training. Act 948 prohibits state entities from hiring unauthorized aliens. Together, these measures aim to strengthen public programs, enhance accountability, and ensure compliance with state employment and safety standards.

Taken together, these laws signal a year of change for Arkansas, touching everyday life while reflecting larger political priorities. How residents experience these shifts may well define the state’s conversations and choices in the months ahead.