Ruling Stops Collection Of Hospital Sales Tax For Now

A sales tax that was supposed to be collected for Crittenden Regional Hospital won’t be collected at least until voters can make their decision later this year, a circuit judge ruled Friday.

The Arkansas Department of Finance and Administration sent out a notice Tuesday, notifying the public about the decision by Circuit Judge Victor Hill.

Hill ruled late Friday in favor of a temporary restraining order, stopping the county from collecting the one-cent sales tax.

State Sen. Keith Ingram, D-West Memphis, filed suit Aug. 28 in circuit court at Marion against the Arkansas Department of Finance and Administration.

Crittenden County voters earlier this year approved the tax to help with the maintenance of the hospital. However, the hospital closed in early September.

At the time, hospital officials said the closure was due to financial issues and not having enough working capital to keep the hospital open until the sales tax could be collected.

Crittenden County justices voted this month to set a Dec. 9 special election to decide whether the tax would be abolished or maintained.

Ingram said Tuesday that the collection of a tax for a hospital that does not exist would have “broken the faith with voters.”

The tax, which would have raised the county sales tax rate to 2.75%, would have been collected until April 2015, Ingram said.

With the decision Friday, the county sales tax rate will remain at 1.75%, state officials said.

The hospital does have funding from a county millage, Ingram said, noting $250,000 has been collected to help with the maintenance and upkeep with the facility.