Arkansas Sales Tax on Vehicles: Rates, Local Caps, and Penalties

Arkansas sales tax on vehicles is 6.5% at the state level for new vehicles and used vehicles priced at $10,000 or more, with a reduced 3.5% state rate on used vehicles priced $4,000 to $9,999 and no state tax at all on vehicles under $4,000. Local city and county taxes apply on top. You pay the tax directly to the Department of Finance and Administration (DFA) when you register the vehicle, not to the dealer, and you have 60 days from the purchase date to do it.¹

State Rates by Price and Condition

The rate depends on the sale price and whether the vehicle is new or used. Any vehicle sold for less than $4,000 is exempt from state sales tax entirely.² Above that threshold, new and used diverge.

New vehicles at $4,000 or more pay the full 6.5% state rate.² Used vehicles follow a tiered structure that took effect January 1, 2022:

Under $4,000: no state sales tax.
$4,000 to $9,999: 3.5% state rate on the full sale price.
$10,000 or more: 6.5% state rate on the full sale price.

The reduced 3.5% rate is a state-only benefit. Local city and county taxes are still calculated at their normal rates regardless of price.³ Which rate applies is set by the date of sale, not the date you register.

Local Taxes and the Vehicle Cap

Local sales taxes stack on top of the state rate and vary by city and county, adding a few percentage points to your total. Motor vehicles licensed for highway use still qualify for the local single-transaction tax caps that were eliminated for most other purchases in 2008.⁴ That cap keeps the local portion from climbing without limit on expensive cars and trucks.

How to Lower the Taxable Amount

Arkansas lets you subtract a trade-in from the purchase price and pay tax only on the difference.² Buy a $25,000 truck, trade in a car worth $10,000, and you owe tax on $15,000.

You do not have to trade in at the dealership to claim this benefit. If you sell your old vehicle privately and buy a replacement within 45 days, either before or after the sale, you can apply the private-sale proceeds as a credit against the taxable price of the new purchase.⁵ The credit cannot exceed the price of the new vehicle, but if the private sale brought in as much or more than the replacement, you owe no state sales tax.

Credits can stack. If you sell more than one vehicle inside the 45-day window, each sale counts toward the credit.⁵ If you place a binding order for a new vehicle and delivery takes longer than 45 days, the window runs from the order date, not the delivery date.

Manufacturer rebates and cash down payments do not reduce the taxable amount. A rebate is reimbursed by the manufacturer, which keeps it inside the sales price for tax purposes, and a bill that would have carved rebates out failed in the 2023 legislative session. Trade-ins and qualifying private-sale credits are the reliable ways to lower the base.

Gifts and Other Exemptions

A vehicle received as a gift can be tax-free, but only if both the donor and recipient sign an affidavit confirming the gift and the donor already paid sales or use tax when they originally registered the vehicle in their own name.⁶ Without those conditions, the state assesses tax based on the vehicle’s fair market value.

Vehicles sold to municipalities, counties, public school districts, and state-supported colleges are exempt.⁷ Active-duty military members stationed in Arkansas but domiciled in another state may qualify for exemptions under federal and state law.

Buying Out of State

If you purchase a vehicle in another state and bring it home to register, Arkansas use tax still applies. The use tax reaches any vehicle required to be licensed here, whether the seller was a dealer or a private party.¹ The same tiered rate structure applies. If you paid sales tax to the other state, Arkansas typically credits that amount, and you owe the difference if the other state’s rate was lower.

The 60-Day Deadline and 10% Penalty

You have 60 days from the purchase date to register the vehicle and pay the tax. If a prior lien had to be released, the 60 days run from the lien-release date instead.⁸ Driving on public roads after the 60 days without valid registration is not legal.

Miss the deadline and the DFA adds a penalty of 10% of the total tax due. On a $2,000 tax bill, that is an extra $200. The penalty and full tax must be paid before the state will issue a plate.¹ Registering now and paying later is not an option.

Payment is completed in person at any DFA Revenue Office. Some transactions can be handled through the state’s online portal, but initial registrations that involve title processing and document review generally go in person.

What to Bring and Other Fees

Come to the Revenue Office with everything on this list, because a missing item means a return trip:

Bill of sale showing the VIN, date of sale, purchase amount, and signatures of buyer and seller.
The current title signed by both parties, or a Manufacturer’s Statement of Origin for a new vehicle.
An odometer statement documenting mileage at transfer.
The retail installment contract if you financed.
Proof of Arkansas auto insurance on the vehicle.

If you are claiming a private-sale credit, bring documentation of the old vehicle’s sale, including the date and amount received.⁹

Sales tax is the largest line item, but not the only one. Arkansas charges a $10 title fee on every vehicle. Registration fees depend on type and weight:¹⁰

Passenger cars 3,000 lbs or less: $17.
Passenger cars 3,001–4,500 lbs: $25.
Passenger cars over 4,500 lbs: $30.
Trucks and vans (half-ton and three-quarter-ton): $21.
Motorcycles 250cc or more: $7.

These fees are paid alongside the sales tax and are separate from any dealer documentation fees or lender charges.

1
Justia. Arkansas Code 26-53-126 – Tax on New and Used Motor Vehicles, Trailers, or Semitrailers – Payment and Collection
2
Justia. Arkansas Code 26-52-510 – Direct Payment of Tax by Consumers
3
Arkansas Department of Finance and Administration. Recent Changes in the Law
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Arkansas Department of Finance and Administration. Sales and Use Tax FAQs
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Code of Arkansas Rules. 26 CAR 30-702 – Sales Tax Credit for Private Sale of a Used Vehicle
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Legal Information Institute. 006.05.08 Ark. Code R. 12 – Sale of Motor Vehicles, Trailers, and Semitrailers
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Justia. Arkansas Code 26-52-410 – Motor Vehicles Sold to Political Subdivisions and Schools
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FindLaw. Arkansas Code Title 27 Transportation 27-14-903
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Arkansas Department of Finance and Administration. Do You Have What You Need
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Arkansas Department of Finance and Administration. Motor Vehicle Registration Fee Schedule