Short-term rental taxes in Arkansas start at a combined 8.5% at the state level: 6.5% in state sales tax plus a 2% tourism tax on the lodging charge. City and county taxes add roughly 0% to 5% more depending on where the property sits, so the all-in rate a guest sees at checkout depends on the address. If you rent through Airbnb, the platform collects and remits those taxes for you. If you book guests directly, you collect and remit them yourself.
The 6.5% State Sales Tax on Lodging
Arkansas treats furnishing a room, condo, townhouse, rental house, or any other accommodation to a transient guest as a taxable service.1Legal Information Institute. Arkansas Gross Receipts Tax Regulations – GR-8 Services Subject to Tax The base gross receipts rate is 6%, with additional state levies bringing the combined state rate to 6.5%.2Code of Arkansas Rules. 26 CAR 30-103 – Amount and Nature of Tax
The tax applies to your gross receipts, which means the full rental charge before any expenses. Charge a guest $150 a night and you owe the state 6.5% of that amount. It doesn’t matter whether you list on a platform or rent directly.
The 2% Tourism Tax
On top of the sales tax, Arkansas imposes a 2% tourism tax on the same lodging charge. The tax covers furnishing a condominium, townhouse, rental house, guest room, suite, or any other accommodation to a transient guest.3FindLaw. Arkansas Code 26-63-402 – Tourism Tax
The tourism tax stacks. It is not an alternative to the sales tax; it is an additional charge collected on the same receipts.4Code of Arkansas Rules. 26 CAR 30-1407 – Tourism Tax That is how every booking carries at least 8.5% in state tax before a single local rate is added.
Local City and County Taxes
Arkansas cities and counties set their own sales tax rates, and those rates sit on top of the state rate. The local add-on can range from zero in some rural areas to roughly 5% in the most heavily taxed jurisdictions. A property in Little Rock, for example, owes an additional 1.5% city tax and 1% county tax on each booking. A property in a county with no city tax owes only the county’s rate.
Some cities also levy a local advertising and promotion tax or a tourism-specific tax that applies to short-term lodging. These are separate from the general local sales tax and fund local tourism efforts. Before you set your checkout totals, call your city clerk and county clerk to confirm every rate that applies at your address. The rates and the mix of taxes differ from one municipality to the next, and this is where operators most often come up short at audit.
A Note on the 1% Short-Term Rental Tax
Arkansas has a separate 1% tax on short-term rentals of tangible personal property under Arkansas Code 26-63-301, meaning physical items like construction equipment or party supplies rented for less than 30 days. It does not apply to vacation rental lodging. Lodging is covered by the sales tax and tourism tax above, and property already subject to the 2% tourism tax is specifically excluded from the 1% rental tax.5Justia. Arkansas Code 26-63-301 – Short-Term Rentals of Tangible Personal Property – Definitions Operators sometimes assume the “short-term rental” label in that statute refers to them. It doesn’t.
Registering with the DFA and Filing Returns
You need a sales tax permit from the Arkansas Department of Finance and Administration before you collect any tax from a guest. Register online through the DFA’s Taxpayer Access Point. Once you’re registered, the DFA assigns a filing frequency based on your expected tax liability. Most operators file monthly; lower-volume rentals may be assigned quarterly or annual filing.6Arkansas Department of Finance and Administration. Sales and Use Tax FAQs
File every period, including the quiet ones. If the property sat empty all month and you collected nothing, you still owe a zero-dollar return as long as the permit is active. Skipping a return because you had no revenue is a common and expensive mistake. Keep records of every booking, every dollar of tax collected, and any exemption you claim. The DFA audits rental operators, and clean documentation is the difference between a short review and a serious assessment.
When Airbnb or Another Platform Collects for You
Listing on Airbnb changes the mechanics. The platform collects the 6.5% state sales tax, the 2% tourism tax, and the applicable city and county taxes at checkout and remits them directly to the DFA on your behalf. Arkansas requires marketplace facilitators that exceed $100,000 in sales or 200 transactions in the state during the current or previous year to collect and remit sales and use tax. A host who sells only through a qualifying marketplace generally doesn’t count those platform bookings toward their own nexus thresholds.
The catch is direct bookings. If you take reservations outside the platform, by email, phone, or your own website, you are responsible for collecting and remitting every applicable tax on those stays yourself. And platform collection does not transfer the ultimate liability. If the taxes weren’t properly handled on a booking, the DFA can still come to the operator. Understand what’s owed on every reservation, not just the ones the platform touches.
Penalties for Late Filing and Late Payment
Falling behind gets expensive quickly. If you fail to file a required return on time, the state adds a 5% penalty on the tax owed for the first month, with another 5% for each additional month the return remains unfiled, up to a maximum of 35%.7FindLaw. Arkansas Code 26-18-208 – Penalties
The failure-to-pay penalty mirrors it. File on time but don’t pay what the return shows and the penalty is 5% of the unpaid amount for the first month, 5% for each additional month, again capped at 35%.7FindLaw. Arkansas Code 26-18-208 – Penalties Interest accrues on top. The DFA can waive penalties for reasonable cause, but not knowing the rule is rarely accepted. For an operator collecting $2,000 a month in tax, a six-month lapse adds up to $700 in penalties before interest, straight off the bottom line.