What Are the Taxes in Arkansas? Income, Sales, and Property

Arkansas taxes work out to a graduated individual income tax with a top rate of 3.9%, a 6.5% state sales tax that stacks with local rates typically running another 1% to 3.5%, property tax calculated on 20% of a home’s market value, a graduated corporate income tax topping out at 4.3%, and excise taxes on motor fuel, tobacco, and alcohol. There is no state estate or inheritance tax.

Individual Income Tax

Arkansas runs two different bracket tables depending on your net income. If you make $92,300 or less, you use a wider table with a zero-percent floor. Above $92,300, a shorter table applies that pushes almost everything to the top rate.¹

For net income of $92,300 or less (2025 tax year):

$0–$5,499: 0%
$5,500–$10,899: 2%
$10,900–$15,599: 3%
$15,600–$25,699: 3.4%
$25,700–$92,300: 3.9%

For net income above $92,300:

$0–$4,600: 2%
$4,601 and above: 3.9%

The 3.9% top rate took effect retroactively as of January 1, 2024 under HB 1001, which cut the previous top rate of 4.4%.¹ You can lower taxable income with either the standard deduction or itemized deductions, and the legislature adjusts thresholds periodically, so verify current figures with the Department of Finance and Administration before you file.

Retirement Income Breaks

Social Security benefits are fully exempt from Arkansas income tax.² The first $6,000 of distributions from an IRA or from any public or private employer-sponsored retirement plan is also exempt, covering traditional IRAs, pensions, and 401(k) distributions regardless of how the plan is funded.³ Together these exemptions can wipe out state income tax for retirees living on Social Security and a modest pension.

Filing Deadline

Arkansas returns are due April 15, matching the federal deadline. An accepted federal extension automatically extends your state deadline to November 15 for most individuals. For a state-only extension, file Arkansas Form AR1055 by April 15.⁴ An extension gives you more time to file, not more time to pay. Interest and penalties on unpaid tax start running April 16.

Sales and Use Tax

The state sales tax rate is 6.5% on most retail purchases of tangible goods and certain services.⁵ Cities and counties add their own on top. Local rates typically run 1% to 3.5%, so combined rates at the register commonly land between 8% and 10%.⁶

If you buy from an out-of-state or online seller that doesn’t collect Arkansas tax, you owe use tax at the same combined state and local rate. Most large online retailers now collect automatically, but smaller sellers and private out-of-state purchases can still leave you with a reporting obligation.⁵

Groceries

Starting in 2026, Arkansas eliminated the state sales tax on food and food ingredients. The state portion had been down to 0.125%. Local sales taxes still apply to groceries in full, so tax on food at the register depends on your city and county. Restaurant meals remain subject to the full 6.5% state rate plus local tax.

Services That Get Taxed

Arkansas taxes a broader range of services than most states. Repair and maintenance on vehicles, appliances, electronics, boats, furniture, and machinery are taxable. So are lawn care, landscaping, janitorial and cleaning services, pest control, dry cleaning, pet grooming, kennel fees, towing, locksmith work, self-storage, alarm monitoring, indoor tanning, and health club memberships.⁷ When you budget a home repair or landscaping job, add the combined state and local rate to the labor portion.

Annual Sales Tax Holiday

Arkansas waives state and local sales tax on qualifying items for two days each August. In 2026 the holiday runs from 12:01 a.m. Saturday, August 1 through 11:59 p.m. Sunday, August 2.⁸ Exempt categories:

Clothing items under $100 each
Clothing accessories under $50 each (sunglasses, watches, briefcases)
School supplies (binders, notebooks, pencils, crayons)
School art supplies (paints, clay, brushes)
Instructional materials (textbooks, workbooks, reference books, maps, globes)

Laptops, tablets, and calculators are not on the exempt list.

Property Tax

Property taxes in Arkansas are collected locally to fund schools, roads, and municipal services. Your bill depends on two figures: assessed value and the local millage rate. Arkansas assesses property at 20% of market value.⁹ One mill equals one dollar of tax per $1,000 of assessed value. A home appraised at $200,000 has an assessed value of $40,000, so at a 50-mill rate the annual bill runs $2,000 before credits.

Amendment 79 caps how fast the taxable assessed value can rise after a reappraisal. For a homestead used as your principal residence, the cap is 5% per year. For all other real property, the cap is 10% per year.¹⁰ The value catches up to market over several years, but you avoid a sudden spike.

Homestead Credit

If you live in your home as a primary residence, you qualify for the homestead property tax credit. Beginning with 2026 bills, the credit is worth up to $600, up from the previous $500 cap.¹¹ The credit does not apply to rental or commercial property.

Senior and Disabled Homestead Freeze

Homeowners who are 65 or older, or who are disabled, can freeze their homestead’s taxable assessed value. The freeze locks the value at the assessment date after you turn 65 or become disabled. Buy a new homestead later and the freeze reapplies at the next assessment date after purchase. There is no income limit; you just need to meet the age or disability requirement and already qualify for the homestead credit.¹¹

Disabled Veterans Exemption

Veterans with a 100% service-connected permanent and total disability rating from the VA are exempt from all state taxes on their homestead (the principal residence plus up to 40 contiguous acres not used commercially) and on personal property used for non-commercial purposes. You claim it by providing your county collector with a VA verification letter. The exemption follows the veteran to any Arkansas homestead.¹²

Personal Property Assessment

Arkansas taxes personal property including vehicles, motorcycles, boats, and trailers. You must assess your tangible personal property with the county assessor between January 1 and May 31 each year. Miss May 31 and a 10% penalty is added to your assessed value.¹³ The same 20% ratio and local millage rate apply. This is separate from vehicle registration, and skipping it is one of the most common mistakes new residents make.

Corporate Income and Franchise Tax

Corporations pay a graduated income tax on net income from Arkansas sources. For tax years beginning on or after January 1, 2024:¹⁴

First $3,000: 1%
$3,001–$6,000: 2%
$6,001–$11,000: 3%
Over $11,000: 4.3%

These rates apply to C-corporations. S-corporations and partnerships don’t pay the corporate tax directly; their income flows through to owners’ individual returns.

Every corporation authorized to do business in Arkansas also owes an annual franchise tax. The minimum is $150 for corporations with authorized stock and $300 for those without. The report for the prior year is due by May 1.¹⁵ Missed filings trigger penalties, and continued noncompliance can cost you good standing with the Secretary of State.

Excise Taxes

Gasoline is taxed at 24.7 cents per gallon and clear diesel at 28.5 cents per gallon for the period October 1, 2025 through September 30, 2026. Those figures include the combined motor fuel, special motor fuel, and wholesale taxes and are built into the pump price.¹⁶

Cigarettes carry a $1.15 per pack excise tax, collected through stamps affixed by licensed wholesalers.¹⁷ Other tobacco products, including smoking tobacco, moist snuff, and most cigars, are taxed at 68% of the manufacturer’s invoiced selling price before discounts. Premium cigars are taxed at 50 cents per cigar plus 2% of the manufacturer’s price.¹⁸

Alcohol is taxed per gallon by type:¹⁹

Spirits over 21% alcohol: $2.50 per gallon
Spirits 5%–21% alcohol: $1.00 per gallon
Spirits under 5% alcohol: $0.50 per gallon
Wine: $0.75 per gallon
Light wine and wine coolers: $0.25 per gallon
Beer and malt beverages: approximately $0.24 per gallon

No Estate or Inheritance Tax

Arkansas does not levy a state estate tax or inheritance tax. The state repealed its estate tax for deaths after January 1, 2005. Federal estate tax still applies if an estate exceeds the federal exemption, but no separate state-level death tax runs on top.

1
Arkansas Economic Development Commission. Personal Income Tax
2
Arkansas.gov. Moving to Arkansas – A Tax Guide for New Residents
3
Justia Law. Arkansas Code 26-51-307 – Retirement or Disability Benefits – Definition
4
Arkansas Department of Finance and Administration. Deadlines and Extensions
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Arkansas Department of Finance and Administration. Sales and Use Tax FAQs
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Arkansas Department of Finance and Administration. Arkansas Rules – Gross Receipts Tax Rules
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Code of Arkansas Rules. Services Subject to Tax – Taxable Services
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Arkansas Department of Finance and Administration. Arkansas Sales Tax Holiday – August 1 and 2, 2026 Instructions for Retailers
9
Cornell Law School. 177.00.99 Ark. Code R. 001 – Assessment Coordination Department Rules and Regulations Manual
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Arkansas Department of Finance and Administration. Property Tax FAQs
11
Arkansas Department of Finance and Administration. Property Tax Relief
12
Justia Law. Arkansas Code 26-3-306 – Disabled Veterans, Surviving Spouses, and Minor Dependent Children – Definitions
13
Justia Law. Arkansas Code 26-26-1408 – Assessment of Tangible Personal Property
14
Justia Law. Arkansas Code 26-51-205 – Corporations – Work Force 2000 Development Fund
15
Arkansas Secretary of State. Annual Corporation Franchise Tax Report 2026
16
Arkansas Department of Finance and Administration. Arkansas Motor Fuel Tax Rates – October 1, 2025 Through September 30, 2026
17
Arkansas Department of Finance and Administration. Cigarettes Tax
18
Arkansas Department of Finance and Administration. Other Tobacco Products Tax
19
Arkansas Department of Finance and Administration. Miscellaneous Tax Descriptions