State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Arkansas State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Arkansas

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The Bottom Line
Flag of Arkansas

Mixed Tax Picture

Property taxes are low in the Natural State, but sales taxes are among the country's highest — even groceries are taxed (albeit at a lower rate). Income tax is particularly complicated in Arkansas, as the state uses multiple rate schedules that give it 16 different tax brackets in practice. Some relief is coming for high earners: In 2021, the top rate will drop from 6.6% to 5.9%.

Income Tax Range

Low: 2% (on taxable income from $4,500 to $8,899 for taxpayers with net income less than $22,200), 0.75% (on first $4,499 of taxable income for taxpayers with net income from $22,200 to $79,300), or 2% (on on first $4,000 of taxable income for taxpayers with net income over $79,300)

High: 3.4% (on taxable income from $13,400 to $22,199 for taxpayers with net income less than $22,200), 5.9% (on taxable income from $37,200 to $79,300 for taxpayers with net income from $22,200 to $79,300), or 6.6% (on taxable income over $79,300 for taxpayers with net income over $79,300)

Beginning in 2021, the top rate for taxpayers with net income over $79,300 will be 5.9% (on taxable income over $8,000).

A "bracket adjustment" of between $40 and $440 is subtracted from the amount of tax due for taxpayers with net income from $79,301 to $84,600.

Sales Tax

6.5% state levy. Localities can add as much as 5.125%, and the average combined rate is 9.51%, according to the Tax Foundation.

Groceries: Taxable (0.125% state rate; additional local taxes may apply)
Clothing: Taxable
Motor Vehicles: Taxable (6.5% state rate, or 7% in Texarkana, on purchase price of $4,000 or greater)
Prescription Drugs: Exempt

Real Property Taxes

In Arkansas, the median property tax rate is $612 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 24.8¢ per gallon.
Diesel: 28.8¢ per gallon.

Sin Taxes

Cigarettes: $1.15 per pack
Premium cigars (selling for more than $0.76 per cigar) are taxed $0.50 each plus 2% of the wholesale price.
All other tobacco products: 68% of the manufacturer's price

Beer: $0.24 per gallon
Wine: $1.44 per gallon
Liquor: $2.50 per gallon
Additional alcohol-specific sales taxes are due.

Annual Car Taxes and Fees

An annual vehicle property tax based on the car's value is imposed. Rates are set at the county level.

Estate and Inheritance Taxes

No estate or inheritance tax.


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