State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2021

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
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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 a bit complicated in Arkansas, as the state uses different rate schedules depending on your income. But there's some recent relief for high earners: For 2021 taxes, the top rate dropped from 6.6% to 5.9%, and it drops again in 2022 (to 5.5%) and 2023 (to 5.3%), with additional rate reductions possible in 2024 and 2025.

Income Tax Range

Low: 2% (on taxable income from $4,800 to $9,499 for taxpayers with net income less than $23,600), 0.75% (on first $4,799 of taxable income for taxpayers with net income from $23,600 to $84,500), or 2% (on first $4,300 of taxable income for taxpayers with net income over $84,500)

High: 3.4% (on taxable income from $14,300 to $23,599 for taxpayers with net income less than $23,600), 5.9% (on taxable income from $39,700 to $84,500 for taxpayers with net income from $23,600 to $84,500), or 5.9% (on taxable income over $8,500 for taxpayers with net income over $84,500)

Beginning in 2022, the 2% rate will apply to net income of $5,000 to $9,999 for people with net income of $84,500 or less and to the first $4,300 of net income for people with net income greater than $84,500. The top rate will drop to 5.5% and apply to net income of $39,700 to $84,500 for people with net income of $84,500 or less and to the net income over $8,500 for people with net income greater than $84,500.

Beginning in 2023, the top rate is reduced again to 5.3%. If no funds are transferred from the state's Catastrophic Reserve Fund by certain dates, the top rate will drop again to 5.1% for 2024 and to 4.9% for 2025 and thereafter.

Sales Tax

6.5% state levy. Localities can add as much as 6.125%, and the average combined rate is 9.47%, 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; 3.5% state rate on used motor vehicles priced from $4,000 to $10,000)
Prescription Drugs: Exempt

Real Property Taxes

In Arkansas, the median property tax rate is $620 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): $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.