Arkansas State Tax: Overview
Arkansas state tax is a mixed picture. Sales taxes in Arkansas are relatively high. Income taxes are generally above average relative to other states. Arkansas income tax is based on different rate schedules depending on your income.
Arkansas's property taxes are among the lowest in the nation, and there are no estate or inheritance taxes when you die.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Arkansas State Tax: Income Taxes
Arkansas tax on retirement benefits: Social Security retirement benefits and Railroad Retirement benefits are tax-exempt. Retirees age 59.5 or older can exempt the first $6,000 of an IRA distribution. Up to $6,000 of income from private or government employer sponsored retirement plans is also tax-exempt in Arkansas.
Arkansas income tax rates currently max out at 4.7%. The top tax rate will reduce to 4.4% in 2024.
The table below shows 2023 Arkansas income tax rates for individuals with net incomes up to $84,500. Taxpayers with net incomes above this amount reach the higher tax brackets sooner.
Arkansas Income Tax Range: Individual with net income up to $84,500
| Up to $5,099 | 0% |
| $5,100 to $10,299 | 2% |
| $10,300 to $14,699 | 3% |
| $14,700 to $24,299 | 3.4% |
| $24,300 or more | 4.7% |
Arkansas Sales Tax
Arkansas has a 6.5% state levy. Localities can add as much as 6.125% to the state's tax rate, according to the Tax Foundation.
- Groceries are taxable at a reduced rate of 0.125%, but local taxes may also apply.
- Clothing is taxable.
- Prescription drugs are tax-exempt.
How Much Are Property Taxes in Arkansas?
In Arkansas, the average effective property tax rate is 0.62%, and the median property tax bill is under $1,000.
Arkansas Property Tax Breaks for Retirees
Age 65 Property Tax Relief: Residents 65 or older who qualify for the homestead exemption may also have the assessed value of their property frozen.
- Construction and "substantial improvements" may cause the assessed value of the property to increase.
- People with disabilities may qualify for the freeze regardless of age.
Arkansas Motor Vehicle Taxes
Motor vehicle purchases are subject to state and local sales taxes.
Arkansas taxes gasoline at $0.249 per gallon when considering the state excise tax and other state taxes and fees.
Arkansas Alcohol and Tobacco Taxes
| Cigarettes | $1.15 per pack |
| Other tobacco products | 68% of manufacturer's price |
| Beer | $0.23 per gallon |
| Wine | $0.75 per gallon |
| Liquor | $2.50 per gallon |
Arkansas Estate and Inheritance Taxes
Arkansas does not have an estate or inheritance tax.
Related Content
-
-
Chase Ink Business Cards Launch $900+ Offer
Chase Ink business credit cards offer new bonus amounts, solid cash back and perks.
-
Why Houses Make for Terrible Wealth Transfer Vehicles
Home may be where the heart is, but after it’s inherited, it’s where heirs have to manage upkeep and deal with family conflicts related to what to do with it. What should parents do instead?
-
A Little-Known Tax-Free Way To Help Pay Your Student Loan
Student Debt Employers can provide valuable assistance with employee student loan repayments.
-
Tax Tips for National Preparedness Month
Disaster Preparedness September is National Preparedness Month. These tips can help you secure important documents and information — before a disaster happens.
-
Places That Now Have More Time To Pay Estimated Tax
Tax Deadlines Estimated tax payments are due soon — September 15 in most cases. But many people have more time to pay the IRS due to natural disasters. Are you one of them?
-
IRS Announces Florida Tax Relief Following Hurricane Idalia
Tax Deadline In response to the severe damage caused by Hurricane Idalia, the IRS has extended tax deadlines for affected Floridians.
-
Will Your State Rebate Check Be Taxed for 2023?
State Rebates Here's what the IRS says about taxing 'state stimulus checks' and other special state rebates and what it could mean for you.
-
Most Expensive States for Millionaires in 2023
Income Tax If you earn a lot of money, you may want to avoid these most expensive states for millionaires. Some high earners in these areas could pay income tax rates greater than 50%.
-
Hawaii IRS Tax Deadline Extended After Devastating Wildfires
Tax Relief Some Hawaii tax deadlines have been extended by the IRS following devastating wildfires. Here's what impacted residents should know.
-
Best States for Middle-Class Families Who Hate Paying Taxes
State Taxes Here are the best states for middle-class families with "middle incomes" (due to low tax burdens).
