Arkansas Income Tax Calculator

Arkansas state tax quick facts Income tax: 1% - 6.9% Sales tax: 6.5% - 11.625% Property tax: 0.63% average effective rate Gas tax: 21.8 cents per gallon of regular gasoline, 22.8 cents per gallon of diesel

Residents of Arkansas face sales tax rates that are among the highest in the country. According to the Tax Foundation, the average sales tax rate in Arkansas in 2018 (including state and local taxes) is 9.41%, third highest of all U.S. states. On the other hand, homeowners in Arkansas pay the ninth lowest property taxes in the nation, at an average effective rate of just 0.63%.

Arkansas Income Tax

The table below shows the tax brackets for earners in Arkansas. All filing statuses face the same brackets and rates.

Tax rates are applied to net taxable income in Arkansas, which is total personal income adjusted for any deductions and exemptions. Taxpayers can claim either itemized deductions or the Arkansas standard deduction. Itemized deductions in Arkansas are similar to itemized deductions allowed by the IRS. For example, real estate taxes, charitable contributions, mortgage interest and investment interest are all deductible.

The standard deduction in Arkansas is lower than the federal standard deduction. For most filers, the deduction is $2,200, but for married persons filing jointly, it is twice that amount.

In addition to that standard deduction, some types of income are exempt from taxation in Arkansas and may be subtracted from total income to calculate net taxable income. Like most states, Arkansas does not tax Social Security benefits. Active-duty military income is fully exempt, while enlisted persons receive a $9,000 exemption and retired military personnel receive a $6,000 exemption.

Although Arkansas does not have a personal exemption, it does have a personal tax credit that reduces tax liability by $26 for each filer and each dependent. Other Arkansas credits include the political contribution credit of up to $50 per year; the child care credit, which is equal to 20% of the federal child care credit; and the credit for adoption expenses, also 20% of the federal credit.

Arkansas Sales Tax

Arkansas has some of the highest sales taxes in the country. The statewide rate is 6.5%. However, along with that state rate, counties and cities collect their own sales taxes; these can total up to 5.125%, which means the total sales tax rate in some areas is 11.625%. The table below shows rates for all counties and the largest cities in Arkansas. Note that the rates listed for counties include state and county rates only, while rates listed for cities include state, county and city rates.

For many types of food, the statewide rate is lowered to 1.5%, which means the total rate will be 5% lower than those listed above. Generally, food items that can be purchased in a grocery store and are intended for home consumption are subject to this lower rate. Prepared foods face the full rate and many localities levy additional taxes on restaurants.

Prescription medicine is entirely exempt from sales tax, as are sales of durable medical equipment such as wheelchairs, prosthetic devices or oxygen tanks.

Arkansas Property Tax

Looking at buying a house in The Natural State? The good news is that Arkansas has some of the lowest property taxes in the country. The average effective property tax rate in Arkansas is just 0.63%, ninth lowest in the nation. That means that, on average, homeowners in Arkansas pay just 0.63% of their home’s value in property taxes each year.

Increases in property tax payments are limited by law. The assessed value of a property, which is the value on which taxes are based, cannot increase by more than 5% in a single year. That ensures that homeowners are not caught off-guard by unexpectedly large tax bills.

More good news for people looking to buy a home in Arkansas: Our mortgage guide can help make your homebuying process a bit easier. The guide includes information about mortgage rates and other details about getting a mortgage in The Natural State.

Calculate Your Property Taxes: Arkansas Property Tax Calculator

Arkansas Gasoline Tax

The gas tax in Arkansas is 21.8 cents per gallon of regular fuel. That is the 12th lowest gas tax in the country.

Arkansas Estate Tax

Arkansas has no estate or inheritance tax. Inheritance is exempt from the Arkansas income tax.

Arkansas Capital Gains Tax

Capital gains are taxable as personal income in Arkansas. That means you pay the same income tax rates as you do for other income in the state. Long-term capital gains receive an exemption of at least 50%, meaning that 50 cents of every dollar in gains are taxable. The exclusion does not apply to short-term capital gains, which are 100% taxable at regular income tax rates.

Arkansas Alcohol and Tobacco Tax

Arkansas has several sin taxes, including both a cigarette and alcoholic beverages tax. The cigarette tax is a relatively low $1.15 per pack, which ranks as the 35th highest rate. The alcohol tax varies depending on the variety and alcoholic content of the beverage. Spiritous liquor, which has an alcoholic content of at least 21%, is taxed at a rate of $2.50 per gallon (plus 20 cents per case). This is on top of regular sales tax. Wine faces an excise tax of $1.44 per gallon, which is the 10th highest tax rate on wine in the country.

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Former president Bill Clinton was born in Hope and spent most of his childhood in Hot Springs. Walmart, the world’s third largest employer and largest retailer, is headquartered in Bentonville, Arkansas. There are two mountain ranges in Arkansas: the Ozarks and the Ouachita Mountains.