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 income tax
Arkansas has a graduated state individual income tax ranging from 2% to 4.40%, according to the Tax Foundation.
Arkansas tax on retirement benefits: Social Security retirement benefits and Railroad Retirement benefits are tax-exempt.
Retirees age 59.5 or older can be exempt from 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.
Military retirement pay is tax-exempt.
Arkansas sales tax
Arkansas has a 6.5% state sales tax rate. Localities can add as much as 6.125% to the state's tax rate, according to the Sales Tax Handbook.
- Groceries: Taxable
- Clothing: Taxable
- Prescription drugs: Exempt
How much are property taxes in Arkansas?
In Arkansas, the average effective property tax rate is 0.53%, according to the Tax Foundation.
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 gas tax
Gasoline: $0.22 per gallon.
Diesel: $0.23 per gallon.
Source: Sales Tax Handbook
Arkansas taxes on alcohol and tobacco
Arkansas tobacco taxes
| Product | Tax Amount |
|---|---|
| Cigarettes | $1.15 per pack |
| Other Tobacco Products | 68% of wholesale price |
Source: Sales Tax Handbook
Arkansas alcohol taxes
| Product | Tax Amount |
|---|---|
| Wine | $0.75 per gallon |
| Beer | $0.23 per gallon |
| Liquor | $2.50 per gallon |
Source: Sales Tax Handbook
Arkansas estate and inheritance taxes
Arkansas does not have an estate or inheritance tax.
Related Content
-
Ten Cheapest Places to Live in TexasProperty Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for YouAI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
Homeschoolers: 529 Plan Savings Could Soon Work for YouSavings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the SenateTax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.
-
New GOP Car Loan Tax Deduction: Which Vehicles and Buyers QualifyTax Breaks To fulfill Trump's campaign promise, House GOP lawmakers want to offer a tax deduction for car loan interest. How would it work?
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
Ten Cheapest Places To Live in New YorkProperty Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.
-
‘My Etsy Shop is Dead’: Vendors Cry for Help Amid Trump’s TariffsTariffs Small businesses are struggling to thrive as they absorb the Trump administration’s new wave of tariffs.
-
Three Things Star Wars Fans Taught Me About TaxTax Tips May the force be with you and your taxes this Star Wars Day 2025.
-
Retirees: Don’t Miss These Valuable State Tax Breaks in 2025Retirement Planning Selecting the right state for retirement can significantly impact your financial well-being.
