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.]
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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.
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