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
-
How To Manage Retirement Savings When Living AbroadRetiring abroad can be a dream come true if you have a good grip on your finances. Here's what you need to know to make it a reality.
-
Irrevocable Trusts: So Many Options to Lower Taxes and Protect AssetsIrrevocable trusts offer nearly endless possibilities for high-net-worth individuals to reduce their estate taxes and protect their assets.
-
IRS Free File Is Now Open for 2025: Are Your Taxes Eligible?Tax Filing Official tax season doesn't begin until late January, but taxpayers can start filing free online returns now.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
Child and Dependent Care Credit: How Much Is It?CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
-
Gov. Hochul Wants to Triple the New York Child Tax CreditState Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff HikeTax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
Should Rent Be Part of Your Retirement Plans?Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
