Arkansas Income Tax Calculator

Taxes in Arkansas

Arkansas State Tax Quick Facts

• Income tax: 0% - 3.9%
• Sales tax: 6.5% - 12.625%
• Property tax: 0.59% average effective rate
• Gas tax: 25 cents per gallon of regular gasoline

Residents of Arkansas face sales tax rates that are among the highest in the country. The average combined sales tax rate in Arkansas in 2024 (including state and local taxes) is 9.16%, third-highest in the U.S. On the other hand, homeowners in Arkansas pay some of the lowest property taxes in the nation, at an average effective rate of just 0.59%.

A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Arkansas Income Taxes

Arkansas has five income tax brackets that apply to all filing statuses for tax year 2024, with rates ranging between 0% for income up to $5,300 and 3.9% for income over $25,000. 

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. The state's standard deduction went up from $2,270 in tax year 2023 to $2,340 for tax year 2024.

In addition to the 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. Military income is also fully exempt from state taxes.

Although Arkansas does not have a personal exemption, it does have a personal tax credit that reduces tax liability by $29 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, counties and cities collect their own sales taxes. These can total up to 6.125%, which means the total sales tax rates in some areas is as high as 12.625%, although the average combined rate paid in Arkansas is 9.157%. The table below shows rates for all counties in Arkansas.

For many types of food, the statewide rate is lowered to 0.2%. 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' property taxes are some of the lowest in the country. The effective property tax rate in Arkansas is just 0.59%. That means the typical homeowner in Arkansas pays just $959 per year in property taxes. 

Increases in property tax payments are limited by law. The assessed value of a homestead 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 Arkansas.

Arkansas Gasoline Tax

The gas tax in Arkansas is 25 cents per gallon of regular gasoline.

Arkansas Estate Tax

Arkansas has no estate or inheritance tax. Inheritances is also 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 50%, meaning that 50 cents of every dollar are not 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 relatively low at $1.49 per pack. The alcohol tax on distilled spirits is higher at $8.01 per gallon, while the state beer tax is $0.35.

• 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.