Arkansas State Tax Guide

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last updated 17 October 2023

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 taxes

picture of downtown Little Rock, Arkansas

Arkansas income tax rates for the 2023 tax year max out at 4.7%. The top tax rate is reduced to 4.4% as of Jan. 1, 2024.

The table below shows 2023 Arkansas income tax rates for individuals with net incomes up to $84,500. Taxpayers with net incomes above this amount reach the higher tax brackets sooner.

Arkansas Income Tax Range: Individual with net income up to $84,500

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Up to $5,099	0%
$5,100 to $10,299	2%
$10,300 to $14,699	3%
$14,700 to $24,299	3.4%
$24,300 or more	4.7%

Arkansas tax on retirement benefits: Social Security retirement benefits and Railroad Retirement benefits are tax-exempt. Retirees age 59.5 or older can exempt 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 levy. Localities can add as much as 6.125% to the state's tax rate, according to the Tax Foundation.

Groceries are taxable at a reduced rate of 0.125%, but local taxes may also apply.
Clothing is taxable.
Prescription drugs are tax-exempt.

How much are property taxes in Arkansas?

In Arkansas, the average effective property tax rate is 0.62%, and the median property tax bill is under $1,000.

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 motor fuel and vehicle taxes

Motor vehicle purchases in Arkansas are subject to state and local sales taxes.

Arkansas taxes gasoline at $0.249 per gallon when considering the state excise tax and other state taxes and fees.

Arkansas taxes on alcohol and tobacco

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Cigarettes	$1.15 per pack
Other tobacco products	68% of manufacturer's price
Beer	$0.23 per gallon
Wine	$0.75 per gallon
Liquor	$2.50 per gallon

Arkansas estate and inheritance taxes

Arkansas does not have an estate or inheritance tax.

Katelyn has more than 6 years’ experience working in tax and finance. While she specializes in tax content, Katelyn has also written for digital publications on topics including insurance, retirement and financial planning and has had financial advice commissioned by national print publications. She believes that knowledge is the key to success and enjoys helping others reach their goals by providing content that educates and informs.