Everything You Need To Know About Arkansas State Taxes
The Arkansas Department of Finance and Administration (DFA) administers the state’s tax system. The department is in charge of controlling regulations and collecting taxes throughout the state. Additionally, the DFA provides an annual overview of its operations so residents can better understand how state laws affect the division and how the state government collects revenue.
Arkansas’s income tax system ranks 31st among other states, with an average income tax collection of $931 per resident. The state imposes an average 0.63% property tax rate, with a median property tax collection of $712 per resident, ranking it 38th and 48th in the country, respectively.
If you’re an Arkansas resident, it’s important to understand the laws the DFA enacts when it comes to income, property, and other taxes. Review this guide to learn more about these regulations and how they apply to you.
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Table of Contents
Arkansas Income Tax
The Arkansas income tax system mimics the federal income tax collection system. It uses a graduated tax system with tax rates ranging from 1% to 7%. The more income you earn, the higher the tax rate. If you earn less than $4,599 for the year, you’re not responsible for filing a tax return in the state of Arkansas.
The state provides a Border City Exemption for the residents of Texarkana, Arkansas, a city that’s located in both Arkansas and Texas. City residents can claim an income tax exemption from Arkansas. They must provide Form AR-TX and their W-2, which are both provided by their employer, to the DFA to claim this exemption.
Arkansas State Income Tax Rate
The Arkansas individual income tax system has six different tax rates that equate to different figures, which apply based on your income. The tax bracket you fall into doesn’t rely on your filing status and includes one of the following:
|Taxable Income||Tax Rate|
|$4,600 to $9,099||2% minus $91.98|
|$9,100 to $13,699||3% minus $182.97|
|$13,700 to $22,599||3.4% minus $237.77|
|$22,600 to $37,899||5% minus $421.46|
|$27,900 to $80,800||6% minus $800.45|
|$80,801 to $81,800||6.9% minus $1,421.64|
|$81,801 to $82,800||6.9% minus $1,321.64|
|$82,801 to $84,100||6.9% minus $1,221.64|
|$84,101 to $85,200||6.9% minus $1,121.64|
|$85,201 to $86,200||6.9% minus $1,021.64|
|Over $86,201||6.9% minus $981.64|
Arkansas Sales Tax
The current Arkansas sales tax is 6.5%. This statewide sales tax applies to any purchase of tangible goods and many services. In addition to this statewide sales tax rate, cities and counties within the state are permitted to impose additional local sales taxes if they are approved by voters. Over 300 counties in Arkansas have enacted their own local taxes.
Arkansas Property Tax
In Arkansas, you’re responsible for paying property taxes on real property, such as your house and land you own, as well as your personal property, such as a car or boat. Your property is taxed ad valorem, or based on its value. Your county assessor’s office evaluates your real property by analyzing its characteristics and the market. You’re taxed based on 20% of your real property’s assessment value and the county’s current tax rate.
It’s your responsibility to claim your personal property by May 31 each year to avoid penalty fees. If your home is your primary residence, you can claim a homestead exemption credit on your property taxes up to $350. Apply for homestead exemption through your county assessor’s office. Disabled veterans may be eligible for a property tax exemption through the Arkansas Department of Veterans Affairs.
Arkansas Estate Tax
Other Taxes In Arkansas
Arkansas sales tax also applies to certain services performed in the state, including:
- Pest control;
- Security system installation and monitoring;
- Laundry and dry cleaning services;
- Boat and self-storage services;
- Body piercing or tattooing;
- Towing and wrecker services;
- Pet grooming or boarding.
Arkansas implements a sales tax credit for the sale of a used vehicle. If eligible, you can receive a sales tax credit on your purchase of a new vehicle if you sell your used one within 45 days. You must apply for this credit with the tax revenue department after the transaction is complete.
Filing Taxes in Arkansas
You must prepare your tax return and submit it to the DFA by April 15 using Arkansas Form AR1000F. If you’re only mailing your tax return and not requesting a refund or enclosing payment, you can send it to:
Arkansas State Income Tax
P.O. Box 8026
Little Rock, AR 72203-8026.
If you’re enclosing a tax payment with your return, mail them to:
Arkansas State Income Tax
P.O. Box 2144
Little Rock, AR 72203-2144.
If you’re expecting a tax refund after submitting your return, mail it to:
Arkansas State Income Tax
P.O. Box 1000
Little Rock, AR 72203-1000.
You may file for a six-month extension using Arkansas Form AR1055 but you must submit the taxes you owe by the due date to avoid penalty fees. You may pay the taxes you owe by credit card but convenience fees are added to your payment. Call the Official Payments Corporation at 1-800-272-9829 or complete your transaction online.
After filing your return, you can track your refund or return status using the Arkansas Taxpayer Access Point (TAP) online system. You must enter your Social Security number and expected refund amount to check the status. With the proper knowledge of the Arkansas tax system, as well as access to forms and online assistance, you can ensure you pay your taxes on time and avoid penalty fees.
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