- Statewide: 6.5%
- Counties can levy sales tax of no more than 5%.
- Current average sales tax (with local taxes included): 9.136%
- Common Exceptions at State Level:
- Prescription Medicine: Exempt
- Unprepared Foods: .125%
- Gasoline Tax: 43.20 cents/gallon (Includes all state, local, and federal taxes)
- Diesel Fuel Tax: 53.20 cents/gallon (Includes all state, local, and federal taxes)
Personal Income Tax
- Personal Income Tax Rate Range: State has two tax brackets. Those making over $84,500 net income pay between 2% and 5%; those making less pay between 0% and 5.5%
- Standard deduction: Single Filing Status: $2,200/Married Filing Jointly: $4,400.
- Personal Exemption Allowance: $29/Dependent Exemption: $29. (Both taken as tax credit)
- Itemized Deductions Allowed?: Yes. Subject to limitations.
- Retirement Income
- Social Security: Exempt
- IRAs: Taxable at ordinary income tax rates.*
- 401Ks/Defined contribution employer retirement plans: Taxable at ordinary income tax rates.*
- Private pensions: Taxable at ordinary income tax rates.*
- Public Pensions: Taxable at ordinary income tax rates.*
- Military Pay
- Active Duty Pay: Exempt
- Military Retirement Pay: Exempt
- Military Disability Pay: Exempt to the extent excluded from Federal Adjusted Gross Income
- VA Disability Dependency & Indemnity Compensation Benefits: Exempt
- SBP/SSBP/RCSBP/RSFPP: Exempt
Income Tax Comments: *Up to $6,000 of retirement income may be tax-exempt. State allows county- and city-level income tax.
- Local municipalities average .62% of the property's assessed value.
- Calculation of assessed value: 20% of fair market value; cannot increase more than 5% per year for most properties.
- State-Level Relief programs for:
- Owner-occupied: May be eligible for credit of up to $375
- 65 and over or Disabled: Assessed value frozen until sold or improvements made.
- Disabled Veteran/Surviving Spouse (not remarried) & dependent children: Full tax exemption if meet certain requirements.
- Personal Property Tax: Yes. Rates and exemptions vary.
Inheritance & Estate Taxes: None
Department of Revenue website: www.dfa.arkansas.gov