Arkansas State Taxes: What You’ll Owe in the 2026 Tax Season

How is property taxed?

The average property tax in Arkansas was 0.53 percent in 2023, according to the Tax Foundation. Property taxes vary from one county to the next based on local rates. The lowest property tax rate was 0.35 percent in Stone County, while the highest was 0.78 in Pulaski County. The lowest median property tax paid in 2023 was $405 in Monroe County, while the highest was $1,731 in Benton County, according to the Tax Foundation.

What about sales and other taxes?

• Sales tax: Statewide sales tax is 6.5 percent. However, local sales tax varies by county and averages 2.96 percent. The combined average local and state sales tax is 9.46 percent. Items that are exempt from state and local taxes include newspapers and prescription drugs. Groceries are also exempt from state sales tax, though local sales tax still applies.
• Gas and diesel taxes: 24.7 cents per gallon on gasoline and 28.5 cents per gallon on diesel
• Vehicle tax: All sales of new and used motor vehicles are subject to sales tax unless a specific exemption applies. If the total gross sale price of a new or used motor vehicle is less than $4,000, no sales tax is due on the vehicle. If the total gross sale price of a vehicle is between $4,000 and $10,000, then the state sales tax is calculated at a reduced rate of 3.5 percent. If trading in a used vehicle, the 3.5 percent tax is only due on the difference between the trade-in value and the total gross cost of the vehicle. For vehicles costing more than $10,000, you pay the standard state sales tax of 6.5 percent. Local sales tax is due on the first $2,500 and is determined by the location where you register the car and apply for certification of the title. Local sales tax varies.
• Alcohol: For spirits, the state taxes wholesalers $2.50 per gallon plus 20 cents per case. Wine is taxed at 75 cents per gallon and 5 cents per case, while beer is taxed at 24.1935 cents per gallon for manufacturers that self-distribute and 24.2188 cents per gallon for larger manufacturers using third-party distributors. Consumers pay state sales tax on alcohol, as well as local taxes that vary by city and county.
• Lottery: The state withholds federal income tax and state income tax (3.9 percent) for any lottery winnings that exceed $5,000. For lottery winnings that range from $600 to $5,000, the state provides winners with IRS Form W-2G so they can report it themselves.

Will my heirs or estate have to pay inheritance and estate taxes?

The state does not impose an inheritance tax or estate tax on the estate of a deceased person. However, income generated by an estate might still necessitate the filing of a fiduciary income tax return (with a marginal rate of up to 3.9 percent) that may result in tax due.

Are there any tax breaks for older residents?

Homestead tax credit: Homeowners may receive a homestead property tax credit of up to $600 per year. 

Age 65 or disabled homeowner property tax relief: Homeowners who qualify for the homestead tax credit and who are either age 65 or older or disabled may be eligible for additional property tax relief. The taxable assessed value of currently owned homestead properties can be frozen at the value of the homestead at the next assessment date after the owner turns 65 or becomes disabled. If a person who is age 65 or older or who is disabled purchases a homestead property, the taxable assessed value of the residence can be frozen at the next assessment date after purchasing the homestead. Eligible homeowners must apply for the freeze with the county assessor’s office.