tax

Arkansas



Arkansas assesses an individual income tax, using six tax brackets ranging from 1 percent to 7 percent. Its tax system is designed along the U.S. income tax system and generally adopts most of its tax provisions. More on Arkansas taxes can be found in the tabbed pages below.

Income
Sales
Property
Estate
Other
Personal income tax
 Arkansas collects income taxes from its residents at the following rates:

-- 1 percent on the first $3,599 of taxable income
-- 2.5 percent on taxable income between $3,600 and $7,199
-- 3.5 percent on taxable income between $7,200 and $10,799
-- 4.5 percent on taxable income between $10,800 and $17,999
-- 6 percent on taxable income between $18,000 and $30,099
-- 7 percent on all taxable income more than $30,100.
 In 2003, the state enacted a 3 percent individual income tax surcharge on all Arkansas taxpayers, including those living or working in Texarkana. Previously these residents paid no Arkansas tax by claiming the state's Border City Exemption.
 Arkansas state tax returns are due April 15, or the next business day if that date falls on a weekend or holiday.
 Taxpayers who receive an IRA distribution after reaching the age 59½ don't have to pay tax on the first $6,000 from the account. Premature distributions made on account of the participant's death or disability also qualify for the exemption.
Sales tax
 Arkansas's gross receipts (sales) tax and compensating (use) tax rate was increased March 1, 2004, to 6 percent (from the previous 5.125 percent).
 Effective July 1, 2004, the state also mandated that various services be subject to sales tax collection. They include wrecker and towing services; dry cleaning and laundry; body piercing, tattooing and electrolysis; pest control; security and alarm monitoring; self-storage facilities; boat storage and docking; and pet grooming and kennel services.
 In addition to the state sales tax, there are more than 300 local taxes in Arkansas. Cities and counties have the authority to enact additional local sales and use taxes if they are passed by the voters in their area. You can find your local sales and use tax rates at this interactive Web page.
 On July 1, 2007, the tax rate on sales of food and food ingredients was cut to 3 percent.
Personal and real property taxes
 Political subdivisions, including counties, cities and school districts, collect taxes on real property (such as a house or land) and personal property (automobiles, pickup trucks, recreational vehicles, boats and motors, motorcycles and all-terrain vehicles).
 These ad valorem taxes are based according to item value only. Assessment is based on 20 percent of the true market value for real property and on the usual selling price for personal property. The tax due is calculated as the assessed value times the local millage rate.
Personal property must be assessed each year before May 31 (without penalty). The taxable assessed value of homesteads will not increase more than 5 percent above the previous taxable assessed value except when new additions or substantial improvements are made to the property. However, the taxable value of the homestead will continue to increase each year until it equals 20 percent of market value. Taxes are due by Oct. 10 of the following year. You can find your local assessor here or by calling (501) 324-9240.
 Arkansas homeowners may receive up to a $300 property tax credit on their homesteads. Eligibility for the credit is confined to a homeowner's principle place of residence. Nursing home or retirement center residents who own a home are also eligible for the credit, as are people who have deeded their homes to others while retaining a right to live in it until they die (a life estate). Contact your local assessor's office for details.
 In certain cases, disabled veterans are exempt from all state taxes on real and personal property. This tax exemption also is available to widow or widowers who do not remarry, as well as to dependent minor children of military personnel who were killed in action, died of service-related disabilities or who are missing in action. More information is available from the Arkansas Department of Veterans Affairs Web site or by calling (501) 370-3820.
Inheritance and estate taxes
 Estates are taxed based on the federal estate tax law. The Arkansas tax equals the credit allowed for state death taxes on the federal estate tax return. Because the Arkansas tax is completely offset, there is no additional tax due. There is no inheritance tax.
Other Arkansas tax facts
 Arkansas taxpayers can check the status of their refunds online.
Arkansas' Miscellaneous Tax Section handles various areas of taxation including: timber processing; severance tax on natural resources; cigarettes; tobacco products; cigarette paper; imported wine; domestic wine; liquor and beer; amusements; real soybean promotion; swine pseudo rabies eradication; merchandise vending; beauty pageant registration fees; bromide and museum fund; waste tires; corn and grain sorghum property transfers; soft drinks; brucellosis assessment; beef, wheat and rice promotion; catfish feed assessment; and construction permit surcharges.
Arkansas does not collect an intangible personal property tax.
Additional information on Arkansas taxes is available at the Arkansas Department of Finance and Administration Web site.
  

-- Updated: Feb. 4, 2008

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