Nothing in Arkansas law requires an Arkansas seller to collect sales and use taxes for another state. You are encouraged to contact the other states tax department to determine if you have the requirement to collect their taxes.
What is exempt from sales tax in Arkansas?
Some goods are exempt from sales tax under Arkansas law. Examples include prescription drugs, purchases made with food stamps, and some farming equipment.
Who has to collect sales tax in Arkansas?
Arkansas considers vendors who make more than $100,000 in sales annually or more than 200 transactions in the state to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state.
What items are taxable in Arkansas?
Arkansas imposes sales tax on all purchases of tangible personal property unless a specific exemption applies. Services are taxable only if the service is specifically enumerated by law as a taxable service. Use tax was designed to assure fair competition between Arkansas businesses and their out-of- state competitors.
Can items sold from one state to another be taxed?
If the customer picks up the item at the seller’s location, tax should be collected for the state in which the seller is located. If the item is shipped to the customer, then tax applies for the delivery state, whether that is the same state where the seller is located or a different state.
What is Arkansas sales tax in 2022?
6.5%
Current Tax Rate is 6.5% (non-food items).
How do I avoid paying sales tax on a used car in Arkansas?
You can avoid paying sales tax on vehicle transactions in Arkansas if you purchase a used car for less than $4,000.
How does sales tax work in Arkansas?
The state Use Tax rate is the same as the Sales Tax rate, 6.500%. In addition, you are required to remit the city and/or county tax where the items are first delivered in Arkansas. A list of tax rates for cities and counties may be obtained from the Sales Tax and Use Tax Section or downloaded from our website.
What services are subject to sales tax in Arkansas?
Traditional Goods or Services
Goods that are subject to sales tax in Arkansas include physical property, like furniture, home appliances, and motor vehicles. Arkansas charges a 1.5% reduced rate on the purchase of groceries.
How long do you have to pay sales tax on a car in Arkansas?
30 days
Calculating Arkansas Car Sales Tax:
To begin with, a vehicle has to be registered with the DMV no later than 30 days from the day it was purchased. The sales tax is calculated on the total amount of the sale (less trade-in value).
Are groceries taxed in Arkansas?
Arkansas imposes a 6.5 percent state sales and use tax on certain nonfood items. It imposes a 0.125 percent state reduced food tax on food items. These tax rates, and tax rates on other items such as beer, mixed drinks and liquor, are listed at the Arkansas Department of Finance and Administration (DFA) website.
What states have no sales tax?
The 5 states without sales tax
- Alaska. Known as ‘The Last Frontier’, Alaska is the most tax-friendly state in the country.
- Delaware. The ‘First State’ also does not charge its residents or visitors any state sales tax.
- Montana.
- New Hampshire.
- Oregon.
- Sales tax isn’t the only tax to consider.
What is consumer use tax in Arkansas?
What are the Arkansas Use Tax rates? Arkansas Consumer Use Tax “state tax” rate is 6.5 percent of the purchase price of general merchandise and taxable services plus any applicable City and County Consumer Use Tax.
How do I sell something without paying taxes?
The rule of thumb is that if you used the items and then sold them for less than you bought them for, then you owe no taxes on the sale. However, if you sold an antique or collectible that had appreciated since you first acquired it, you likely would be on the hook for taxes on the profit.
Which states are destination based sales tax?
In a destination-based state, sales tax is collected based on the buyer’s location. That means you collect sales tax based on your customer’s state and local tax rates.
The following states use the destination-based method:
- Alabama.
- Arkansas.
- Colorado.
- Connecticut.
- District of Columbia.
- Florida.
- Georgia.
- Hawaii.
Who pays sales tax buyer or seller?
Liability to Pay the Tax
The liability to pay the sales tax in case of goods being supplied lies upon the consumer whereas the liability to pay the sales tax of imports lies upon the importer according to section 3 of the Sales Act 1990.
Why is sales tax so high in Arkansas?
In addition to having one of the broader sales tax bases in the country, Arkansas also has the third highest average sales tax rate in the country (including local sales tax rates). Together, these mean that Arkansas is heavily reliant on the sales tax for funding state and local government services.
What city has the highest taxes in Arkansas?
Arkansas: Sales Tax Handbook
Combined with the state sales tax, the highest sales tax rate in Arkansas is 12.625% in the city of Gillham.
Is Arkansas a high tax state?
Arkansas has a 6.50 percent state sales tax rate, a max local sales tax rate of 6.125 percent, and an average combined state and local sales tax rate of 9.47 percent. Arkansas’s tax system ranks 44th overall on our 2022 State Business Tax Climate Index.
Do I have to pay taxes twice if I buy a car out of state?
You only pay sales tax based on where you register your new vehicle. You do NOT pay sales tax twice; you only owe the tax at the rate where you live.
How much will it cost to tag my car in Arkansas?
Other fees
| Validation decal fee | $2.50 |
|---|---|
| Postage | $0.39 |
| Title fee | $10.00 |
| Tag transfer fee | $1.00 |
| Lien filing fee | $0.50 |