Some goods are exempt from sales tax under Arkansas law. Examples include prescription drugs, purchases made with food stamps, and some farming equipment.
What services are exempt from sales tax in Arkansas?
While the Arkansas sales tax of 6.5% applies to most transactions, there are certain items that may be exempt from taxation.
Other tax-exempt items in Arkansas.
| Category | Exemption Status |
|---|---|
| Manufacturing and Machinery | |
| Services | |
| Transportation Services | EXEMPT |
| Software and Digital Products |
What is taxable in the state of Arkansas?
State Tax Rates
| Statewide Tax Rates | Code | Rate |
|---|---|---|
| State Sales and Use Tax | – | 6.500% |
| State Reduced Food Tax | – | 0.125% |
| State Electricity Manufacturing Tax | – | 1.625% |
| State Manufacturing Utility Tax | – | 0.625% |
What are some things not taxed?
Some items are exempt from sales and use tax, including:
- Sales of certain food products for human consumption (many groceries)
- Sales to the U.S. Government.
- Sales of prescription medicine and certain medical devices.
- Sales of items paid for with food stamps.
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 is subject to sales tax 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.
Does Arkansas tax Social Security?
For instance, Arkansas exempts Social Security benefits and up to $6,000 of retirement income from its state income tax. And, as a plus for veterans, all military pension income is tax-exempt.
Does Arkansas have property tax?
By almost any measure, Arkansas has low property taxes. Of all taxes collected in Arkansas (state and local combined), 18.1 percent comes from property taxes. That’s the fifth lowest in the nation, where the average is 31 percent, and lower than all our neighbors (roughly equal to Oklahoma’s).
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.
Is there personal property tax in Arkansas?
Arkansans are required to pay personal property taxes every year. Personal property taxes are applied to items such as vehicles, trailers, motorcyles, etc. and are paid to your county collector. Most counties provide online property tax payments, which you can find by visiting ar.gov/tax.
What are 3 items that are not taxable?
The following items are deemed nontaxable by the IRS:
- Inheritances, gifts and bequests.
- Cash rebates on items you purchase from a retailer, manufacturer or dealer.
- Alimony payments (for divorce decrees finalized after 2018)
- Child support payments.
- Most healthcare benefits.
- Money that is reimbursed from qualifying adoptions.
What is the least taxed state?
Alaska
Alaska had the lowest tax burden in the U.S. in 2021, though it was also one of the least affordable states to live in.
Which state has highest income tax?
The top 10 highest income tax states (or legal jurisdictions) for 2021 are:
- California 13.3%
- Hawaii 11%
- New Jersey 10.75%
- Oregon 9.9%
- Minnesota 9.85%
- District of Columbia 8.95%
- New York 8.82%
- Vermont 8.75%
What is Arkansas sales tax on cars?
6.5%
How much is the car sales tax rate in Arkansas? Arkansas ranks tenth among states with the highest car sales tax at 6.5%. This rate applies to all car purchases—whether you buy new or used. You’ll also need to account for county and local sales tax, which will be added to the base 6.5%.
What food doesnt get taxed?
Food Products – Nontaxable
Food products are not taxable. Food products include flour, sugar, bread, milk, eggs, fruits, vegetables and similar groceries. only cut up, repackaged or pasteurized such as fruit, vegetable or cheese trays.
What is the gasoline tax in Arkansas?
$0.245 / gallon
Gas tax by state
| State | Gasoline Tax | Aviation Fuel Tax |
|---|---|---|
| Arkansas | $0.245 / gallon | no tax |
| California | $0.539 / gallon | $0.18 / gallon |
| Colorado | $0.22 / gallon | $0.06 / gallon |
| Connecticut | $0.0 / gallon*** | 8.1% petroleum products gross earnings tax |
How do I become tax exempt in Arkansas?
Apply by submitting a copy of the IRS Determination Letter, the first two pages of IRS Form 1023, and a statement declaring exemption under ACA 26-51-303 or ACA 26-51-309. Organizations without an IRS Determination Letter should submit Form AR1023CT, a copy of the articles of incorporation, and a copy of the bylaws.
Does Amazon charge sales tax in Arkansas?
If you order an item on Amazon, you’re going to pay sales tax.” Lawmakers sold the internet sales tax as a way to level the playing field between brick and mortar stores, and remote online retailers without a physical presence in Arkansas. It’s welcome news to major department stores like Little Rock-based Dillard’s.
Is lawn mowing taxable in Arkansas?
Lawncare services are listed as taxable services under Arkansas code, and can be defined as “the maintenance, preservation, or enhancement of ground covering of nonresidential property and does not include planting trees, bushes, and shrubbery, grass, flowers, and other types of decorative plants.” This specifically
Do seniors pay property tax in Arkansas?
If you are a senior citizen owning a property and living in Arkansas, you may qualify for the following property tax exemptions: Age 65 or Disabled Homeowner Property Tax Relief. Homestead Tax Credit.
What taxes do retirees pay in Arkansas?
Arkansas is a relatively tax-friendly state for retirees. Social Security is totally exempt from the state’s income tax. Arkansas also offers seniors a deduction of $6,000 for other types of retirement income like from pensions or an IRA.