Arkansas has two different individual income tax rate schedules depending on taxpayer income, with rates of 2.00 percent and 3.9 percent. Arkansas has a graduated corporate income tax, with rates ranging from 1.0 percent to 4.3 percent, a 6.50 percent state sales tax rate, and an average combined state and local sales tax rate of 9.48 percent. Arkansas has a 0.56 percent effective property tax rate on owner-occupied housing value. Arkansas does not have an estate tax or inheritance tax. Arkansas’s gas tax is 25 cents per gallon, and its cigarette excise tax is $1.15 per pack of 20 cigarettes.
Arkansas raises tax revenue primarily through general sales taxes (41.7 percent of total state and local tax revenue), individual income taxes (19.4 percent), and property taxes (17.0 percent). Arkansas collects $5,302 in state and local tax collections per capita, carries $6,005 in state and local debt per capita, and has an 87 percent funded ratio of public pension plans. Arkansas’s tax system ranks 34th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Arkansas is no exception. Use the tabs below to compare Arkansas taxes with other states and to see how Arkansas raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
Get facts about taxes in your state and around the US
The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
122 min read
Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
2 min read
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
5 min read
Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
However well-intended they may be, sales tax holidays remain the same as they always have been—ineffective and inefficient.
12 min read
Policymakers are increasingly considering taxes on data processing and other businesses’ digital services, but these taxes increase costs at many stages of the production process for virtually all businesses, not just tech-oriented businesses.
7 min read
The five states with the highest average combined state and local sales tax rates are Louisiana (10.13 percent), Tennessee (9.61 percent), Washington (9.57 percent), Arkansas (9.48 percent), and Alabama (9.46 percent).
8 min read
Whether a sommelier or a casual enjoyer, wine drinkers may not be aware of just how much they are paying in taxes to uncork their drink of choice.
6 min read
In the United States, taxes are the single most expensive ingredient in beer. The tax burden accounts for more of the final price of beer than labor and materials combined—the many different layers of applicable taxes combining to total as much as 40.8 percent of the retail price.
7 min read
Policies that increase the tax burden on high earners makes states less competitive, increase revenue volatility, discourage investment, and risk accelerating outmigration of talent and capital. Many top-earners are already leaving high-tax states for Florida, North Carolina, and other low-tax jurisdictions.
9 min read
The significant disparity in tax rates across states underscores the complex tax and regulatory environment governing distilled spirits.
9 min read
During a recent special session called by Gov. Sarah Huckabee Sanders (R), Arkansas policymakers cut the state’s top individual and corporate income tax rates, continuing Arkansas’s years-long tax reform streak and making the Razorback State one of five states to cut income taxes so far in 2026.
5 min read
Tax collections vary widely by state, making per capita collections figures—a measure of collections per person—especially useful, as they allow comparisons across differences in tax rates and bases, economic capacities, and policy decisions that impact the size and scope of government.
5 min read
Rental cars are some of the most heavily taxed transactions in the US. Rather than levying additional taxes on rental cars by trying to export the tax burden to nonresidents, municipalities should enact principled, neutral transportation tax policy that is unlikely to discourage visitors, tourists, and other economic activity.
5 min read
