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?
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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.
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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.
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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?
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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.
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States can better position themselves for success by moving away from economically-damaging taxes like the capital stock tax.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
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While many factors influence business location and investment decisions, sales taxes are something within policymakers’ control that can have immediate impacts.
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Forty-three states adopted tax relief in 2021 or 2022—often in both years—and of those, 21 cut state income tax rates. It’s been a remarkable trend, driven by robust state revenues and an increasingly competitive tax environment.
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At the end of 2022, prices were 14.6 percent higher than they were two years prior. That’s the fastest inflation rate over any two calendar years since the stagflation era of the late 1970s. State policymakers are understandably interested in bringing any tools at their disposal to bear on the problem. And many of them are reaching for tax policy solutions.
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New Jersey levies the highest top statutory corporate tax rate at 11.5 percent, followed by Minnesota (9.8 percent) and Illinois (9.50 percent). Alaska and Pennsylvania levy top statutory corporate tax rates of 9.40 percent and 8.99 percent, respectively.
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