State Individual Income Tax Rates and Brackets, 2023
Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections:
9 min read
Arkansas Tax Rates, Collections, and Burdens
How does Arkansas’s tax code compare? Arkansas has a graduated state individual income tax, with rates ranging from 2.00 percent to 4.40 percent. Arkansas has a graduated corporate income tax, with rates ranging from 1.0 percent to 4.8 percent. Arkansas also has a 6.50 percent state sales tax rate and an average combined state and local sales tax rate of 9.45 percent. Arkansas has a 0.53 percent effective property tax rate on owner-occupied housing value.
Arkansas does not have an estate tax or inheritance tax. Arkansas has a 25 cents per gallon gas tax rate and a $1.15 cigarette excise tax rate. The State of Arkansas collects $4,842 in state and local tax collections per capita. Arkansas has $6,867 in state and local debt per capita and has an 85 percent funded ratio of public pension plans. Overall, Arkansas’s tax system ranks 38th on our 2024 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and Arkansas is no exception. The first step towards understanding Arkansas’s tax code is knowing the basics. How does Arkansas collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures 2024: How Does Your State Compare?
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Featured Articles
State and Local Sales Tax Rates, Midyear 2023
Compare the latest 2023 sales tax rates as of July 1st. Sales tax rate differentials can induce consumers to shop across borders or buy products online.
8 min read
State Corporate Income Tax Rates and Brackets, 2023
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.
6 min read
Facts & Figures 2023: How Does Your State Compare?
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
Unpacking the State and Local Tax Toolkit: Sources of State and Local Tax Collections (FY 2020)
The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
29 min read
2023 State Business Tax Climate Index
While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
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Americans Moved to Low-Tax States in 2022
The pandemic has accelerated changes to the way we live and work, making it far easier for people to move—and they have. As states work to maintain their competitive advantage, they should pay attention to where people are moving, and try to understand why.
5 min read
State Tax Changes Taking Effect January 1, 2023
Most of the 2023 state tax changes represent net tax reductions, the result of an unprecedented wave of rate reductions and other tax cuts in the past two years as states respond to burgeoning revenues, greater tax competition in an era of enhanced mobility, and the impact of high inflation on residents.
20 min read
Excise Taxes and Fees on Wireless Services Increase Again in 2022
While the wireless market has become increasingly competitive in recent years, resulting in steady declines in the average price for wireless services, the price reduction for consumers has been partially offset by higher taxes.
41 min read
The Efficiency of State Administration of Local Taxes
The logic that has prevailed for local sales taxes should apply equally to other taxes that localities impose on multijurisdictional businesses, including local tourism taxes. The evidence is clear that central administration of local taxes reduces compliance costs without sacrificing local revenue.
15 min read
Cigarette Taxes and Cigarette Smuggling by State, 2020
People respond to incentives. As tax rates increase or products are banned from sale, consumers and producers search for ways around these penalties and restrictions.
19 min read
States Should Make Full Expensing Permanent to Help Curb Inflation
In times of high inflation, states should consider adopting permanent full expensing because it boosts long-run productivity, economic output, and wages.
7 min read
Ranking State Tax Systems: Corporate Taxes
All corporate income taxes fall on capital investment, but the structure should not make matters worse, and policymakers should take care not to distort investment decisions through the use of targeted incentives for select firms or activities instead of a lower rate for all businesses.
2 min read
Do Unto Others: The Case for State Income Tax Reciprocity
Remote and flexible work opportunities are here to stay, whether states like it or not. With enhanced opportunities to take their job with them wherever they please, more workers can factor tax burdens into their decision of where to live.
15 min read
How High Are Taxes on Recreational Marijuana in Your State?
Recreational marijuana taxation is one of the hottest policy issues in the U.S. Currently, 19 states have implemented legislation to legalize and tax recreational marijuana sales.
5 min read
Cannabis Taxes Back on the Ballot in 2022
While changes to federal cannabis law are slow, changes at the state level are accelerating. Recreational cannabis is on the ballot in five states this November—Arkansas, Maryland, Missouri, North Dakota, and South Dakota—giving voters the ability to join 19 states that have already legalized recreational marijuana.
5 min read