Arkansas vs Federal Tax Comparison
| Tax Type | AR State Rate | Federal Rate | Notes |
|---|---|---|---|
| Personal Income Tax | 2–3.9% | Federal: 10–37% | Combined fed+state applies |
| Corporate Income Tax | 4.8% | Federal: 21% | 4.8% (reduced from 5.3% in 2024) |
| State Sales Tax | 6.5% | No federal sales tax | Combined avg: 9.43% |
| Capital Gains Tax | 3.9% | Federal: 0–20% | Same as income tax |
About Arkansas Taxes
Ongoing rate reductions; top rate dropped to 3.9% in 2024.
Arkansas levies income tax at rates from 2–3.9%. The progressive bracket system means higher earners pay a larger percentage on income above each threshold.
Corporate activity in Arkansas faces a 4.8% state corporate tax rate. 4.8% (reduced from 5.3% in 2024). Combined with the 21% federal corporate rate, businesses should plan accordingly.
Calculate Your Net Salary in Arkansas
See federal + AR state tax deductions, Social Security, Medicare, and take-home pay
Open US Salary CalculatorFrequently Asked Questions — Arkansas Taxes
What are Arkansas's income tax brackets for 2026?
Arkansas has a progressive income tax ranging from 2–3.9%. The top rate of 3.9% applies to the highest income bracket. Filers should check the current threshold amounts on the Arkansas Department of Revenue website.
What is the corporate income tax rate in Arkansas?
Arkansas imposes a corporate income tax at 4.8%. 4.8% (reduced from 5.3% in 2024). Businesses should also account for federal corporate tax at 21% on top of the state rate.
What is the sales tax rate in Arkansas?
Arkansas has a state sales tax of 6.5%. When local city and county taxes are included, the average combined rate reaches 9.43%. Rates vary by locality so check the specific municipality for accurate figures.
How does Arkansas compare to neighboring states for taxes?
Arkansas's overall tax burden ranks favorably among US states. The state levies income tax at up to 3.9%. For individuals evaluating relocation or remote work, comparing the full picture — income, sales, and property taxes — is essential. Use our US Salary Calculator to estimate your net income in Arkansas.
Are there any special tax incentives or exemptions in Arkansas?
Arkansas offers notable tax characteristics: Ongoing rate reductions; top rate dropped to 3.9% in 2024. Businesses and individuals should consult a qualified tax advisor to understand eligibility for available credits, deductions, and incentives specific to Arkansas.
Cost of Living in Arkansas
Tax rates are only part of the picture — explore city-level cost of living data:
Little Rock Fort Smith FayettevilleCompare Other US States
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