Arkansas

Tax Rate Range: Low - 1.0%; High - 7.0% *
Income Brackets: Lowest - $3,999; Highest - $29,200
Number of Brackets: 6
Tax Credits: Single - $20; Married - $40; Dependents - $20
65 years of age or older - $20
Standard Deduction: Single - $2,000; Married filing jointly - $4,000
Medical/Dental Deduction: Same as Federal taxes
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security is exempt. Up to $6,000 in military, civil service, state/local government, and private pensions are exempt. The exemption refers to income from public or private retirement systems, plans or programs. IRA distributions can be included as part of the $6,000 exemption if the taxpayer is 59½ or older. Out-of-state government pensions also qualify for the exemption.
Retired Military Pay: Up to $6,000 of federal retirement pay and/or survivor benefits excluded.

State Tax Software

Military Disability Retired Pay:
Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

* A special tax table is available for low- income taxpayers reducing their tax payments.

Sales Taxes

State Sales Taxes: 6.0% (prescription drugs exempt). City and county sales taxes could add another 5.5%.
Gasoline Tax: 21.87 cents/gallon
Diesel Fuel Tax 22.8 cents/gallon
Cigarette Tax: 59 cents/pack of 20

Property Taxes

Arkansas property taxes are levied by counties, municipalities, and school districts. All households are eligible for a refund of up to $300 regardless of income or age. Political subdivisions collect taxes on real property (house and land) and personal property (motor vehicles, boats and motors, motorcycles and all-terrain vehicles). Assessment is based on 20 percent of the true market value. The taxable assessed value of homesteads will not increase more than 5% above the previous taxable assessed value except when new additions or substantial improvments are made to the property. However, the taxable value of the homestead will continue to increase each year until it equals 20% of market value. The taxable assessed value of homesteads of residents aged 65 or older, or those who are disabled are capped at the previous year value unless improvements are made or the property is sold.

Estate Taxes

Estates are taxed based on the federal estate tax law. The Arkansas tax equals the credit allowed for state death taxes on the federal estate return. Since the state tax is completely offset, there is no additional tax due. There is no inheritance tax.

For further information, visit the Arkansas Department of Finance and Administration site or call 501-682-7225. For general tax information, click here. For a booklet on moving to Arkansas, click here.