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Deb is the head of marketing at Numeral. He has worked with the likes of Shopify and Wonderment and has helped countless ecommerce stores scale seamlessly. With a background in finance, he often finds himself advising stores on sales tax and good financial systems.
May 6, 2024 Reviewed by Reviewed byStay compliant and informed in 2023 with our Arkansas Sales Tax Guide, covering everything businesses need to know about compliance, rates, and regulations
In this articleStay compliant and informed in 2023 with our Arkansas Sales Tax Guide, covering everything businesses need to know about compliance, rates, and regulations
| State taxing authority | Arkansas Department of Finance and Administration |
|---|---|
| Arkansas base sales tax rate | 6.5% |
| Local tax rates | Vary by city and county from 0% to 5.125% |
| 2023 Arkansas sales tax rate | 6.5% to 11.625% |
| Tax threshold | $100,000 in annual sales or 200 separate sales transactions |
| Website | https://www.dfa.arkansas.gov/ |
| Tax Line | (501) 682-7104 |
The Arkansas sales tax rate in 2023 is 6.5%. This comprises a base rate of 6.5% plus a mandatory local rate that varies by jurisdiction from 0% to 6.125%. Depending on the local sales tax jurisdiction, the total tax rate can be as high as 11.625%.
You can look up the full table of sales tax rates in each city and county in Arkansas here.
| City | Sales Tax Rate |
|---|---|
| Fayetteville | 9.75% |
| Fort Smith | 9.5% |
| Little Rock | 8% |
To calculate Arkansas sales tax, you can use the following formula:
Sales tax = (6.5% + local rate) * purchase price
For instance, if the local rate is 5%, and the purchase price is $100, the sales tax would be $11.50.
If you file late and owe money to the state, you may be subjected to a 5% monthly penalty up to a maximum of 35%. If your filing happens on time, but the payment goes beyond the due dates, you must pay a 1% monthly penalty up to a maximum of 35%.
Arkansas is a destination-based sales tax state. This means the buyer's location determines the sales tax rate. Origin-based states use the seller's location to determine sales tax.
The Streamlined Sales Tax Project (SSTP) aims to simplify sales tax collection across states that adopt its Streamlined Sales and Use Tax Agreement (SSUTA), and Arkansas still needs to join the SSTP or implement the SSUTA.
| Type of nexus | Threshold |
|---|---|
| Physical presence | Any physical presence such as an office, warehouse, employees, etc. |
| Economic nexus | $100,000 in sales or 200 transactions |
| Nexus with marketplaces | More than $100,000 in sales facilitated by a marketplace |
Yes, wholesalers in Arkansas need a wholesale license if they only sell to other businesses. The wholesaler is responsible for collecting and remitting sales tax.
Yes, any seller that has nexus in Arkansas needs a sales tax permit, even if selling in the state temporarily such as at trade shows or festivals. The temporary seller must collect and remit Arkansas sales tax.
Yes, groceries are taxed at 0.125% in Arkansas. A bill to eliminate this tax was introduced but has yet to pass.
Clothing is taxable in Arkansas unless it qualifies as exempt work safety apparel.
Yes, digital products like music, movies, ebooks, and software are generally taxable in Arkansas.
While digital products are taxable, Arkansas does not tax SaaS businesses as of Nov 2023.
Services are generally not taxable in Arkansas and only taxed if they’re legally stated as being taxable.
Arkansas levies excise taxes on alcohol, tobacco, gasoline, diesel, and medical marijuana.
Arkansas does not have a general sales tax on food and beverages. However, there are excise taxes on some specific items:
Remote sellers with no physical presence in Arkansas must register and collect Arkansas sales tax if they meet the $100,000 or 200 transactions economic nexus threshold. The South Dakota vs. Wayfair ruling has impacted many states that now observe this economic threshold.
Arkansas has the following prepaid tax rates on fuel:
See prepaid tax rates for all fuel types here.
In addition to state sales tax, there are local city and county sales taxes levied in Arkansas. Local sales tax rates range from 0% to 5.125%, depending on jurisdiction. See a complete list of Arkansas local sales tax rates here.
Let's look at the steps to collect and remit sales tax in Arkansas properly.
Even if you do not have a physical presence in Arkansas, you likely need to register with the Department of Finance and Administration (DFA) if you make over $100,000 in sales or 200 transactions in the state.
This is known as economic nexus.
You can voluntarily register to collect and remit Arkansas sales tax even if you fall below the thresholds.
There are five common ways to reach nexus in Arkansas:
Register for an Arkansas seller's permit online through the DFA website. Once registered, you must collect and remit sales tax on sales delivered into the state, even if you do not have a physical Arkansas presence.
Yes, sellers must collect Arkansas sales tax on shipping charges. If the product being shipped is taxable, the shipping charge is also taxable.
Some things to note about taxing shipping charges:
All registered sellers must file Arkansas sales tax returns, even if no tax was collected during the period. Returns can be filed online through the DFA website or mailed in.
Payment must be submitted with the return. Arkansas accepts payment by check, money order, credit card, or electronic funds transfer (EFT).
Arkansas assigns a filing frequency of monthly, quarterly, or annually based on a seller's anticipated taxable sales volume.
The following due dates apply to Arkansas sales tax returns:
Monthly: Returns and payments are due by the 20th of the next month. For example, January sales tax is due by February 20.
| Period | Due Date |
|---|---|
| January | February 20 |
| February | March 20 |
| March | April 20 |
| April | May 20 |
| May | June 20 |
| June | July 20 |
| July | August 20 |
| August | September 20 |
| September | October 20 |
| October | November 20 |
| November | December 20 |
| December | January 20 |
Quarterly: Returns and payment are due by the 20th of the month following the end of the quarter.
| Period | Due Date |
|---|---|
| Jan-Mar | April 20 |
| April-June | July 20 |
| July-Sep | Oct 20 |
| Oct-Dec | January 20 |
Annual: The annual return for the entire calendar year is due January 20 of the following year.
| Period | Due Date |
|---|---|
| January 1 - December 31 (Year) | January 20 |
Late filing penalties in Arkansas are 5% of the tax due for each month the return is late, up to a maximum of 35%. If you file on time but pay after the due date, the penalties are 1% of the owed taxes every month up to 35%.
For returns filed more than 30 days late, there is a minimum $50 penalty, even if no tax is due.
Arkansas sales tax returns are due by the 20th day of the month following the reporting period end date.
For example, if the reporting period ends March 31, the return is due by April 20.
Arkansas sales tax due dates are the 20th of the month following the end of the reporting period. Due dates vary based on assigned filing frequency.
Yes, every registered seller must file a $0 return even if they did not collect sales tax for that period.
Taxpayers who do not file a federal extension can file an Arkansas extension using Form AR1055 before the filing due date of April 15th
You can file an amended return in Arkansas easily via the ATAP home. You must pay any additional tax due, plus interest and penalties.
The late filing penalty is 5% of unpaid monthly tax up to a maximum of 35%. There is also a $50 minimum penalty for returns filed over 30 days late.
The audit & appeals process is a series of steps a business must go through if they are audited by the Arkansas Department of Finance and Administration (DFA). The process begins with the auditor contacting the company to schedule an audit.
The auditor will then review the business's records and tax returns to determine if sales tax was not paid. If the auditor finds any discrepancies, they will report their findings.
The business then has the opportunity to appeal the findings. The company can appeal to the Arkansas Tax Appeals Commission if the appeal is denied.
The Arkansas sales tax audit process consists of the following key steps:
During a standard sales tax audit in Arkansas, the business should expect the auditor to review thoroughly:
The auditor thoroughly compares, verifies, and cross-checks this information to identify discrepancies, suggesting sales tax was collected but not properly reported and remitted.
If a business disagrees with the audit results, it can contest the findings by filing an appeal with the DFA within 30 days. Challenging audit findings in Arkansas helps you:
Here are the steps for registering for sales tax in Arkansas:
Registering for an Arkansas seller's permit involves applying to the Department of Finance and Administration (DFA) online or by mail. Go to the DFA website and locate the seller's permit registration page.
Once successfully registered, you will receive a welcome packet by mail containing your Arkansas seller's permit number. Now, you can legally collect and remit sales tax in Arkansas.
Online sellers must register for an Arkansas seller's permit if they:
There is a $50 fee to register for an Arkansas seller's permit. The state does not charge an application fee.
To register for a seller's permit in Arkansas, visit the state Department of Finance and Administration website at https://www.dfa.arkansas.gov/.
For sales tax filing and appeals in Arkansas, contact:
There you have it—a comprehensive guide on Arkansas' sales tax laws. Need help filing taxes for your ecommerce store? Get a demo with Numeral now.
Deb is the head of marketing at Numeral. He has worked with the likes of Shopify and Wonderment and has helped countless ecommerce stores scale seamlessly. With a background in finance, he often finds himself advising stores on sales tax and good financial systems.
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