Arkansas Sales Tax Guide

Did you know that Arkansas has the 5th highest state sales tax rate in the United States, standing at a substantial 6.5%? When combined with local taxes, this rate can reach an average of 9.46%, making Arkansas one of the states with the highest sales tax burdens​.

For businesses operating in or selling to Arkansas, understanding and managing this sales tax landscape is not just a legal necessity but a strategic advantage. Missteps in sales tax compliance can lead to significant penalties and financial setbacks. 

In this guide, we’ll break down the essentials of Arkansas sales tax, providing you with a clear roadmap to understand these complexities. Let’s dive in and take the first step toward mastering Arkansas sales tax!

Section 1: Determining Sales Tax Nexus in Arkansas

This section outlines the criteria for establishing a sales tax nexus with Arkansas. We explained how businesses can determine if they’re required to collect and remit sales tax in the state based on their economic activity. Additionally, we covered the specific steps businesses need to take to comply with Arkansas sales tax regulations once nexus is established.

What is Arkansas Sales Tax Nexus?

Arkansas Sales Tax Nexus is the legal requirement for out-of-state businesses to collect and remit sales tax on purchases made by Arkansas residents. This obligation arises when a business establishes a sufficient connection, or “nexus,” to the state. 

Do You Need a Sales Tax Permit to Sell Online from or to Arkansas?

Yes, you need a sales tax permit to sell online in or to Arkansas. If your business meets certain sales volume or physical presence thresholds in Arkansas, you must charge and remit sales tax on purchases made by Arkansas residents. This typically requires obtaining a sales tax permit from the Arkansas Department of Finance and Administration. It’s important to note that even if you don’t have a physical location in the state, you might still owe sales tax if you participate in affiliate marketing or use online marketplaces like Amazon or eBay that facilitate sales to Arkansas customers.

What Triggers or Creates a Sales Tax Nexus in Arkansas?

Nexus in Arkansas can be created through a physical presence (like an office or warehouse) or by exceeding certain economic thresholds for sales or transactions within Arkansas. Businesses surpassing $100,000 in sales or 200 transactions in a year generally meet the economic nexus criteria. Additionally, online marketplaces may be responsible for collecting sales tax on behalf of third-party sellers.

In Arkansas, nexus can be established in two primary ways:

1. Physical Presence Nexus: This includes having a physical presence such as an office, store, warehouse, or inventory stored in the state. Employees, agents, or representatives working in Arkansas can also create a physical nexus.
2. Economic Nexus: Under Act 822, if your sales into Arkansas exceed $100,000 or if you have 200 or more separate transactions in a calendar year, you are considered to have economic nexus. This rule applies even if you have no physical presence in the state​​.

What is the Arkansas Sales Tax Economic Nexus Threshold?

Arkansas has an economic nexus threshold of $100,000 in sales or 200 transactions within the state per calendar year. This means that if a remote seller or marketplace facilitator exceeds either of these amounts, they are required to collect and remit Arkansas sales and use tax.

Arkansas Sales Tax Nexus Requirements

Arkansas’s sales tax nexus laws have significantly evolved in recent years. Prior to 2018, businesses generally needed a physical presence within the state, such as a warehouse or office, to be required to collect and remit sales tax. 

However, the Supreme Court’s Wayfair decision changed this, allowing states to impose sales tax obligations on remote sellers based on economic activity. Arkansas adopted this approach, establishing economic nexus thresholds. This means businesses can now be required to collect sales tax in Arkansas even without a physical presence if their sales within the state exceed certain limits as mentioned above.

Arkansas Sales Tax Nexus Calculator

To simplify compliance with Arkansas sales tax laws, you can use a sales tax nexus calculator. These tools help determine if your business has reached the economic thresholds for nexus in Arkansas. By entering your sales data, including total sales revenue and the number of transactions in Arkansas, the calculator provides an accurate assessment of your nexus status.

Using a sales tax nexus calculator is straightforward. First, input your total sales revenue and the number of transactions for Arkansas. The calculator will then compare your data against the state’s economic nexus thresholds of $100,000 in revenue or 200 transactions. 

Based on these results, the calculator will indicate whether you need to register for a sales tax permit and start collecting sales tax in Arkansas.

Read: The Ultimate Guide to Managing Sales Tax Compliance for Every State in The US

Section 2: Understanding Sales Taxability Exemptions and Resale Certificates

This section provides a comprehensive overview of Arkansas exemption certificates. We cover the key differences between resale and exemption certificates, detailing what items are taxable or exempt under Arkansas law. We also explain the certificate’s validity, required information, and acquisition process. Additionally, we address common misconceptions about out-of-state sellers and outline the eligibility criteria for nonprofit organizations to obtain tax exemptions on specific purchases.

Who is Exempt from Sales Tax in Arkansas ((Who Qualifies for Sales Tax Exemption in Arkansas?)

Arkansas offers sales tax exemptions to several entities and for specific purchases. Generally, government agencies, many nonprofit organizations, and businesses buying goods for resale are exempt. Additionally, certain items like prescription drugs and some food items may not be subject to sales tax. Common exemptions include:

• Governmental Entities: Federal, state, and local government agencies are generally exempt from paying sales tax.
• Non-Profit Organizations: Qualifying non-profits, such as religious institutions, educational organizations, and certain charitable organizations, can receive sales tax exemptions for purchases used in their non-profit activities.
• Agricultural Exemptions: Farmers and agricultural producers may be exempt from sales tax on items like feed, seed, fertilizer, and certain machinery used in farming​​.
• Resellers: Businesses purchasing goods for resale often have sales tax exemptions.
• Specific purchases: Certain items, like prescription drugs or food stamps purchases, might be exempt.

What is Arkansas Sales Tax Exemption Certificate?

An Arkansas Sales Tax Exemption Certificate is a document that allows certain businesses and organizations to make purchases without paying sales tax. To qualify, an entity must typically be a reseller, government agency, nonprofit, or meet other specific criteria outlined in Arkansas state law. The certificate must be completed and presented to the seller at the time of purchase, who is then responsible for verifying its validity.

What Goods Are Taxable in Arkansas (List of Taxable Goods)?

In Arkansas, the general rule is that sales tax must be collected on all tangible personal property sold to consumers. This includes items such as:

• Clothing and Apparel: Shirts, pants, dresses, shoes, and accessories.
• Electronics: Televisions, computers, smartphones, and home appliances.
• Furniture: Sofas, beds, tables, and chairs.
• Household Goods: Kitchenware, cleaning supplies, and home decor.
• Books and Stationery: Textbooks, notebooks, pens, and other school supplies.

However, there are exceptions for specific items, particularly those used in certain industries like agriculture and manufacturing. For example, some farm machinery and equipment used directly in agricultural production may be exempt from sales tax​.

What Services Are Taxable in Arkansas? (List of Taxable Services in Arkansas)

Common taxable services include utilities like gas, water, and electricity; telecommunications such as phone and prepaid services; repairs for electronics, appliances, and vehicles; health and fitness activities like gym memberships; storage in self-storage units; and other services like pest control, cleaning, and pet grooming.

Other common services, such as professional services (legal, accounting, consulting), personal services (haircuts, spa treatments), and real estate services, are generally not subject to sales tax in Arkansas​​.

Arkansas levies sales tax on specific services, unlike most goods which are generally taxable by default. 

What Is Excluded from Sales Tax in Arkansas? (Non Taxable Items)

Several categories of goods and services are specifically excluded from sales tax in Arkansas. These include:

• Prescription Drugs and Medical Devices: Medicines prescribed by a doctor and medical devices like insulin pumps.
• Certain Agricultural Supplies: Items such as seeds, fertilizers, and other agricultural inputs used directly in farming.
• Food Items: While most groceries are taxable, certain essential food items like raw fruits, vegetables, and meats may be taxed at a reduced rate or exempt.
• Educational Materials: Textbooks and other educational materials purchased by students or educational institutions.

​.

How Does an Arkansas Sales Tax Exemption Form Look Like?

An Arkansas sales tax exemption form is a document used by eligible businesses and individuals to make tax-free purchases. This form typically requires information about the buyer, seller, and items being purchased. It also includes a declaration by the buyer that the items will be used for a tax-exempt purpose.

In detail, the form typically includes the following sections:

• Purchaser Information: This section requires the buyer’s name, address, and Arkansas Sales Tax Permit Number.
• Seller Information: Details about the seller, including their name and address.
• Description of Goods: A description of the items being purchased and the reason for the exemption.
• Certification Statement: A declaration that the purchaser will use the items in a tax-exempt manner, signed by the purchaser.

Types of Sales Tax Exemption Forms

1. ST-391 Sales Tax Exemption Certificate: Used for general tax-exempt purchases.
2. ST-403 Commercial Farm Exemption Certificate: Specifically for agricultural producers to claim exemptions on farm equipment and supplies.
3. Streamlined Sales Tax Certificate of Exemption: Used by out-of-state purchasers making tax-exempt purchases in Arkansas.

These forms are accessible on the Arkansas Department of Finance and Administration website and provide a structured way to document and validate tax-exempt purchases​​.

Arkansas Sales Tax Exemption Chart PDF

Arkansas provides a comprehensive chart detailing various sales tax exemptions applicable within the state. This chart includes:

• Types of Goods and Services: Items that are exempt from sales tax, such as certain agricultural supplies, prescription drugs, and manufacturing equipment.
• Specific Exemptions: Details on specific exemptions for non-profits, government entities, and educational institutions.

The chart is available for download as a PDF on the DFA’s website, offering a clear and detailed guide to help you understand which purchases qualify for exemptions and how to apply for them.

Does Arkansas Accept Out of State Sales Tax Exemption Certificates?

Yes, Arkansas generally honors out-of-state sales tax exemption certificates. However, the specific requirements vary depending on the reason for the exemption (e.g., resale, government, education). While businesses often use resale certificates to claim exemption on purchases for resale, other exemptions may have different rules. As an Arkansas seller, you’d have to verify the validity of these certificates.

Arkansas Sales Tax Exemption Certificate for Nonprofit

Nonprofits in Arkansas are generally subject to sales tax. However, some organizations like churches, charities, and food banks might qualify for exemptions, though this isn’t automatic. To be exempt, these nonprofits typically need to meet specific criteria and provide necessary documentation. Lastly, holding a 501(c)(3) status from the IRS is often a requirement, but it doesn’t automatically grant sales tax exemption in Arkansas.

How to Apply for a Sales Tax Exemption Certificate in Arkansas

To apply for an Arkansas sales tax exemption certificate, follow these step by step guide:

1. Determine Eligibility: Verify if your business meets the criteria for a sales tax exemption in Arkansas.
2. Obtain IRS Determination Letter & Other Necessary Documents: Ensure your nonprofit has received its 501(c)(3) status from the IRS. This letter confirms your organization’s federal tax-exempt status.
3. Complete the Exemption Form: Fill out the Arkansas Sales and Use Tax Exemption Certificate (GR-53) or the(Form ST-391 for general exemption or Form ST-403 for commercial farm exemption). These forms are available on the Arkansas Department of Finance and Administration (DFA) website.
4. Submit Required Documentation: Along with the completed form, you may need to submit additional documentation, such as your IRS determination letter, articles of incorporation, and bylaws.
5. Send to DFA: Submit the application and supporting documents to the Arkansas DFA. This can typically be done online or by mail.

Once approved, the DFA will issue a sales tax exemption certificate that your organization can use when making qualifying purchases.

Is an Arkansas Seller’s Permit the Same as a Tax-Exempt Certificate?

No, an Arkansas Seller’s Permit and a Tax-Exempt Certificate are not the same.:

A Seller’s Permit is a license required for businesses selling tangible personal property within Arkansas. It authorizes the collection and remittance of sales tax to the state. Conversely, a Tax-Exempt Certificate is provided by purchasers who are exempt from paying sales tax, such as government agencies, non-profits, or businesses buying for resale. Sellers use this certificate to justify not charging sales tax on the purchase.

While both documents are essential for different aspects of sales tax management, they are not interchangeable. Businesses need a seller’s permit to operate legally, whereas tax-exempt entities use exemption certificates to avoid paying sales tax on qualified purchases.

Arkansas Sales Tax Exemption for Manufacturing

Arkansas provides a sales tax exemption for manufacturing machinery and equipment used directly in the manufacturing process. This exemption applies to machinery and equipment used in various stages of manufacturing, including production, fabrication, processing, assembly, finishing, or packaging products. 

Key qualifying items include molds, frames, cavities, forms, dies, tools, and devices that determine the physical characteristics of a product at any stage in the manufacturing process. 

Additionally, testing equipment used to measure the quality of the product during manufacturing is also exempt​​.

Arkansas Act 465 phased in a reduction of the sales and use tax rate on manufacturing machinery and equipment over several years, culminating in a full exemption beginning July 1, 2022. This exemption aims to support the state’s manufacturing sector by reducing the cost of capital investments and operational expenses related to machinery and equipment​.

How Can I verify the Validity of an Arkansas Sales Tax Exemption Certificate?

To verify an Arkansas Sales Tax Exemption Certificate validity, you can use the following method:

1. Access the Arkansas Department of Finance and Administration website.
2. Navigate to the Sales and Use Tax section.
3. Look for a verification tool or option. This might be labeled as “Validate Sales Tax Permit” or something similar.
4. Enter the reseller’s permit ID number or Streamlined Sales Tax number.
5. The system will indicate whether the certificate is valid.

What Information is Needed to Verify an Arkansas Sales Tax Exemption Certificate?

To verify an Arkansas sales tax exemption certificate, you typically need the following information:

• Certificate Number: A unique identifier assigned to the certificate.
• Business Name: The legal name of the business claiming the exemption.
• Business Address: The physical address of the business.
• Exemption Type: The specific reason for the tax exemption (e.g., resale, government entity, religious organization).
• Certificate Expiration Date: The date when the certificate becomes invalid.
• Authorized Signature: The signature of the person authorized to claim the exemption.

• Seller Information: The name and contact information of the seller who received the certificate.
• Purchase Details: Description of the items purchased and the total amount.

Does Arkansas Sales Tax Exemption Certificate Expire?

Arkansas sales tax exemption certificates generally do not have an expiration date. However, there are exceptions such as blanket exemption certificates, that are used for ongoing business relationships, and always remain valid for up to a year without renewal, that is, don’t require renewal as long as sales occur within a 12-month period.. The other exceptions are specific exemptions that may have different rules, such as time limits or qualifying conditions. For instance, exemptions for certain industries or purchases could have different expiration timelines.It’s essential to check the specific exemption for any particular purchase.

What is the Sales Tax Exemption for Farming in Arkansas?

In Arkansas, there is a specific sales tax exemption for farm machinery and equipment used exclusively and directly in the production of food or fiber as a commercial business. This exemption applies to both new and used farm machinery and equipment. 

Examples of qualifying items include tractors, plows, harvesters, and irrigation systems. 

To claim this exemption, farmers must use the Commercial Farm Exemption Certificate (Form ST-403), which verifies that the purchases meet the state’s criteria for agricultural use​.

What is an Arkansas Resale Certificate?

An Arkansas resale certificate allows businesses to purchase goods tax-free if the goods are intended for resale. When making a tax-exempt purchase, the buyer must provide the seller with a completed resale certificate, which includes the buyer’s business information and sales tax permit number. 

This certificate ensures that sales tax is collected only once, at the point of sale to the final consumer. The ST-391 Sales Tax Exemption Certificate is commonly used for this purpose. Resale certificates must be filled out accurately to avoid compliance issues during audits​.

How Much Does an Arkansas Resale Permit Cost?

Obtaining a resale permit in Arkansas, known as a sales tax permit, involves a one-time registration fee. The cost for this permit is generally around $50. 

Businesses can apply for the permit online through the Arkansas Taxpayer Access Point (ATAP) or by mailing in the Revenue Receipt Tax Application (Form ET-1) available on the Arkansas Department of Finance and Administration (DFA) website. Once issued, the permit allows businesses to collect and remit sales tax, and to make tax-exempt purchases for resale​.

How Long Does It Take to Get an Arkansas Resale License?

Obtaining an Arkansas resale license, also known as a sales tax permit, typically takes between 8 to 10 business days for processing once the application has been submitted. You can apply for the resale license online through the Arkansas Taxpayer Access Point (ATAP) system, which is the recommended method for faster processing. Alternatively, you can submit a paper application, but this might take longer to process​​.

How Do You Get a Resale License Number in Arkansas? (Application)

To get a resale license number in Arkansas, follow these steps:

1. Online Registration via ATAP:
   • Visit the Arkansas Taxpayer Access Point (ATAP).
   • Click on “Sign Up” and enter your business information, including your SSN or ITIN, business entity type, and NAICS code.
   • Pay the $50 application fee electronically.
2. Required Information:
   • Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
   • Business identification information.
   • Type of business entity.
   • Nature of your business.
3. Submission:
   • Submit the application online for faster processing.
   • Alternatively, you can fill out a paper application available on the Arkansas Department of Finance and Administration (DFA) website and mail it in.

Upon approval, you will receive your Arkansas sales tax permit, which includes your resale license number​.

How to Verify an Arkansas Sales Tax Resale Certificate

Verifying an Arkansas sales tax resale certificate involves ensuring that the certificate provided by a buyer is valid and current. Here are the steps to verify a resale certificate:

1. Check the Certificate:
   • Ensure all required fields are filled out, including the buyer’s sales tax permit number, the seller’s name and address, and a detailed description of the goods being purchased.
2. Verify the Sales Tax Permit Number:
   • Contact the Arkansas Department of Finance and Administration (DFA) or use their online resources to verify the buyer’s sales tax permit number. You can call the DFA at (501) 683-2827 or use the ATAP system.
3. Review the Validity Period:
   • Resale certificates in Arkansas do not have a set expiration date, but it’s good practice to ensure they are reviewed periodically, especially if not used within 12 months. Make sure the business details such as the name and address are up-to-date.

By following these steps, you can ensure that the resale certificates you accept are valid and help avoid potential tax liabilities​.

Section 3: Understanding Sales Tax Rates

This section provides a comprehensive overview of sales tax in Arkansas. We break down the state’s base sales tax rate and explain how local taxes can increase the overall cost. You’ll find tools to determine exact tax rates for any location, calculate taxes on purchases, and identify areas with higher tax burdens. We also include a detailed county-by-county breakdown of sales tax rates with corresponding zip codes.

What is Arkansas Sales Tax Rate? (How Much is It)

As of 2024, the Arkansas state sales tax rate is 6.5% while the the average combined state and local sales tax rate in Arkansas is approximately 9.148%​.

Local jurisdictions in Arkansas are allowed to impose additional local sales taxes. These local taxes can add up to 6.125% to the state rate, making the maximum possible combined sales tax rate 12.625%. 

How to Find or Lookup Your Arkansas Sales Tax Rate

You can find or look up your specific Arkansas sales tax rate by using several tools and resources. 

One valuable resource is the Arkansas Taxpayer Access Point (ATAP). This online system allows you to register for tax permits, file returns, and make payments. Additionally, ATAP provides access to various tax rate lookup tools and resources, making it easier to determine the applicable sales tax rate for your transactions. You can access ATAP through the Arkansas Department of Finance and Administration (DFA) website​​.

Another essential resource is the Department of Finance and Administration (DFA). The Arkansas DFA offers a comprehensive list of city and county sales tax rates, which are regularly updated to reflect any changes in local tax rates. This ensures that you have the most accurate and current information for calculating sales tax. 

How to Calculate Arkansas Sales Tax Rate

To calculate the sales tax rate in Arkansas, you need to consider both the state and local components. Here’s how you can do it:

1. Identify the State Sales Tax Rate: Start with the base rate of 6.5%.
2. Add the Local Sales Tax Rate: Determine the applicable local sales tax rate for the specific address where the sale is taking place. For example, if a city has a local tax rate of 2.5%, add this to the state rate.

Example Calculation:

• State Sales Tax Rate: 6.5%
• Local Sales Tax Rate: 2.5%
• Total Sales Tax Rate: 6.5% + 2.5% = 9.0%

To get an accurate rate for a specific location, you can use online tools like the AtomicTax Calculator, which allows you to enter the ZIP code or address to determine the exact sales tax rate for that location​​.

What City Has the Highest Sales Tax Rate in Arkansas?

The city with the highest sales tax rate in Arkansas is Gillham, with a combined rate of up to 12.625%. This includes the state base rate of 6.5% and the maximum local rates imposed by the city and county governments. Other cities with high sales tax rates include parts of Madison, Lonoke, and Mississippi counties, which also have combined rates reaching up to 11%.​.

Arkansas Sales Tax by County and Zip Codes

Arkansas has 75 counties in all and it has a state sales tax rate of 6.5%, but local jurisdictions (counties, cities, and special districts) can impose additional sales taxes. This results in a combined sales tax rate that varies significantly across different areas. Here’s a detailed overview:

County Name	Tax Rate	ZIP Codes
Arkansas County	11%	72003, 72026, 72038, 72042, 72048, 72055, 72073, 72134, 72140, 72160, 72166
Ashley County	11%	71631, 71635, 71642, 71646, 71655, 71658, 71663, 71670, 71671, 71674
Baxter County	9.875%	72623, 72626, 72635, 72642, 72651, 72653, 72658, 72661, 72669
Benton County	9.75%	72712, 72714, 72715, 72719, 72722, 72732, 72734, 72736, 72739, 72745, 72747, 72756, 72758, 72761, 72764, 72768, 72769
Boone County	9.5%	72601, 72611, 72616, 72624, 72633, 72644, 72662, 72670, 72682
Bradley County	10.5%	71642, 71646, 71660, 71662, 71671, 71677
Calhoun County	10.125%	71740, 71744, 71768
Carroll County	9.375%	72611, 72616, 72631, 72632, 72638, 72640, 72650, 72655, 72660, 72682
Chicot County	10.5%	71638, 71640, 71653, 71654, 71676
Clark County	10%	71921, 71923, 71929, 71933, 71940, 71941, 71943, 71949, 71950, 71957, 71962, 71998, 71999
Clay County	10%	72421, 72422, 72426, 72430, 72433, 72434, 72436, 72439, 72440, 72450, 72454, 72461, 72466, 72470
Cleburne County	9.625%	72067, 72088, 72130, 72131, 72132, 72149, 72530, 72543, 72545, 72546, 72554
Cleveland County	10.75%	71638, 71639, 71642, 71652, 71658, 71665
Columbia County	10.375%	71740, 71742, 71743, 71749, 71753, 71754, 71758, 71764, 71770, 71771, 71772
Conway County	11.25%	72001, 72010, 72027, 72029, 72057, 72070, 72110, 72127, 72156, 72157, 72833
Craighead County	10.5%	72401, 72404, 72411, 72412, 72414, 72416, 72417, 72419, 72421, 72427, 72437, 72442, 72450, 72458, 72467
Crawford County	10.25%	72921, 72923, 72927, 72932, 72933, 72935, 72936, 72937, 72938, 72940, 72946, 72947, 72948, 72956
Crittenden County	11.25%	72301, 72321, 72325, 72327, 72331, 72332, 72342, 72346, 72348, 72359, 72364, 72376, 72384, 72386, 72392, 72394
Cross County	10.5%	72324, 72330, 72338, 72347, 72354, 72385, 72386, 72387, 72421, 72422
Dallas County	10%	71721, 71728, 71740, 71742, 71744, 71749, 71764
Desha County	11%	71631, 71640, 71654, 71674, 71675
Drew County	9.75%	71638, 71655, 71658, 71670, 71671
Faulkner County	9.75%	72032, 72034, 72039, 72058, 72060, 72061, 72067, 72080, 72081, 72106, 72113, 72173, 72181
Franklin County	10.5%	72820, 72821, 72822, 72833, 72837, 72927, 72933, 72938, 72949
Fulton County	11.5%	72524, 72534, 72536, 72538, 72554, 72578
Garland County	9.5%	71901, 71902, 71903, 71909, 71910, 71913, 71914, 71929, 71933, 71949, 71956, 71964, 71968
Grant County	9.75%	72011, 72037, 72084, 72150, 72167
Greene County	9.375%	72412, 72425, 72427, 72430, 72432, 72436, 72437, 72439, 72444, 72450, 72451, 72453, 72474
Hempstead County	10%	71801, 71802, 71820, 71822, 71825, 71826, 71827, 71831, 71838, 71845, 71852, 71859, 71862
Hot Spring County	11%	71901, 71913, 71921, 71923, 71929, 71933, 71941, 71956, 71968
Howard County	10.25%	71833, 71840, 71841, 71842, 71851, 71852, 71853, 71854, 71855, 71862
Independence County	11%	72501, 72503, 72521, 72523, 72524, 72526, 72527, 72528, 72529, 72532, 72534, 72536, 72538, 72539, 72543, 72550, 72554, 72555, 72560, 72561, 72565, 72566, 72579, 72585
Izard County	11.5%	72512, 72517, 72519, 72520, 72521, 72523, 72528, 72531, 72532, 72534, 72538, 72539, 72540, 72553, 72556, 72562, 72565, 72573, 72578
Jackson County	10.25%	72006, 72010, 72042, 72044, 72051, 72060, 72067, 72068, 72072, 72075, 72076, 72112, 72119, 72124, 72125, 72126, 72127, 72131, 72136, 72140, 72147, 72150, 72156, 72157, 72168, 72175, 72177, 72178, 72179, 72183, 72210, 72223, 72227, 72231, 72236, 72260, 72277, 72295
Jefferson County	10%	71601, 71602, 71603, 71611, 71612, 71613, 71630, 71631, 71635, 71638, 71639, 71640, 71642, 71646, 71652, 71653, 71655, 71658, 71659, 71660, 71661, 71662, 71663, 71665, 71666, 71667, 71670, 71671, 71674, 71675
Johnson County	9.5%	72830, 72839, 72845, 72851, 72852, 72855, 72860, 72863, 72865
Lafayette County	9.75%	71801, 71822, 71827, 71838, 71845, 71846, 71855
Lawrence County	11%	72410, 72416, 72421, 72427, 72428, 72430, 72432, 72433, 72434, 72436, 72438, 72441, 72445, 72447, 72449, 72456, 72458, 72461, 72469, 72470, 72476, 72479, 72482, 72485
Lee County	9.5%	72338, 72342, 72348, 72352, 72366, 72368, 72369, 72390, 72394
Lincoln County	11.5%	71601, 71602, 71603, 71611, 71612, 71613, 71630, 71631, 71635, 71638, 71639, 71640, 71642, 71646, 71652, 71653, 71655, 71658, 71659, 71660, 71661, 71662, 71663, 71665, 71666, 71667, 71670, 71671, 71674, 71675
Little River County	11.375%	71801, 71820, 71822, 71825, 71826, 71827, 71831, 71838, 71845, 71852, 71859, 71862
Logan County	10.5%	72821, 72824, 72826, 72835, 72837, 72838, 72841, 72842, 72852, 72855, 72863
Lonoke County	11%	72007, 72024, 72037, 72046, 72072, 72083, 72085, 72102, 72116, 72120, 72176, 72180, 72183
Madison County	11%	72740, 72742, 72750, 72752, 72756, 72773, 72776
Marion County	10.25%	72623, 72628, 72633, 72639, 72641, 72645, 72653, 72662
Miller County	10.25%	71801, 71854, 71858, 71862
Mississippi County	11%	72310, 72313, 72315, 72316, 72319, 72321, 72325, 72330, 72338, 72339, 72347, 72350, 72351, 72355, 72358, 72364, 72365, 72366, 72368, 72370, 72373, 72374, 72376, 72377, 72383, 72386, 72391, 72392, 72395
Monroe County	10.5%	72029, 72069, 72078, 72108, 72134, 72165, 72168, 72169, 72173, 72178, 72183
Montgomery County	10.5%	71933, 71943, 71946, 71957, 71960, 71961, 71962
Nevada County	10.5%	71725, 71743, 71753, 71833, 71858
Newton County	9.5%	72624, 72628, 72630, 72631, 72633, 72639, 72641, 72645, 72650, 72655
Ouachita County	10.5%	71701, 71711, 71724, 71726, 71731, 71740, 71742, 71747, 71751, 71758, 71762
Perry County	10.25%	72070, 72110, 72125, 72126, 72131, 72157, 72166
Phillips County	10.5%	72310, 72320, 72328, 72331, 72338, 72339, 72340, 72346, 72351, 72358, 72359, 72360, 72365, 72366, 72367, 72370, 72375, 72383, 72386, 72390, 72392, 72396
Pike County	10%	71921, 71923, 71940, 71950, 71958, 71959, 71961, 71965
Poinsett County	10.25%	72310, 72312, 72313, 72315, 72316, 72317, 72319, 72320, 72321, 72322, 72324, 72326, 72327, 72329, 72330, 72331, 72332, 72335, 72336, 72337, 72338, 72339, 72340, 72341, 72342, 72344, 72345, 72346, 72347, 72348, 72349, 72350, 72351, 72352, 72353, 72354, 72355, 72356, 72357, 72358, 72359, 72360, 72361, 72362, 72363, 72364, 72365, 72366, 72367, 72368, 72369, 72370, 72371, 72372, 72373, 72374, 72375, 72376, 72377, 72378, 72379, 72380, 72381, 72382, 72383, 72384, 72385, 72386, 72387, 72388, 72389, 72390, 72391, 72392, 72393, 72394, 72395, 72396, 72397, 72398, 72399
Polk County	10.5%	71932, 71937, 71944, 71945, 71953, 71972
Pope County	9.5%	72801, 72802, 72823, 72824, 72827, 72830, 72832, 72834, 72837, 72840, 72845, 72847, 72858, 72860, 72863
Prairie County	11%	72005, 72021, 72028, 72036, 72040, 72041, 72044, 72059, 72063, 72064, 72069, 72074, 72079, 72101, 72107, 72108, 72110, 72118, 72122, 72123, 72126, 72128, 72135, 72140, 72144, 72156, 72157, 72160, 72165, 72166, 72167, 72173, 72179, 72182, 72183, 72186, 72190, 72199
Pulaski County	9.5%	72002, 72011, 72012, 72015, 72019, 72022, 72023, 72046, 72053, 72076, 72078, 72079, 72082, 72083, 72087, 72103, 72106, 72107, 72110, 72113, 72114, 72115, 72116, 72117, 72118, 72119, 72120, 72122, 72124, 72126, 72127, 72130, 72132, 72135, 72142, 72143, 72147, 72150, 72152, 72153, 72156, 72157, 72164, 72167, 72168, 72173, 72180, 72183, 72199
Randolph County	10%	72432, 72435, 72455, 72460, 72465, 72466, 72469, 72470, 72476
Saline County	10.5%	72002, 72011, 72015, 72018, 72019, 72022, 72023, 72024, 72033, 72065, 72067, 72072, 72076, 72087, 72089, 72103, 72113, 72114, 72116, 72117, 72118, 72119, 72120, 72122, 72123, 72126, 72127, 72129, 72132, 72135, 72136, 72140, 72143, 72145, 72149, 72153, 72155, 72160, 72164, 72167, 72168, 72173, 72179, 72181, 72199
Scott County	9.5%	72922, 72923, 72927, 72933, 72936, 72937, 72938, 72941, 72950
Searcy County	9.5%	72624, 72633, 72639, 72645, 72650, 72655, 72660, 72663
Sebastian County	11%	72901, 72902, 72903, 72904, 72905, 72906, 72908, 72916, 72918, 72923, 72936, 72937, 72938, 72940, 72941, 72943, 72944, 72945, 72947, 72950, 72951, 72956, 72957, 72958
Sevier County	12.625%	71820, 71822, 71823, 71825, 71826, 71827, 71832, 71833, 71834, 71836, 71838, 71839, 71840, 71841, 71842, 71845, 71846, 71847, 71851, 71852, 71853, 71854, 71855, 71857, 71858, 71859, 71861, 71862, 71863, 71865, 71866
Sharp County	10.875%	72513, 72522, 72525, 72529, 72531, 72532, 72534, 72536, 72538, 72539, 72540, 72543, 72545, 72546, 72550, 72553, 72555, 72557, 72560, 72561, 72562, 72564, 72565, 72567, 72568, 72571, 72572, 72573, 72575, 72576, 72578, 72579, 72581, 72582, 72583, 72584, 72585, 72587, 72589, 72592, 72594
St Francis County	11.5%	72310, 72312, 72315, 72320, 72322, 72323, 72325, 72326, 72327, 72328, 72330, 72332, 72333, 72335, 72336, 72337, 72338, 72339, 72341, 72342, 72343, 72344, 72345, 72346, 72347, 72348, 72350, 72351, 72352, 72353, 72354, 72355, 72358, 72359, 72360, 72361, 72362, 72363, 72364, 72365, 72366, 72367, 72368, 72369, 72370, 72371, 72372, 72373, 72374, 72375, 72376, 72377, 72378, 72379, 72380, 72381, 72382, 72383, 72384, 72385, 72386, 72387, 72388, 72389, 72390, 72391, 72392, 72393, 72394, 72395, 72396, 72397, 72398, 72399
Stone County	10%	72522, 72523, 72528, 72529, 72531, 72532, 72534, 72536, 72538, 72539, 72540, 72543, 72544, 72545, 72546, 72550, 72553, 72555, 72557, 72560, 72561, 72562, 72564, 72565, 72567, 72568, 72571, 72572, 72573, 72575, 72576, 72578, 72579, 72581, 72582, 72583, 72584, 72585, 72587, 72589, 72592, 72594
Union County	9.75%	71724, 71726, 71730, 71731, 71742, 71743, 71744, 71745, 71747, 71749, 71750, 71752, 71758, 71759, 71762, 71763, 71765, 71766, 71768, 71770, 71772, 71773, 71775, 71776
Van Buren County	9.625%	72028, 72051, 72060, 72061, 72067, 72088, 72130, 72131, 72132, 72141, 72153, 72189, 72522, 72523, 72528, 72531, 72532, 72534, 72536, 72538, 72539, 72540, 72543, 72544, 72545, 72546, 72550, 72553, 72555, 72557, 72560, 72561, 72562, 72564, 72565, 72567, 72568, 72571, 72572, 72573, 72575, 72576, 72578, 72579, 72581, 72582, 72583, 72584, 72585, 72587, 72589, 72592, 72594
Washington County	10.75%	72701, 72703, 72704, 72717, 72718, 72727, 72729, 72730, 72734, 72735, 72738, 72744, 72745, 72749, 72753, 72761, 72762, 72764, 72765, 72769, 72773, 72774, 72776, 72950
White County	10.25%	72010, 72012, 72013, 72020, 72021, 72023, 72024, 72025, 72027, 72028, 72031, 72036, 72040, 72041, 72044, 72046, 72052, 72060, 72068, 72081, 72082, 72084, 72085, 72101, 72102, 72107, 72120, 72121, 72123, 72126, 72131, 72132, 72137, 72139, 72140, 72143, 72145, 72149, 72153, 72156, 72158, 72165, 72167, 72170, 72172, 72173, 72179, 72181, 72199
Woodruff County	9.5%	72005, 72014, 72021, 72036, 72042, 72052, 72057, 72059, 72061, 72064, 72070, 72074, 72079, 72101, 72108, 72123, 72131, 72140, 72153, 72157, 72160, 72165, 72166, 72169, 72173, 72178, 72183, 72189
Yell County	9.625%	72824, 72828, 72833, 72834, 72837, 72840, 72841, 72842, 72853, 72855, 72863, 72865

Section 4: Registering for Arkansas Sales Tax Permits

This section provides a comprehensive guide to obtaining an Arkansas Sales Tax Permit. It outlines who needs a permit, how to apply (both online and offline), and the necessary information required. You’ll also learn about the permit issuance and application process, the difference between a sales tax ID and permit, and when out-of-state businesses must collect Arkansas sales tax. Importantly, while the permit itself is free, we outlined potential associated costs.

Do You Need to Register for Sales Tax in Arkansas?

If you sell taxable goods or services in Arkansas, you must register for a sales tax permit. This includes both in-state businesses and remote sellers who meet the economic nexus thresholds. 

Specifically, if your sales into Arkansas exceed $100,000 or you conduct 200 or more transactions in a year, you are required to register and collect sales tax. Physical presence, such as owning property or having employees in the state, also necessitates registration​​.

How Much Does It Cost to Get an Arkansas Seller’s Permit?

Obtaining an Arkansas sales tax permit requires a one-time fee of $50. This fee applies to both in-state and remote sellers. It’s important to note that other business registration fees might apply depending on the specific nature of your business​.

How to Register for Sales Tax in Arkansas

Registering for a sales tax permit in Arkansas can be done online or via mail. The process is straightforward and involves the following steps:

1. Online Registration (Recommended):
   • Visit the Arkansas Taxpayer Access Point (ATAP).
   • Click “Sign Up” and follow the prompts to enter your business information, including your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), business identification details, entity type, and the nature of your business.
   • Pay the $50 application fee electronically.
2. Mail-In Registration:
   • Download and complete the Revenue Receipt Tax Application (Form ET-1) from the Arkansas Department of Finance and Administration (DFA) website.
   • Mail the completed form along with the $50 fee to the address provided on the form.

Once issued, the sales tax permit does not require renewal. Ensure you file sales tax returns and remit the collected tax by the due dates, which can be monthly, quarterly, or annually depending on your sales volume.

How to Get a Sales Tax ID in Arkansas

The sales tax ID in Arkansas, also known as the sales tax permit, is issued upon completing the registration process with the Arkansas Department of Finance and Administration (DFA) as discussed above. 

This ID is essential for reporting and remitting sales tax collected from your customers. You must display this ID at your business location and use it on all tax-related documents and correspondence with the Arkansas DFA. Having a sales tax permit ensures that your business complies with state tax laws and regulations.

Does Arkansas Sales Tax Apply to Out-of-State Purchases?

Arkansas requires out-of-state sellers to collect and remit sales tax if they meet the economic nexus thresholds. This means if an out-of-state business makes over $100,000 in sales or has 200 or more transactions in Arkansas in the previous or current calendar year, they must register for a sales tax permit and collect Arkansas sales tax on sales made to Arkansas residents​​.

Section 5: Setting Up Your Online Store, Recordkeeping, and Calculating

In this section, we delve into the intricacies of calculating sales tax, considering both state and local rates. Additionally, we explore the specific sales tax implications for eBay sellers, including how the platform handles tax calculations and collections. To round out the section, we offer guidance on calculating sales tax for car purchases in Arkansas, outlining the relevant tax rates and steps involved.

How Do I Calculate Sales Tax in Arkansas?

Calculating sales tax in Arkansas involves a few key steps, given the combination of state and local tax rates:

1. Determine the State Rate: The base state sales tax rate in Arkansas is 6.5%.
2. Add Local Rates: Local jurisdictions (cities, counties, and special districts) can impose additional sales taxes, which can range from 0% to 5.5%. Therefore, the total sales tax rate in Arkansas can range from 6.5% to 12%.
3. Use an Online Calculator: To accurately calculate the total sales tax for a specific location, you can use online tools like the Arkansas Sales Tax Calculator or AtomicTax Sales tax calculator. These calculators allow you to input the ZIP code or address of the sale location to determine the precise tax rate.

Example Calculation

• If the state rate is 6.5% and the local rate is 2.5%, the total sales tax rate is 9%.
• For a $100 sale, you would calculate the tax as $100 * 9% = $9. 
• Therefore, the total amount charged to the customer would be $100 + $9 = $109.

eBay Sales Tax Arkansas Calculator

For businesses selling on platforms like eBay, it is essential to use a sales tax calculator to determine the correct amount of tax to collect. eBay provides its own tools to help sellers calculate sales tax based on the buyer’s location. Here’s how you can use eBay’s sales tax features:

1. Enable Sales Tax Collection:
   • Go to your eBay account settings.
   • Enable the option to collect sales tax and input the state and local tax rates for Arkansas. eBay will automatically apply the correct rate based on the buyer’s shipping address.
2. Use Third-Party Tools: Platform AtomicTax offers integration with eBay to automate sales tax calculations and filings. These tools use precise geolocation to determine the applicable rates and ensure compliance with state and local tax laws.

By setting up accurate tax collection settings on eBay and using integrated tools, you can ensure that you collect the correct amount of sales tax from your customers in Arkansas, simplifying compliance and recordkeeping.

How to Calculate Sales Tax on a Car in Arkansas

When purchasing a car in Arkansas, the sales tax calculation involves both state and local taxes. Here’s a detailed process:

1. Determine the Taxable Amount:
   • Vehicle Price: Start with the vehicle’s purchase price before any incentives or rebates.
   • Trade-In Value: Subtract the trade-in value if you are trading in a vehicle. Trade-ins are not taxable.
   • Incentives/Rebates: Do not subtract these; sales tax is calculated before applying incentives or rebates.
2. Calculate State Sales Tax:
   • Arkansas has a state sales tax rate of 6.5%.
3. Add Local Sales Tax:
   • Local jurisdictions can add additional taxes, which vary. The combined local tax rate can range from 0% to 5.5%, depending on the county and city.

Example Calculation:

• Purchase Price: $20,000
• Trade-In Value: $5,000
• Taxable Amount: $20,000 – $5,000 = $15,000
• State Sales Tax: $15,000 * 6.5% = $975
• Local Sales Tax: Assume an additional 2% local tax, $15,000 * 2% = $300
• Total Sales Tax: $975 (state) + $300 (local) = $1,275

Therefore, the total sales tax due would be $1,275.

Reverse Sales Tax Calculator in Arkansas

A reverse sales tax calculator is useful when you know the total amount paid, including tax, and want to determine the original price before tax. Here’s how you can do it:

1. Identify Total Paid: The total amount paid, including sales tax.
2. Combine State and Local Tax Rates: Calculate the total sales tax rate by adding the state and applicable local rates.
3. Calculate Original Price: Use the formula:

Original Price = Total Paid /(1+Sales Tax Rate)

Example:

• Total Paid: $21,275
• Sales Tax Rate: 8.5% (6.5% state + 2% local)
• Original Price:

21,275/(1 + 0.085) = 21,275/1.085 = $19,613

The original price before tax would be approximately $19,613.

By understanding these processes and using the available tools, you can accurately calculate and verify sales taxes for car purchases and other taxable transactions in Arkansas.

Section 6: Charging & Collecting Sales Tax

This section outlined the fundamentals of sales tax collection in Arkansas. We covered when and how to charge and collect sales tax, identifying taxable goods and services. We also explained the difference between charging and collecting tax, detailed the specific conditions for taxation, and provided a step-by-step guide to tax calculation, collection, and remittance. Additionally, we addressed common taxability questions regarding labor, shipping, food, services, rental equipment, and delivery charges.

What Does It Mean to Charge Sales Tax vs Collect Sales Tax in Arkansas?

Charging sales tax means a business adds the tax amount to a product or service’s price. It’s calculating and including the tax in the final cost. Collecting sales tax means gathering the charged tax from customers and sending it to the state. It’s transferring the collected funds to the government. Essentially, charging is determining the tax, while collecting is receiving it from the customer and remitting it. Arkansas businesses must both charge and collect sales tax on eligible items.

When to Charge Sales Tax in Arkansas

To determine if you must charge sales tax in Arkansas, you primarily need to consider three factors:

1. Nexus: Do you have a physical presence (like a store) or sufficient economic activity (sales volume or number of transactions) in Arkansas? This establishes your connection to the state.
2. Taxable Items: Are you selling goods or services that are subject to sales tax? Arkansas law outlines specific taxable items.
3. Customer Location: Are you selling to customers within Arkansas? If so, sales tax generally applies.

If you meet these conditions, you’re likely required to collect sales tax. However, keep in mind that local sales taxes may apply, certain items might be exempt, and specific filing and remittance rules exist.

How to Charge and Collect Sales Tax in Arkansas

Charging and collecting sales tax in Arkansas involves several key steps to ensure compliance with state and local regulations:

1. Determine Taxable Sales: Identify which goods and services you sell are subject to sales tax. Most tangible goods are taxable, but some services and items may be exempt. 
2. Charge the Correct Rate: Arkansas has a base state sales tax rate of 6.5%, with local jurisdictions adding additional taxes. Use an online sales tax calculator to determine the exact rate for each sale.
3. Collect Sales Tax: At the point of sale, collect the appropriate amount of sales tax from your customers, either manually or using a point-of-sale system that calculates the tax based on the buyer’s location.
4. Filing and Payment: File your sales tax returns and remit the collected taxes to the Arkansas Department of Finance and Administration (DFA) by the 20th of the month following the reporting period.

Does Arkansas Collect Sales Tax on Out-of-State Sales?

Yes, Arkansas requires out-of-state sellers to collect and remit sales tax if they meet the economic nexus thresholds. This means if your sales into Arkansas exceed $100,000 or if you have 200 or more separate transactions in a year, you must register for a sales tax permit and collect Arkansas sales tax. This applies even if you do not have a physical presence in the state​.

Do Contractors Charge Sales Tax on Labor in Arkansas?

In Arkansas, contractors are generally required to charge sales tax on the labor portion of their work if it involves the installation, repair, or maintenance of tangible personal property. The combined rate includes the state rate of 6.5% plus any applicable local taxes. However, the taxability can vary based on specific circumstances and the nature of the work performed.

Does Arkansas Charge Sales Tax on Shipping?

In Arkansas, shipping charges are generally taxable if the item being shipped is subject to sales tax. This means that if you are selling taxable goods, the shipping fees you charge to deliver those goods are also subject to sales tax. 

However, there are exceptions. If the shipping is billed separately by a third-party carrier and the charges are not included in the taxable sale, then the shipping charges may not be taxable. Additionally, if the items being shipped are non-taxable, the shipping charges for those items are also non-taxable​.

Does Arkansas Charge Sales Tax on Services?

Arkansas does impose sales tax on certain services. While many services are exempt from sales tax, specific services are taxable. These taxable services include, but are not limited to:

• Utilities such as gas, electricity, and water.
• Lodging services for transient guests.
• Installation, alteration, cleaning, and repair services for tangible personal property.
• Cable and satellite television services.
• Cleaning and janitorial services.
• Lawn care and landscaping services.
• Parking services.
• Printing services.
• Admission fees to amusement, entertainment, and recreational events​​.

Does Arkansas Charge Sales Tax on Food?

In Arkansas, the sales tax on food items varies. Generally, groceries are taxed at a reduced rate. The state sales tax rate for groceries is 0.125%, which is significantly lower than the general state sales tax rate of 6.5%. 

However, prepared food, such as food sold in restaurants, is taxed at the full state and local sales tax rates. This means that while your grocery bill might have a minimal tax, dining out or purchasing prepared meals will incur the full sales tax applicable in your location​​.

Do Photographers Charge Sales Tax in Arkansas?

Photographers in Arkansas are required to charge sales tax on their services. This includes charges for taking photographs, developing photographs, and any tangible products such as prints, albums, or digital files delivered on physical media. 

The tax applies to the total amount charged to the customer, including sitting fees and any other related charges. The base state sales tax rate is 6.5%, and local jurisdictions may impose additional taxes, bringing the total rate higher depending on the location of the service .

Does Amazon Charge Sales Tax in Arkansas?

Amazon charges sales tax on purchases made by Arkansas residents. This includes items sold directly by Amazon as well as those sold by third-party sellers through Amazon’s marketplace. The tax rate applied to these purchases is based on the combined state and local sales tax rates.

Does eBay Charge Sales Tax in Arkansas?

eBay charges sales tax on purchases made by Arkansas residents. Due to the marketplace facilitator laws, eBay is required to collect and remit sales tax on behalf of sellers for orders shipped to buyers in Arkansas. This requirement stems from the Supreme Court’s Wayfair decision, which allows states to mandate that online marketplaces like eBay collect sales tax even if the seller does not have a physical presence in the state.

As of now, eBay collects and remits sales tax in 46 states, including Arkansas. The applicable tax rate includes the state sales tax of 6.5% plus any local taxes, which can bring the total rate up to 12.625% depending on the buyer’s location. Sellers do not need to take any additional action for sales tax collection in these states as eBay handles it automatically​​.

Does Wayfair Charge Sales Tax in Arkansas?

Yes, Wayfair also charges sales tax on purchases made by Arkansas residents. Similar to eBay, Wayfair is considered a marketplace facilitator under Arkansas law. This means Wayfair is responsible for collecting and remitting sales tax on behalf of sellers for goods shipped to Arkansas. 

The requirement to collect sales tax applies if the seller exceeds the economic nexus thresholds of $100,000 in sales or 200 transactions annually within Arkansas.

Wayfair’s collection process ensures that the correct state and local sales taxes are applied based on the buyer’s shipping address, following the same guidelines that apply to eBay and other online marketplaces​.

Do You Charge Sales Tax on Rental Equipment in Arkansas?

Yes, Arkansas charges sales tax on the rental or lease of tangible personal property, including equipment. The state considers these rentals taxable transactions, similar to the sale of tangible goods. The tax applies regardless of whether the lessor paid sales or use tax at the time of the original purchase of the property. 

This means that if you rent out equipment, you must collect and remit sales tax based on the rental charges. The base state sales tax rate is 6.5%, and local jurisdictions may add additional taxes, making the total rate vary depending on the location​.

Can You Charge Sales Tax on Delivery in Arkansas?

In Arkansas, sales tax on delivery charges depends on the nature of the items being shipped and how the delivery charges are billed. Generally, if the items being shipped are taxable, then the delivery charges are also subject to sales tax. This applies whether the delivery charges are separately stated or included in the sale price. 

However, if the items being shipped are non-taxable, the delivery charges are not subject to sales tax. Additionally, if delivery charges are billed directly to the purchaser by a third-party carrier and not included in the taxable sale, they are typically not subject to sales tax​.

Do Restaurants Charge Sales Tax in Arkansas?

Yes, restaurants in Arkansas are required to charge sales tax on the sale of prepared food and beverages. The state sales tax rate is 6.5%, but local jurisdictions can add additional taxes, which can vary depending on the location. This means the total sales tax rate charged by a restaurant can be higher, incorporating both state and local tax rates.

The tax applies to all sales of prepared meals, drinks, and any other food items sold by restaurants. Additionally, if a restaurant provides catering services, these services are also subject to the applicable sales tax rates​​.

Section 7: Reporting, Paying, Filing & Remitting Sales Tax Returns

This section we clarified the key differences between reporting, paying, filing, and remitting sales tax. We outlined who is responsible for paying sales tax, the correct payment methods and locations, and the deadlines for filing and remitting tax returns. Additionally, we addressed common sales tax questions, such as whether wholesalers and individuals purchasing homes or leasing cars owe this tax.

What is Sales Tax Reporting vs Payment vs Filing vs Remittance?

Sales Tax Reporting: This is the process of documenting the sales tax collected from customers and preparing this information for submission to the Arkansas Department of Finance and Administration (DFA). Reporting involves calculating the total sales tax collected during the reporting period.

Sales Tax Payment: This refers to the actual transfer of the collected sales tax funds to the state. Payment is usually done electronically and involves moving the money collected from sales tax from your business account to the state’s account.

Sales Tax Filing: Filing is the act of submitting the sales tax return, which includes detailed information about the sales tax collected. This can be done online through the Arkansas Taxpayer Access Point (ATAP). The filing includes reporting the total sales and the amount of sales tax collected.

Sales Tax Remittance: Remittance is another term for the payment process. It involves sending the collected sales tax to the state after filing the return. Remittance ensures the state receives the funds collected from customers.

Who Pays Sales Tax in Arkansas?

In Arkansas, the responsibility to collect and remit sales tax falls on the seller. If you sell taxable goods or services, you are required to charge sales tax to your customers and then remit that tax to the DFA. 

This applies to both in-state sellers and remote sellers who meet the economic nexus thresholds (over $100,000 in sales or 200 transactions in the state)​​.

When to Pay Sales Tax in Arkansas

The frequency of sales tax payments in Arkansas depends on the volume of sales your business generates. Typically, businesses must file and remit sales tax monthly, quarterly, or annually. The due date for monthly filers is the 20th of the month following the reporting period. For example, sales tax collected in October is due by November 20th. 

Quarterly and annual filers have different schedules, which are also based on the 20th of the month following the end of the reporting period​​.

Where Do I Pay Arkansas Sales Tax?

In Arkansas, you pay sales tax to the Arkansas Department of Finance and Administration (DFA). The payment process can be handled online via the Arkansas Taxpayer Access Point (ATAP). 

ATAP is a comprehensive online platform that allows you to file sales tax returns, view tax account information, and make electronic payments. For those who prefer or require it, payments can also be made via ACH credit through your financial institution, provided the payment meets the required format and conditions set by the DFA.

How to Pay Sales Tax in Arkansas

To pay sales tax in Arkansas, follow these steps:

1. Register for an Account: If you don’t already have an account, register on the Arkansas Taxpayer Access Point (ATAP).
2. Log In to ATAP: Use your credentials to log in.
3. File Your Return: Complete your sales tax return online by entering the necessary details about your sales and the taxes collected.
4. Make a Payment: Choose your preferred payment method:
   • Electronic Payment via ATAP: Pay directly through the ATAP system using an electronic funds transfer.
   • ACH Credit Payment: Arrange an ACH credit payment through your bank. Ensure that the payment is formatted correctly as specified by the DFA.
5. Submit Your Return and Payment: After filing your return, submit the payment to the DFA.

How to File Sales and Use Tax in Arkansas

Sales Tax: Sales tax in Arkansas is a tax on the gross receipts from the sale of tangible personal property and certain services. The state sales tax rate is 6.5%, but local jurisdictions may impose additional taxes, making the combined rate vary across the state.

Use Tax: Use tax applies to purchases made outside of Arkansas for use within the state when sales tax has not been paid. This ensures that Arkansas collects tax revenue on out-of-state purchases.

Steps to File Arkansas Sales and Use Tax

1. Log in to ATAP: Access the ATAP system using your account credentials.
2. Prepare the Return: Use the system to enter the total sales, deductions, and the amount of tax collected.
3. Submit the Return: Review and submit the return electronically.
4. Make Payment: Payments can be made via electronic funds transfer (EFT) through ATAP.

Businesses must ensure compliance with all tax collection and remittance obligations to avoid penalties and interest. 

What is the Deadline to Pay Sales Taxes in Arkansas?

Sales tax returns and payments are due by the 20th of the month following the reporting period. For example, if you are filing for sales made in January, the return and payment are due by February 20th. It’s important to adhere to these deadlines to avoid penalties and interest charges. Specific due dates include:

• Monthly Filers: Due by the 20th of the following month.
• Quarterly Filers: Due by the 20th of the month following the end of the quarter.
• Annual Filers: Due by January 20th of the following year.

Keep track of these dates to ensure timely compliance with Arkansas sales tax laws​.

Do Nonprofits Pay Sales Tax on Purchases in Arkansas?

In Arkansas, nonprofits are not automatically exempt from paying sales tax on purchases. Nonprofits must apply for a sales tax exemption certificate from the DFA to benefit from sales tax exemptions. 

This certificate must be presented at the time of purchase to avoid being charged sales tax. Without this exemption certificate, nonprofits are required to pay sales tax on their purchases like any other customer​​.

Do Wholesalers Pay Sales Tax in Arkansas?

In Arkansas, wholesalers generally do not have to charge or pay sales tax on items sold for resale. When you sell products wholesale to retailers, these transactions are exempt from sales tax because the tax is collected at the retail level when the goods are sold to the end consumer. 

However, wholesalers need to obtain a resale certificate from the retailer to validate the tax-exempt status of these transactions. This resale certificate confirms that the retailer is registered to collect sales tax on the final sale to the consumer​​.

Do You Pay Sales Tax on a Leased Car in Arkansas?

In Arkansas, you are required to pay sales tax on leased vehicles. The sales tax is calculated based on the total lease payments rather than the vehicle’s full purchase price. For example, if your monthly lease payment is $500 and the state sales tax rate is 6.5%, you will pay an additional $32.50 in sales tax each month, making your total monthly payment $532.50​.

Additionally, any upfront costs associated with the lease, such as down payments or security deposits, are also subject to sales tax. This can increase your initial out-of-pocket expenses when starting a lease​. Arkansas’s sales tax rate is 6.5%, but local taxes may apply, potentially raising the overall rate​.

Do You Pay Sales Tax When You Buy a House in Arkansas?

No, you do not pay sales tax when you buy a house in Arkansas. Real estate transactions are exempt from sales tax. Sales tax is applicable to tangible personal property and certain services, but not to real estate purchases​. However, other fees and taxes, such as property taxes, may apply when you purchase a home.

Section 8: Sales Tax Holidays and Refunds

This section provides information on Arkansas’ sales tax refunds and holidays. We cover who is eligible for sales tax refunds, including whether foreigners can claim them, and explain the refund process. Additionally, we explore Arkansas’ annual sales tax holiday, detailing the purpose of this event and the specific items typically exempt from tax during this time.

Does Arkansas Do Sales Tax Refunds?

Yes, Arkansas offers sales tax refunds in specific circumstances. A sales tax refund in Arkansas allows businesses, governmental agencies, schools, colleges, universities, churches, and non-profit organizations to claim rebates on eligible business purchases, including local taxes paid on purchase invoices exceeding $2,500. 

This rebate is not claimed from the seller but directly through the Arkansas Department of Finance and Administration (DFA). For businesses that do not file monthly sales tax reports, claims must be submitted directly to the DFA using the appropriate forms and supporting documentation​​.

Does Arkansas Refund Sales Tax to Foreigners?

Arkansas does not have a program in place to refund sales tax to foreign visitors. Unlike some other states, Arkansas does not provide a mechanism for international tourists to reclaim sales tax paid on purchases made within the state. The collected sales tax remains with the state to support local and state government services​​.

Is it Illegal Not to Refund Sales Tax in Arkansas?

In Arkansas, failing to refund sales tax that was erroneously collected is illegal. Businesses must comply with the Arkansas Tax Procedure Act, which entitles taxpayers to refunds for taxes paid in excess of what is lawfully due. If you believe you have overpaid sales tax, you are entitled to a refund by submitting a claim to the Arkansas Department of Finance and Administration (DFA)​.

How to Claim a Sales Tax Refund in Arkansas

To claim a sales tax refund in Arkansas, you need to file a claim with the DFA. The process involves:

1. Determining Eligibility: Ensure you have paid sales tax in excess of the amount lawfully due.
2. Filing the Claim: Submit the appropriate forms, such as Form ET-179A for local tax rebates, along with supporting documentation directly to the DFA.
3. Timeframe: For purchases made before October 1, 2015, claims must be filed within six months of the purchase date. For purchases made after October 1, 2015, claims must be submitted within one year of the purchase date​​.

Does Arkansas Give Sales Tax Holidays?

Yes, Arkansas offers sales tax holidays. A sales tax holiday is a designated period during which specific items are exempt from state and local sales taxes. Arkansas typically holds a “Back to School” sales tax holiday in August. 

During this period, you can purchase items like clothing and school supplies tax-free, provided they meet the state’s guidelines (e.g., clothing items under $100 and school supplies under a specified amount)​.

Section 9: Sales Tax Audits and Penalties in Arkansas

This section outlines the potential consequences of delaying sales tax payments and the sales tax audit process. We explore topics such as penalties for late payments, factors that trigger audits, and the possibility of obtaining a penalty waiver. By the end of this section, you will understand the risks associated with sales tax noncompliance and steps you can take to protect your business.

What is the Penalty for Paying Sales Tax Late in Arkansas?

If you pay sales tax late in Arkansas, you will incur penalties and interest charges. The late payment penalty is 5% of the unpaid tax per month or part of a month, with a maximum penalty of 35%. Additionally, interest is charged at a rate of 10% per year on the unpaid tax amount​.

Does Arkansas Conduct Sales Tax Audits?

Yes, Arkansas conducts sales tax audits. The Arkansas Department of Finance and Administration (DFA) regularly audits businesses to ensure compliance with state sales and use tax laws. These audits are part of the DFA’s efforts to enforce tax laws and ensure that all businesses correctly collect and remit sales taxes​ ​.

What Triggers a Sales Tax Audit in Arkansas?

Several factors can trigger a sales tax audit in Arkansas. Common triggers include:

• Significant Discrepancies: Large discrepancies between reported sales and actual sales, as identified through data analysis or third-party reports.
• High Sales Volume: Businesses with high sales volumes or those with significant sales tax liabilities may be more likely to be audited.
• Nexus: Out-of-state sellers who establish nexus in Arkansas through economic or physical presence may be audited to ensure compliance.
• Past Non-Compliance: Businesses with a history of non-compliance or late filings may be more frequently audited.
• Random Selection: Some audits are conducted randomly to ensure broad compliance across all businesses​.

What is the Penalty for an Audit After the Due Date in Arkansas?

If you fail to pay sales tax by the due date in Arkansas, you will incur penalties and interest. Specifically, the late payment penalty is 5% of the unpaid tax per month or part of a month, up to a maximum of 35%. 

Additionally, interest is charged at a rate of 10% per year on the unpaid tax amount. This means that delays in payment can quickly become costly, adding significant financial burden to the original tax liability​.

What is Arkansas Sales Tax Penalty Waiver?

Arkansas provides an option to request a waiver of penalties for sales tax under certain conditions. If you believe you have a valid reason for failing to pay or file on time, you can apply for a penalty waiver with the Arkansas Department of Finance and Administration (DFA). 

To request a waiver, you must provide a detailed explanation and any supporting documentation that justifies your situation. The DFA will review your request and determine whether to grant the waiver based on your compliance history and the reasons provided. It’s important to note that interest charges typically cannot be waived​​.

Section 10: Arkansas Sales Tax Software- AtomicTax

Managing sales tax can be a complex and time-consuming process, especially with varying rates and regulations across different jurisdictions. AtomicTax Sales Tax Software offers a robust solution designed to simplify and streamline your sales tax management, particularly for businesses operating in Arkansas.

Why Use AtomicTax Sales Tax Software?

1. Automated Compliance: AtomicTax ensures you stay compliant with Arkansas’s sales tax laws by automatically calculating and applying the correct sales tax rates. This reduces the risk of errors and penalties.
2. Real-Time Updates: The software is regularly updated to reflect the latest tax rate changes and regulations. This ensures that your business is always applying the most current tax rules, saving you time on manual updates and research.
3. Detailed Reporting: Generate comprehensive reports that provide insights into your sales tax collection and remittance. These reports can help you prepare for audits and make informed business decisions.
4. Easy Integration: AtomicTax seamlessly integrates with various eCommerce platforms, making it easy to incorporate into your existing sales processes. This integration ensures that sales tax is calculated correctly at the point of sale, providing a smoother customer experience.
5. User-Friendly Interface: The intuitive design of AtomicTax allows you to manage your sales tax effortlessly, even if you don’t have extensive accounting knowledge. The dashboard is easy to navigate, providing quick access to essential features and information.

Don’t let sales tax compliance slow down your business. Simplify your sales tax management with AtomicTax Sales Tax Software and ensure you remain compliant with Arkansas’s tax regulations.

Conclusion

One often overlooked aspect of Arkansas sales tax is the dynamic nature of its local tax rates. Unlike many states, Arkansas allows for significant variation in tax rates across its numerous jurisdictions, making it essential for businesses to stay updated on local tax changes. This variability can impact pricing, profitability, and compliance efforts, underscoring the need for meticulous tax management.

Staying informed about Arkansas sales tax empowers you to make more strategic decisions, ultimately fostering a more resilient and adaptable business model in a competitive market.