Arkansas — Sales & Use Tax

Arkansas imposes a statewide sales and use tax rate of 6.5% on the gross receipts or gross proceeds from sales of tangible personal property and certain enumerated services. This rate has been in effect since July 1, 2013. Arkansas refers to this levy as a "gross receipts tax" in its statutes. The tax applies to retailers and other sellers conducting business in Arkansas, who collect it from purchasers and remit it to the Arkansas Department of Finance and Administration. Local jurisdictions may impose additional sales and use taxes on top of the state rate.

Source: Arkansas Department of Finance and Administration – State Sales & Use Tax Rates

Arkansas requires remote sellers and marketplace facilitators to collect and remit sales and use tax if, in the current or previous calendar year, their sales of tangible personal property, taxable services, digital codes, or specified digital products for delivery into Arkansas exceeded $100,000 or 200 transactions. This economic nexus rule took effect July 1, 2019, under Act 822 of the 92nd General Assembly (codified at Ark. Code § 26-52-111). The threshold applies to sellers without physical presence in Arkansas. Both thresholds use an "or" standard—exceeding either triggers collection obligations.

Legislative history and current status

The original 2019 law established both a $100,000 revenue threshold and a 200-transaction threshold, mirroring the South Dakota thresholds upheld in South Dakota v. Wayfair, 138 S. Ct. 2080 (2018). The Arkansas Department of Finance and Administration's official Remote Seller FAQs, as of September 2025, continue to state that remote sellers must collect tax if their sales "exceeded one hundred thousand dollars ($100,000) or two hundred (200) transactions" in the current or previous year.

Practitioner reports of 2023 repeal

Some tax compliance providers and practitioner sources report that Arkansas repealed the 200-transaction threshold effective January 1, 2023, making Arkansas a revenue-only state. As of June 2026, the Department of Finance and Administration's published guidance has not been updated to reflect any such repeal, and a search of Arkansas legislative records for 2023 did not locate an amending act that explicitly repealed the transaction threshold in Ark. Code § 26-52-111(a).

Until the Department of Finance and Administration updates its official guidance or the current statutory text is confirmed through the Arkansas Code, remote sellers should monitor both the $100,000 revenue threshold and the 200-transaction threshold, or seek direct written confirmation from the Department regarding current enforcement policy.

Source: Arkansas Department of Finance and Administration – Remote Sellers FAQs

Arkansas imposes use tax on tangible personal property purchased out-of-state and brought into Arkansas for use, storage, consumption, or distribution when Arkansas sales tax was not collected on the purchase. The tax applies to items that would be taxable if purchased in Arkansas, including purchases from catalogues, TV advertisements, magazines, and the Internet. Taxpayers who legally paid sales tax to another state may receive a credit for that tax against the Arkansas use tax liability; if the amount paid to the other state is less than the Arkansas tax, the taxpayer must pay Arkansas the difference.

Source: Arkansas DFA Consumer Use Tax

Arkansas sales and use tax applies to all sales of tangible personal property unless a specific statutory exemption applies. In contrast, services are taxable only if specifically enumerated by law. This means tangible goods are presumed taxable, while services are presumed not taxable unless the statute lists them. Taxable services include cleaning and janitorial work, installation and repair of specific items, printing, photography, non-residential lawn care, furnishing of lodging to transient guests, admissions to amusement and entertainment events, and certain other services defined in Ark. Code § 26-52-301.

Source: Arkansas Department of Finance and Administration – Sales & Use Tax

Sellers making taxable sales in Arkansas must register with the Department of Finance and Administration. Registration is completed through the Arkansas Taxpayer Access Point (ATAP), the state's web-based tax account system. Arkansas charges a one-time, non-refundable $50 permit fee, paid electronically upon submission. Each physical business location requires a separate permit, and each permit must be displayed at the business location. The location address cannot be a Post Office Box.

Source: Arkansas DFA – Register for a Tax Account

Arkansas sales and use tax returns are due on the 20th day of the month following the close of the reporting period, regardless of filing frequency. The Arkansas Department of Finance and Administration (DFA) assigns each taxpayer's filing frequency—monthly, quarterly, or annual—based on the business's sales tax liability. The DFA generally assigns more frequent filing to businesses with higher tax liability. Once assigned, the filing frequency typically remains constant unless the business's sales volume changes significantly.

Filing frequencies and due dates:

• Monthly filers: Returns and payment for each month are due by the 20th of the following month (e.g., January sales tax is due February 20).
• Quarterly filers: Returns and payment are due April 20, July 20, October 20, and January 20.
• Annual filers: Returns and payment for the entire calendar year are due January 20 of the following year.

If the 20th falls on a weekend or state holiday, the due date shifts to the next business day.

Prepayment requirements: Businesses with substantial sales tax liability must make two monthly prepayments in addition to filing the monthly return. The DFA publishes a calendar of specific prepayment dates (typically around the 12th and 24th of each month) for affected taxpayers. Businesses subject to prepayments will be notified by the DFA; the requirement is based on prior tax liability.

Zero returns: All registered sellers must file a return for each assigned period even if no sales tax was collected during that period. Failure to file a zero return can result in penalties.

Timely filing discount: Arkansas offers a 2% discount on the state sales tax due for timely filing and payment, capped at $1,000 per month. Local jurisdictions may also allow a 2% discount, with a maximum of $1,000 per city and county reported. This discount applies only if the return and payment are both submitted on or before the due date.

Source: Arkansas DFA – Sales & Use Tax Due Dates

Arkansas eliminated its state sales and use tax on food and food ingredients effective January 1, 2026, under the Grocery Tax Relief Act (Act 1008 of 2025, originally House Bill 1685). The state rate on qualifying food is now 0.000%. Local sales and use taxes on food and food ingredients remain in effect and continue to be collected by sellers.

Statutory definition of food and food ingredients

Under Ark. Code § 26-52-103(17)(A), "food" and "food ingredients" mean "substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value."

The statute excludes candy, soft drinks, alcoholic beverages, tobacco, and dietary supplements from the definition of "food and food ingredients." Ark. Code § 26-52-103(17)(B). Those items remain subject to the full 6.5% state sales tax rate plus local taxes.

Prepared food remains taxable at the full rate

The exemption does not apply to "prepared food." Prepared food is taxed at the full 6.5% state rate plus applicable local rates. However, Ark. Code § 26-52-317(a)(2) excludes two categories from the definition of "prepared food":

• Food that is only cut, repackaged, or pasteurized by the seller; and
• Eggs, fish, meat, and poultry, and foods containing these raw animal foods requiring cooking by the consumer to prevent food-borne illnesses as recommended by the United States Food and Drug Administration in its 2005 Food Code, § 3-401.11, as it existed on January 1, 2007.

This distinction is critical for grocery stores and mixed vendors: rotisserie chicken prepared and heated in-store is prepared food (taxable at 6.5% state plus local), while fresh chicken cut and repackaged by the grocer qualifies as food and food ingredients (exempt from state tax, but local tax applies).

Historical rate reductions

Arkansas reduced its food tax incrementally over nearly two decades:

• Prior to 2007, food was taxed at the general sales tax rate (6.0% at that time).
• In 2007, the rate was reduced to 3.0%.
• Further reductions followed in 2009 and 2011.
• Effective January 1, 2019, the rate was reduced to 0.125% when statutory conditions tied to state budget thresholds were satisfied under Ark. Code § 26-52-317(a).
• Effective January 1, 2026, the state rate was eliminated entirely (0.000%).

The 0.125% rate that ended December 31, 2025, was levied under Amendment 75 of the Arkansas Constitution and dedicated to the Arkansas Game and Fish Commission and the Department of Parks, Heritage and Tourism. Act 1008 exempted food and food ingredients from the state gross receipts tax while preserving the constitutional allocation mechanism for other taxable items.

Local taxes on food remain in effect

Act 1008 explicitly provides that sales of food and food ingredients continue to be subject to local sales and use taxes. Ark. Code § 26-52-317(d)(2) states: "The gross receipts or gross proceeds derived from the sale of food and food ingredients shall continue to be subject to... all municipal and county gross receipts taxes." Cities and counties retain authority to tax food. Local rates vary by jurisdiction. Sellers must configure systems to apply a 0.000% state rate and the applicable local rate(s) based on destination or location of sale.

Compliance requirement

Sellers must distinguish food and food ingredients (state-exempt, local-taxable) from prepared food, candy, soft drinks, and other non-qualifying items (state-taxable at 6.5% plus local). Misclassification of items can result in underreported or overreported tax liability and audit exposure.

Source: Arkansas Department of Finance and Administration – State Sales & Use Tax Rates

Source: HB1685 Bill Information – Arkansas State Legislature

Arkansas requires marketplace facilitators to collect and remit sales and use tax on behalf of third-party sellers when the facilitator meets economic nexus thresholds. This obligation, enacted under Act 822 of the 92nd General Assembly and effective July 1, 2019, shifts the collection duty from individual marketplace sellers to the platform itself for sales facilitated through the marketplace.

Economic nexus threshold

A marketplace facilitator must collect and remit Arkansas sales and use tax if, in the current or previous calendar year, the facilitator's sales of tangible personal property, taxable services, digital codes, or specified digital products for delivery into Arkansas exceeded $100,000 or 200 transactions. The Arkansas Department of Finance and Administration states that "all remote sellers and marketplace facilitators are required to collect and remit Sales and Use tax to the State of Arkansas if within the current or previous year the sale of tangible personal property, taxable services, a digital code, or specified digital products for delivery into Arkansas exceeded one hundred thousand dollars ($100,000) or two hundred (200) transactions."

The threshold is applied on an "or" basis—exceeding either the dollar amount or the transaction count triggers the collection obligation. The statute measures sales "for delivery into Arkansas," meaning the destination of the goods or services, not the facilitator's location.

What counts as a marketplace facilitator

The Arkansas Department of Finance and Administration describes a marketplace facilitator as "an out-of-state seller that has no physical presence in Arkansas and within the current or previous year their sale of tangible personal property, taxable services, a digital code, or specified digital products for delivery into Arkansas exceeded one hundred thousand dollars ($100,000) or two hundred (200) transactions." This description focuses on the threshold rather than the operational definition of what activities constitute facilitation. Ark. Code § 26-52-111 establishes the obligations for remote sellers and marketplace facilitators but does not provide a detailed enumeration of the specific platform activities that distinguish a facilitator from a remote seller.

Typical marketplace facilitators include platforms such as Amazon, eBay, Etsy, and Walmart Marketplace—businesses that list third-party sellers' products, facilitate payment processing, and may provide fulfillment or other services.

Collection and remittance duty

Once a marketplace facilitator meets the economic nexus threshold, it must collect and remit the applicable Arkansas sales tax or compensating use tax on all sales it facilitates through the marketplace for delivery into Arkansas. The facilitator is responsible for determining the correct combined state and local tax rate based on the destination of the sale, collecting the tax from the purchaser at the point of sale, and remitting it to the Arkansas Department of Finance and Administration.

Ark. Code § 26-52-111(c) addresses how sales are attributed for threshold purposes: a sale facilitated by a marketplace facilitator is treated as a sale of the marketplace facilitator (not the individual marketplace seller) when determining whether the facilitator has met the $100,000 or 200-transaction threshold. This prevents individual small sellers from triggering nexus obligations on facilitated sales while ensuring the platform itself is responsible for collection once it exceeds the threshold.

Impact on marketplace sellers

When a marketplace facilitator collects and remits tax on a seller's behalf for sales made through the platform, the marketplace seller generally does not have a separate obligation to collect and remit tax on those specific facilitated sales. However, marketplace sellers remain responsible for collecting and remitting tax on any sales made outside the marketplace platform—such as sales through the seller's own website, at trade shows, or from a physical retail location—if the seller independently meets Arkansas nexus requirements.

Marketplace sellers should maintain records that distinguish sales facilitated by a collecting marketplace (where the platform handled tax collection) from direct sales (where the seller must determine its own collection obligation).

Registration and filing

Marketplace facilitators meeting the economic nexus threshold must register with the Arkansas Department of Finance and Administration. Registration is completed through the Arkansas Taxpayer Access Point (ATAP), the state's online tax account system. Arkansas is a full member of the Streamlined Sales Tax Governing Board, and marketplace facilitators may register through the Streamlined Sales Tax Registration System if they need to collect tax in multiple member states.

The Department of Finance and Administration's published guidance on remote sellers and marketplace facilitators does not specify whether the standard $50 one-time permit fee (applicable to in-state sellers under Ark. Code § 26-52-201) applies to marketplace facilitators registering solely under the economic nexus statute. Facilitators should confirm current registration fee requirements with the Department or through the ATAP registration process.

Statutory provisions on liability and audits

Ark. Code § 26-52-111 contains additional provisions governing marketplace facilitator liability and audit procedures, including limitations on when a facilitator may be relieved of liability for incorrect tax collection and restrictions on the Department's authority to audit marketplace sellers for facilitated sales. Practitioners should consult the full text of Ark. Code § 26-52-111(d)–(f) for the detailed liability relief framework, audit scope limitations, and the treatment of related-party transactions between facilitators and sellers.

Source: Arkansas Department of Finance and Administration – Remote Sellers

Arkansas uses destination-based sourcing to determine which local sales and use taxes apply to a transaction. Under this system, a seller generally applies the tax rate based on the location where the purchaser receives the tangible personal property or taxable service, not the location of the seller. This sourcing framework applies to both state and local sales and use taxes administered by the Arkansas Department of Finance and Administration.

General sourcing hierarchy

Arkansas Code § 26-52-521 and implementing regulation 26 CAR § 30-1207 establish a cascading hierarchy of sourcing rules. A sale is sourced in the following order:

1. Receipt at seller's business location. If the purchaser receives the tangible personal property or service at the seller's business location, the sale is sourced to that location. For example, if a customer picks up a repaired motor at a shop in Jacksonville, the seller collects Jacksonville city sales tax, Pulaski County sales tax, and the state sales tax.

1. Delivery to a specified address. When the purchaser does not receive the property or service at the seller's business location, the sale is sourced to the location of receipt by the purchaser (or the purchaser's donee), including the location indicated by delivery instructions known to the seller. For example, if the same Jacksonville repair shop ships the repaired motor by common carrier to Conway, the seller collects Conway city sales tax, Faulkner County sales tax, and the state sales tax.

1. Address from seller's business records. If the first two rules do not apply, the sale is sourced to the address for the purchaser available from the seller's business records maintained in the ordinary course of business, when use of this address does not constitute bad faith.

1. Address obtained during consummation of sale. If the first three rules do not apply, the sale is sourced to the address obtained during consummation of the sale, including the address of the purchaser's payment instrument, if no other address is available and use of this address does not constitute bad faith.

1. Seller's address as fallback. If none of the preceding rules apply, the sale is sourced to the address from which the tangible personal property was shipped or from which the service was provided (ignoring any location that merely provided the digital transfer of the product sold).

When destination sourcing took effect for local taxes

The Arkansas Department of Finance and Administration's official guidance states that "after January 1, 2008, local sales tax collections changed to be based on the 'point of delivery' of the merchandise." If possession of merchandise does not occur at the store location, tax is based on the delivery address to which the merchandise is being delivered, shipped, or mailed. Sellers who only sell merchandise and perform services at their store location and do not deliver or ship any merchandise to customers continue to collect local taxes based on the store location; delivery occurs at the store in those cases.

Taxable services and destination sourcing

Destination sourcing also applies to taxable services. When taxable services are performed in Arkansas and the customer takes receipt of the service in Arkansas, the transaction is subject to Arkansas gross receipts tax at the location of receipt. However, if taxable services are performed in Arkansas but the customer takes receipt of the service outside of Arkansas, no Arkansas gross receipts tax is due. For example, a landscaping company performing services in Monticello collects state sales tax, Monticello sales tax, and Drew County sales tax, because the customer receives the service at the Monticello location.

Motor vehicles, trailers, and semitrailers

Sales of motor vehicles, trailers, and semitrailers that require licensing are sourced differently. When sold to a person who resides in Arkansas, the sale is sourced to the residence of the purchaser as indicated at the time of registration and application for certification of title, not to the location of delivery or the dealer's location. The local sales tax levied by the city and county of the purchaser's residence applies.

Exception: florists

Ark. Code § 26-52-521(i) provides that the destination sourcing rules do not apply to florists. The statute does not specify an alternative sourcing rule for florists.

Compliance and rate determination

Because Arkansas has over 300 local taxing jurisdictions—cities and counties—with combined rates ranging from the 6.5% state-only rate to over 11% in some locations, sellers must determine the correct rate for the specific delivery address. The Arkansas Department of Finance and Administration publishes city and county tax rate listings and mails rate change notices to registered taxpayers on a quarterly basis. Sellers may also access rate information on the DFA's website or use the department's resources to determine whether a delivery address is within an incorporated city (where city tax applies) or in an unincorporated area (where only county and state taxes apply).

Receipts factor sourcing distinguished from sales tax sourcing

Arkansas adopted market-based sourcing for corporate income tax apportionment purposes for sales of services and intangible property under Act 719 of 2025 (S.B. 567), effective for tax years beginning on or after January 1, 2026. That legislation changed receipts factor sourcing rules for income tax purposes; it did not alter the destination-based sales and use tax sourcing framework under Ark. Code § 26-52-521, which remains in effect.

Source: Arkansas Code § 26-52-521 and 26 CAR § 30-1207, as referenced in 26 CAR § 30-1224

Source: 26 CAR § 30-1207 – Determination of tax due — Sourcing transactions

Source: Arkansas DFA – Sales and Use Tax FAQs (Sourcing of Sales When Collecting Local Sales Taxes)

Arkansas taxes services only when specifically enumerated by statute. Unlike tangible personal property, which is presumptively taxable unless exempted, services are presumptively not taxable unless the statute or regulation lists them. The Arkansas Department of Finance and Administration's regulations at 26 CAR § 30-502 and related provisions enumerate and define the specific categories of taxable services under Arkansas law.

Services enumerated in the regulations

Regulation 26 CAR § 30-502 identifies taxable services by reference to Arkansas Code § 26-52-301(3), § 26-52-301(6), § 26-52-301(7), and § 26-52-316. The regulation states that the following services are subject to Arkansas gross receipts tax:

Installation, alteration, cleaning, refinishing, replacement, and repair services. The services enumerated in Arkansas Code § 26-52-301(3)(D), including the service of providing cleaning or janitorial work, are taxable. According to regulation 26 CAR § 30-1003(c)(2)(B), the cleaning of the interior or exterior of any building or structure, including vents, ducts, windows, walls, ceilings, or floors, is a taxable service. The regulation further clarifies at 26 CAR § 30-1003(c)(3)(A) that the initial installation, alteration, addition, cleaning, refinishing, replacement, and repair of motors, electrical appliances, machines, and other mechanical items are taxable. Examples given include initial installation in existing structures and the repair or replacement of dishwashers, stoves, ovens, refrigerators, heating and air conditioning units, garbage disposals, water heaters, ceiling fans, garage door motors, electric signs, washing machines, and dryers.

Additional services listed in the regulation. Regulation 26 CAR § 30-502(b) enumerates additional services subject to gross receipts tax, including:

• Service of providing transportation or delivery of money, property, or valuables by armored car (26 CAR § 30-502(b)(1));
• Furnishing of camping spaces or trailer spaces at public or private campgrounds (26 CAR § 30-502(b)(20));
• Locksmith services, defined at Arkansas Code § 26-52-316 as repairing, servicing, or installing locks and locking devices, whether incorporated into real property, incorporated into tangible personal property, or separate and apart from other property, and including unlocking locks or locking devices for another person. Locksmith services do not include the initial installation of locks by a contractor in new construction (26 CAR § 30-502(b)(21));
• Pet grooming and kennel services (26 CAR § 30-502(b)(22)).

The regulation notes that dues and fees paid to health spas, health clubs, and fitness clubs are subject to gross receipts tax (26 CAR § 30-502(c)).

The regulation also addresses service contracts, maintenance agreements, and extended warranties. These are taxable when they provide in whole or in part for the future performance of or payment for services that are subject to gross receipts tax. The seller of the contract, or the seller's designated agent, collects sales tax on the purchase price of the contract. For example, home warranty contracts are taxable on the purchase price when sold. Labor and tangible personal property provided under the warranty after purchase are not subject to sales tax. If the seller of a taxable contract allows the purchaser to pay for the contract in monthly or other periodic installments, the seller may report and remit sales tax on the periodic payments (26 CAR § 30-502(d)).

The regulation cross-references additional taxable service rules at 26 CAR §§ 30-502 through 30-519, indicating that the enumeration of taxable services in Arkansas is distributed across multiple regulatory sections.

Key exceptions

The regulations identify limited exceptions to taxability for certain enumerated services. Regulation 26 CAR § 30-502 does not provide the full text of the statutory exceptions codified in Arkansas Code § 26-52-301, but refers practitioners to the underlying statute for those provisions. The Arkansas Department of Finance and Administration has published guidance indicating that certain repair and installation services are exempt from gross receipts tax when they meet specific statutory conditions, such as:

• Coin-operated car washes, defined in regulation 26 CAR § 30-1003 as car washes in which the car washing equipment is activated by the insertion of coins into a slot or receptacle and the labor of washing the exterior of the car or motor vehicle is performed solely by the customer or by mechanical equipment.

The regulation at 26 CAR § 30-1003(b)(1) also clarifies that certain services are not taxable: the initial installation, alteration, addition, cleaning (with exceptions noted in the cleaning services subdivision), refinishing, replacement, or repair of nonmechanical, passive, or manually operated components of buildings or other improvements or structures affixed to real estate—including walls, ceilings, doors, locks, windows, glass, heat and air ducts, roofs, wiring, breakers, breaker boxes, electrical switches and receptacles, light fixtures, pipes, plumbing fixtures, fire and security alarms, intercoms, sprinkler systems, parking lots, fences, gates, fireplaces, and similar components that become part of real estate after installation—are not taxable services. This means, generally, that services performed on nonmechanical components or fixtures within or on a building or other improvement to real estate are not taxable.

Services subject to the standard rate

All enumerated taxable services in Arkansas are subject to the 6.5% state gross receipts tax plus applicable local taxes. Arkansas does not impose a reduced rate structure for taxable services. The rate and base rules that apply to tangible personal property sales apply equally to taxable services unless the statute or regulation provides otherwise.

Scope of taxable services compared to tangible personal property

The Arkansas taxable services enumeration is narrow compared to many states. The regulation makes clear that the enumeration is limited: services not specifically listed in the statute or regulation are not subject to Arkansas gross receipts tax. Professional services—such as legal, accounting, consulting, engineering, or architectural services—are not enumerated and therefore are not taxable. Similarly, many information services, software-as-a-service offerings (unless they involve a taxable service such as data processing or telecommunications), and general business consulting are not taxable in Arkansas because the statute does not enumerate them.

Contractor treatment and interaction with taxable services

Regulation 26 CAR § 30-1003 provides detailed guidance on how contractors are treated under Arkansas gross receipts tax law. All contractors are deemed to be consumers or users of all tangible personal property, including materials, supplies, and equipment used or consumed by them in performing any contract. The sales of all such property to contractors are taxable sales. The contractor must pay tax at the time of purchase or pay tax at the time the materials are withdrawn from stock for use in the performance of the contract. However, if the performance of a contract or any portion thereof by a contractor constitutes the performance of a taxable service under the terms of Arkansas Code § 26-52-301(3), then the entire gross proceeds or gross receipts derived from the performance of the taxable services—including the sale or transfer of title or possession of any materials or supplies used or consumed in performing the taxable services—are subject to the tax imposed by the chapter. Contractors are entitled to receive a gross receipts tax credit, tax offset, or refund for any gross receipts tax or use tax paid on materials or supplies used or consumed by them that become a part of real estate in performing taxable services.

The practical effect of this framework is that labor for the installation of nonmechanical building components (such as drywall, roofing, or framing) is not taxable, and the contractor pays tax when purchasing the materials. But labor for the installation of mechanical items (such as HVAC units, appliances, or electrical machines) is taxable as an enumerated service, and the entire charge—including materials and labor—is subject to gross receipts tax.

Source: 26 CAR § 30-502 – Services subject to tax — Taxable services

Source: 26 CAR § 30-1003 – Persons required to collect and remit tax — Specific businesses — Contractors