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Area Development - Site Selection, Facility Planning and Workforce Development

Arkansas Basic Business Taxes 2011

Arkansas's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include no property tax, sales tax of 6 percent, and tax rebates.

March 2011
Corporate income tax:
Corporations and public utilities are taxed at a rate from 1-6.5 percent as net taxable income increases.

Sales and use taxes:
The state sales tax rate in Arkansas is 6 percent. The tax is imposed on the sale of tangible personal property and taxable services.

Local sales and use taxes:
In addition to the state sales and use tax, local sales and use taxes may be levied by each city or county. Qualifying businesses may be eligible for a rebate or refund of the additional local tax paid on qualifying business purchases on purchase invoices that exceed $2,500. A qualifying business purchase means a purchase of tangible personal property or a taxable service for which a business may claim a business expense deduction or depreciation deduction for federal income tax purposes. Questions regarding local tax rates, or the local tax rebates in general may be addressed to the Arkansas Department of Finance and Administration - Sales and Use Tax Section at (501) 682-7105.

Property tax:
The state imposes no property tax; however, cities, counties and special taxing districts do.

Real and personal property financed by industrial revenue bonds and general obligation bonds is exempt from property taxes during the lease-amortization period in which a local government retains title to the property. Payments by industrial concerns to local governments in lieu of property taxes are generally encouraged and negotiated between the parties involved. Negotiations for payments in lieu of taxes must be based on at least 35 percent of the assessed value.

Arkansas State Contact:
Arkansas Economic Development Commission
One Capitol Mall
Little Rock, AR 72201
(501) 682-1121

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.

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