Arkansas Sales Tax Rate | Arkansas Use Tax Rate | TaxConnex

Arkansas is a fairly straightforward state from a sales and use tax perspective. Sales and use taxes apply to the sale of tangible personal property and some enumerated services. Unlike Alaska, Alabama and Arizona, all Arkansas local sales and use taxes are administered by the state. That means, there is a single sales and use tax return filed for all state and local sales and use taxes – rather than having to file a separate return for each local jurisdiction.

Something you should be aware of in Arkansas is the concept of sales and use tax prepayments. Prepayments are not uncommon amongst the states – and although I generally loathe the concept, I can respect the approach implemented by Arkansas - generally, the taxpayer likely has collected the tax prior to making the prepayment.

The prepayment program operates as follows:

All registered retailers in Arkansas having average net sales of more than $200,000 a month for the preceding calendar year must make prepayment of sales tax. These payments must be made by electronic funds transfer.

A taxpayer required to make prepayments of gross receipts tax, or effective January 1, 2012, compensating use tax, may make the payments according to either of the following options:

• The taxpayer may elect to make two tax payments for the current calendar month. Each payment must be equal to 40% of the tax due on the monthly average sales. The payments must be made by the 12th and 24th of each month. The balance for the month must be remitted with the regular report due by the 20th of the following month.

• The taxpayer may elect to pay an amount equal to or exceeding 80% of the tax due for the current month by the 24th of each month. The balance for the month must be remitted with the regular report due by the 20th of the following month.

[Ark. Code Ann. §26-52-512(a); Ark. Code Ann. §26-53-125(a)(5)(A); Ark. Regs. §GR-77(D)(3).]

The combined state and local sales and use tax rate in Arkansas can exceed 11% - which is very high compared to most states. Notwithstanding the average combined sales and use tax rate of 9.25%, Arkansas is relatively taxpayer friendly when it comes to sales and use tax compliance requirements.

Stay tuned for more of Jeff's EYE ON series as he blogs about sales and use tax State by State.