The Arkansas (AR) state sales tax rate is currently 6.5%. Depending on local municipalities, the total tax rate can be as high as 11.25%.

Arkansas General Sales Tax Info

Sales tax is a tax paid to a governing body (state or local) for the sale of certain goods and services. First enacted in the United States in 1921, sales tax dates back to ancient Egyptian times where paintings depict the collection of tax on commodities. Arkansas first adopted a general state sales tax in 1935. Since that time, the rate has risen to 6.5%.

As a business owner selling taxable goods or services, you act as an agent of the state of Arkansas by collecting sales tax from purchasers and passing it along to the Department of Finance. This is an important point worth emphasizing. Any sales tax collected from residents belongs to the Department of Finance. As a business owner, it is your responsibility to manange the sales tax you collect to remain in compliance with state laws and avoid penalties and interest.

Streamlined Sales Tax

At this time, Arkansas is a Streamlined Sales Tax member. If you’ll be collecting sales tax in additional states beyond, take a moment to review registration through SST. Avalara is an SST Certified Service Provider.

State Sourcing

Arkansas is a destination-based state. Destination-based states are those where the transaction location is defined as the customer delivery location rather than the shipping location of the business. As a seller, this means you are responsible for applying the sales tax rate determined by the ship-to address on all taxable sales.

Nexus in Arkansas

Establishing a substantial presence within a state is a concept known as “nexus” and is the deciding factor for whether the state governing body has the legal authority to require your business to collect sales tax. The two main principles most closely linked to nexus and sales tax (especially multistate sales tax) are the Due Process Clause of the 14th Amendment to the U.S. Constitution and the Commerce Clause, Article 1, Section 8 of the U.S. Constitution.

Nexus in Arkansas can be triggered by a number of factors. The most common include having a physical location (office, warehouse, plant, etc.) within the state, having employees within the state, or conducting marketing activities within the state.

More recently, internet commerce has sparked debate over what can trigger nexus and where sales tax should be collected. For example, Fulfillment by Amazon merchants may find their products stored in Amazon warehouses across the country. This presence of physical goods in states triggers nexus and expands the complexity of managing your sales tax compliance.

If you have any questions about whether your business has nexus in Arkansas, we encourage you to reach out to Avalara Professional Services for a complete nexus review.

Registering for an Arkansas Sales & Use Tax Permit

Prior to selling taxable goods or offering taxable services in Arkansas, a business that has established nexus within the state is required to register for an Arkansas Sales & Use Tax Permit.

Register Online

Businesses may register for an Arkansas Sales & Use Tax Permit online by visiting Arkansas Taxpayer Access Point (ATAP) and following the instructions provided. The Arkansas Department of Finance recommends all new businesses register online. It’s fast, free, and more reliable than other options.

Register by Mail

Businesses may register for an Arkansas Sales & Use Tax Permit by downloading, completing, and mailing the Combines Business Tax Registration (Form AR-1R) to the following address: Arkansas Department of Finance and Administration, Combined Business Tax Registration Form, PO Box 8123, Little Rock, AR 72203-8123

If you need assistance with completing the Arkansas registration form, call (501)682-1895.

Register in Person

Business owners may register for a Arkansas Sales & Use Tax Permit in person by visiting a local Arkansas Department of Finance office.

Registration Cost

The cost to register for an Arkansas Sales & Use Tax Permit is $50

Renewal Requirements

Filing Sales Tax in Arkansas

After your business has started collecting Arkansas sales tax, you’ll need to understand the process of filing state tax returns. Filing a sales tax return is the process of reporting the total amount of sales tax collected during a specific period (assigned based on the amount of sales tax you’ve collected in the prior year) to the Arkansas Department of Finance. It is a seperate step from remitting (paying) collected tax to the state governing body.

Filing Online

The Arkansas Department of Finance recommends all taxpayers filing sales tax file online. It’s faster, more reliable, and free.

To file your return online, visit Arkansas Taxpayer Access Point (ATAP) and follow the instructions provided.

NOTE: The Arkansas Department of Finance and Administration does not encourage filing by mail. Paper copies of tax forms are for the user’s personal records only and should not be submitted.

Filing by Mail

The Arkansas Department of Finance no longer supports state sales tax filing by mail.

Zero Tax Filing

All businesses with active Arkansas Sales & Use Tax Permits are required to file on time returns regardless of whether any tax was collected. Failure to do so may result in penalty fees.

Filing Schedule and Due Dates

Based on the total sales tax collected, businesses are assigned a filing frequency. Of course, the government will always accept payments sooner than required so filers may accelerate payments if they choose.

Extended Due Dates should be used in the event of a Assigned Due Date falling on a weekend or federal holiday.

Annual Filing

Tax Period Assigned Due Date Extended Due Date
2015 January 20, 2016 January 20, 2016

Quarterly Filing

Tax Period Assigned Due Date Extended Due Date
Q1 (Jan – Mar) April 20, 2015 April 20, 2015
Q2 (Apr – Jun) July 20, 2015 July 20, 2015
Q3 (Jul – Sep) October 20, 2015 October 20, 2015
Q4 (Oct – Dec) January 20, 2016 January 20, 2016

Monthly Filing

Tax Period Assigned Due Date Extended Due Date
January February 20, 2015 February 20, 2015
February March 20, 2015 March 20, 2015
March April 20, 2015 April 20, 2015
April May 20, 2015 May 20, 2015
May June 20, 2015 June 20, 2015
June July 20, 2015 July 22, 2015
July August 20, 2015 August 20, 2015
August September 20, 2015 September 20, 2015
September October 20, 2015 October 21, 2015
October November 20, 2015 November 20, 2015
November December 20, 2015 December 20, 2015
December January 20, 2016 January 20, 2016

Penalties and Interest

Failure to pay tax by EFT as required will result in a 5% penalty of the amount of taxes due. Failure to prepay your sales or use tax as required will result in a 5% penalty and loss of prompt payment discount, if applicable, for each occurrence. Act 665 requires that prepayments must be paid by electronic fund transfer (EFT). Failure to EFT your prepayments will result in a 5% penalty for each occurrence.

Department of Finance Contact Info

Need help? You can use the any of the following methods to contact the Department of Finance. Wait times for phone calls may be long so plan accordingly.

Mail: Revenue Division, Sales and Use Tax Section, P.O. Box 1272, Little Rock, AR 72203-1272

Local Phone: (501)682-7104