Research Areas
Arkansas
The Facts on Arkansas' Tax Climate
Here are some basic facts on Arkansas' tax system and how it compares to other states:
Tax Freedom Day Arrives on April 4 in Arkansas
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Arkansas taxpayers had to work until April 4 to pay their total tax bill (ranked 37th nationally), nine days before national Tax Freedom Day (April 13). The Tax Freedom Days of neighboring states were: Texas, April 6 (ranked 32nd nationally); Oklahoma, April 4 (ranked 40th nationally); Missouri, April 6 (ranked 34th nationally); Tennessee, April 5 (ranked 36th nationally); Mississippi, March 28 (ranked 48th nationally); and Louisiana, March 28 (ranked 49th nationally).
Full study of Tax Freedom Day, nationwide and in each state
Arkansas' State/Local Tax Burden Above National Average
Estimated now at 10.0% of income, Arkansas' state/local tax burden percentage stands at 14th nationally, above the national average of 9.7%. Arkansas taxpayers pay $3,351 per capita in state and local taxes.
Arkansas' State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008
Arkansas' 2009 Business Tax Climate Ranks 35th
Arkansas ranks 35th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. The ranks of neighboring states were as follows: Texas (7th), Oklahoma (18th), Missouri (16th), Tennessee (17th), Mississippi (19th) and Louisiana (33rd).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)
Arkansas' Individual Income Tax System
Arkansas' individual income tax system consists of six separate brackets with a top rate of 7% kicking in at an income level of $31,000. That top rate ranks 13th highest among states levying an individual income tax. In 2006 individual income tax collections were $721 per person, which ranked 31st highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Arkansas' Corporate Income Tax System
Arkansas' corporate tax structure consists of six separate brackets with a top rate of 6.5% kicking in at an income level of $100,000. Among states levying corporate income taxes, Arkansas' top rate ranks 30th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) reached $129 per capita, which ranked 33rd highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Arkansas Levies Sales Tax above National Median
Arkansas levies a 6% general sales or use tax on consumers, above the national median of 5.5%.In 2006, combined state and local general sales tax collections were $1,289 per person, which ranked 7th highest nationally. Arkansas' gasoline tax stands at 21.8 cents per gallon (33rd highest nationally), while its cigarette tax stands at 59¢ per pack of twenty (ranked 37th nationally). The sales tax was adopted in 1935, the gasoline tax in 1921 and the cigarette tax in 1929.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita
Arkansas's Property Taxes
Local governments in Arkansas collected $846.45 per capita during fiscal year 2006, the latest year for which the Census Bureau has released state-by-state data. Arkansas collected $65.27 per capita in statewide property taxes, which beings the state's combined state and local property tax collection figure to $911.73 per capita, ranked 35th nationally.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Arkansas is a Beneficiary State
Arkansas taxpayers receive more in federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Arkansas citizens received approximately $1.41 in the way of federal spending. This ranks the state 14th highest nationally and represents a rise from 1995 when Arkansas received $1.22 per dollar of taxes in federal spending (then ranked 16th nationally). Neighboring states and the amount of federal spending they received per dollar of federal taxes paid were: Texas ($0.94), Oklahoma ($1.36), Missouri ($1.32), Tennessee ($1.27), Mississippi ($2.02) and Louisiana ($1.78).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
