Arkansas Sales Tax and Invoicing Rules for 2026

TL;DR: Arkansas levies a 6.5% state sales tax with local taxes pushing combined rates up to 11.5% in some areas. Economic nexus begins at $100,000 in sales or 200 transactions. Groceries are taxed at a reduced rate, and Arkansas is a member of the Streamlined Sales Tax Agreement.

Arkansas combines a moderately high state rate with aggressive local taxation that can produce some of the highest combined sales tax rates in the nation. The reduced grocery tax rate adds complexity for retailers selling mixed product categories. This guide covers Arkansas's rates, nexus rules, invoice requirements, exemptions, filing deadlines, and penalties for 2026.

State sales tax rate

Arkansas imposes a 6.5% state sales and use tax on most tangible personal property and certain services. Cities and counties can add local taxes, with combined rates ranging from 6.5% to 11.5% depending on location. Some areas in Arkansas have among the highest combined rates in the nation due to the layering of city, county, and special purpose district taxes. Unprepared food (groceries) is taxed at a reduced state rate of 0.125%, though local taxes still apply on top of that reduced rate.

The wide variation in local rates means sellers delivering goods across Arkansas must verify the correct combined rate for each destination. The Department of Finance and Administration publishes a rate lookup tool for this purpose.

Nexus rules

Physical nexus is established by maintaining a store, warehouse, office, employees, or property in Arkansas. Regularly making deliveries into the state with your own vehicles also triggers nexus. Having independent contractors or agents soliciting orders in the state creates nexus as well.

Economic nexus applies to remote sellers with $100,000 or more in gross revenue or 200 or more transactions in Arkansas during the previous or current calendar year. Either threshold triggers the requirement. Arkansas is a full member of the Streamlined Sales and Use Tax Agreement (SSUTA), simplifying registration and compliance for multi-state sellers. Marketplace facilitators must collect on behalf of their sellers once the facilitator meets the threshold.

What must appear on invoices

The Arkansas Department of Finance and Administration expects invoices to include:

• Seller's name, address, and Arkansas sales tax permit number
• Buyer's name and address
• Date of the transaction
• Description of each item or service sold
• Quantity and unit price
• State and local sales tax shown separately
• Rate applied to each line item (especially when rates differ for groceries vs. general merchandise)
• Total amount due including all taxes
• Exemption certificate number for exempt sales

Given the reduced rate on groceries, sellers of mixed goods should carefully distinguish items taxed at different rates on their invoices. Clear documentation helps both the buyer and the seller during audit reviews.

Exemptions and special cases

Arkansas exempts the following from full sales tax:

• Prescription drugs and certain over-the-counter medications
• Manufacturing machinery and equipment used directly in production
• Sales to federal and state government agencies
• Agricultural supplies including feed, seed, and fertilizer
• Residential utilities (natural gas and electricity) up to certain usage thresholds
• Purchases by qualifying nonprofit organizations
• Motor vehicles (subject to a separate excise tax system)

Groceries are not exempt but are taxed at the reduced state rate of 0.125% plus applicable local taxes, making the total grocery tax typically between 1% and 5% depending on location. Clothing is fully taxable at the standard rate. Arkansas taxes some services including repair, laundry, dry cleaning, and printing. Digital goods including software downloads are taxable. SaaS is generally considered taxable.

Filing frequency and deadlines

Arkansas requires electronic filing through the ATAP (Arkansas Taxpayer Access Point) system. A vendor discount of 2% of tax collected (capped at $1,000 per month) is available for timely filers. Returns must be filed for every period even if no tax was collected. New businesses are generally assigned monthly filing for their first year.

Penalties for non-compliance

Late filing incurs a penalty of 5% per month on unpaid tax, up to a maximum of 35%. A minimum penalty of $5 applies even for small amounts. Interest is assessed at 10% per annum on unpaid balances. Failure to register and collect when required results in assessment of back taxes for the full period of non-compliance. Willful failure to remit collected taxes can result in felony charges, with fines and potential imprisonment.

Frequently asked questions

What is the grocery tax rate in Arkansas? The state rate on unprepared food is reduced to 0.125%. However, local sales taxes still apply at their full rates, so the total tax on groceries depends on your location and can range from about 1% to 5%. This reduced state rate has been in effect since the legislature phased down the grocery tax over several years.

Does Arkansas tax digital products? Yes. Arkansas taxes specified digital products including downloaded software, music, e-books, and streaming services. SaaS is also generally considered taxable. The tax applies when the buyer receives the digital product in Arkansas.

Is Arkansas a Streamlined Sales Tax state? Yes. Arkansas is a full member of the SSUTA, which means remote sellers can register through the Streamlined Sales Tax Registration System for simplified multi-state compliance. The SSUTA also provides standardized product definitions and rate lookup tools.

Are shipping charges taxable in Arkansas? Yes. Arkansas generally considers shipping and delivery charges to be part of the taxable sale when the item being shipped is taxable. Even when shipping is separately stated on the invoice, it remains taxable. This is important for e-commerce sellers to factor into their invoice calculations.