Arkansas Sales Tax: Requirements, Due Dates, and Payment Options

Businesses that sell taxable goods or services in Arkansas must register for a sales tax permit. Then, they must collect sales tax from their customers, file returns with the Department of Finance and Administration (DFA), and remit the collected sales tax to the state. Failure to do so can subject you to penalties and collection actions. 

Here's an overview of the basics. Or to get help now, use TaxCure to find a tax pro who has experience dealing with the Arkansas DFA and business taxes.

How to register for a sales tax account

You can register for an account online through the Arkansas Taxpayer Access Point (ATAP). You can also file returns and make payments through this portal. If you prefer to mail in paper forms, call the DFA at 501-682-7104 and request Form ET-1. 

Due dates for sales tax returns

Most businesses must file and pay monthly – returns and payments are due on the 20th for sales made the previous month or the next business day if the 20th falls on a holiday or a weekend. You can pay online, with an ACH transfer from your bank, or through the mail.

Businesses with over $20,000 in monthly sales tax liability must pay electronically. They also must make prepayments of 80% of their sales tax liability every month. The first prepayment is generally due between the 12th and 14th of the month, and the second payment is due around the 24th or 25th of the month. Check the DFA website for the current year's due dates.

What is the sales tax rate in Arkansas?

The state sales tax rate in Arkansas is 6.5%. Then, local tax gets added on top. For example, Little Rock has a local rate of 1.125%, while Pulaski County has a rate of 1.000% – that leads to a total effective rate of 8.625%. 

The DFA maintains a list of current sales tax rates in every town and county in the state of Arkansas. Check the list to find the current rate in your area – additionally, most point-of-sale software automatically calculates the current rate in your area, and there are similar tools to help remote sellers as well. The DFA sends an updated list of local sales tax rates to businesses with an Arkansas sales tax permit on a regular basis. 

Special sales tax rates in Arkansas

The state has special sales tax rates for the following:

• Reduced food tax - 0.125%
• Electricity manufacturing tax - 1.625%
• Manufacturing utility tax - 0.625%
• Aviation - 6.500%
• Mixed drink tax – 10.000%
• Additional mixed drink tax - 4.000%
• Liquor excise tax - 3.000%
• Parks and tourism tax – 2.000%
• Short-term rental tax – 1.000%
• Residential moving tax – 4.500%
• Wholesale vending tax – 7.000%
• Short-term rental vehicle tax – 10.000%
• Beer excise tax – 1.000%

Local rates generally apply on top of these special state rates. 

Penalties for late sales tax payments

If you pay late, the DFA will apply a penalty of 1% of the unpaid tax for every month you are late, up to a maximum of 35%. For example, if you pay a day late and you owe $5,000, the penalty is $50. The penalty for filing late is 5% of the balance due per month, up to 35%. On a $5,000 tax liability, that works out to $250. 

The total penalty cannot exceed 35%. For example, if you owe $10,000 and you pay and file late, the penalty will not be higher than $3500.

The DFA also backdates interest to the due date, at a rate of 10% per year. The interest also accrues on the penalties. 

Consequences of unpaid state sales tax

In addition to penalties, you may face the following consequences if you don't pay your sales tax:

• Tax lien – issued against your business assets.
• Business closure – the DFA has the right to close down your business for unpaid sales tax.
• Personal assessment - because sales taxes are trust fund taxes, the DFA may be able to pierce the corporate veil and assess the taxes against you as an individual.
• Wage garnishment - the state may garnish your wages if the sales tax is assessed against you individually. Even without an individual assessment, the state may be able to garnish your business bank accounts.

What if you can't afford to pay your sales tax?

The DFA is fairly unrelenting on sales tax payment obligations, but in some cases, you may be able to set up an installment agreement to make monthly payments on your sales tax. If you don't pay sales tax, the state will eventually threaten to shut down your business, but you may be able to avoid that by setting up a payment plan. 

Can you settle Arkansas sales tax liabilities?

You may qualify for a settlement (offer in compromise) on your sales tax liabilities if your business is no longer operating and you are insolvent. To qualify for an offer, you must submit detailed information about your finances to the DFA.

Sales tax audits in Arkansas

The Arkansas DFA has the right to audit any return submitted to the department, including sales tax returns. If you're selected for an audit, the DFA will want to see information to back up the details on your return. In some cases, they may look at samples of data, but in others, they will want to see everything, including point of sale records, bank account statements, accounting reports, and anything else related to your sales. 

Most sales tax audits are field audits, meaning the auditor comes to your place of business. In addition to looking at your business records, they may also want to talk with you about (or observe) your sales practices to ensure that you are accounting for all of your sales correctly.

Voluntary Disclosure Program

If you haven't been paying or collecting sales tax, you may qualify for Arkansas's Voluntary Disclosure Program. The VDP lets you catch up on unfiled returns, and as long as you pay the tax and interest, the state will waive penalties and offer you a limited lookback period. To qualify, you need to reach out to the state about the unfiled taxes before they contact you. The DFA reviews all voluntary disclosure requests on a case-by-case basis.

The lookback period is the shorter of three years or the date you had nexus in Arkansas. However, if you've been collecting sales tax from customers, the lookback period will include all periods you collected but did not pay sales tax. 

Sample Lookback Period for AR Voluntary Disclosures
Scenario	Lookback period
A business established nexus in Arkansas two years ago	2 years
A business established nexus in Arkansas four years ago and was not collecting sales tax from customers during that time	3 years
A business established nexus in Arkansas four years ago and was collecting sales tax from customers during that time	4 years

 

How to apply for the Voluntary Disclosure Program

You can apply online through the DFA's website, or you can download a paper application from the website. This program applies to either sales tax or corporate income tax. 

If the DFA accepts your application, they will have you sign an agreement. Then, you have 60 days to pay the tax liability and to provide a spreadsheet showing how much sales tax you owe. 

What do you need to register for a sales tax account?

To register for a sales tax account, you need:

• Business's EIN or your Social Security Number if registering as a sole proprietorship
• NAICS code for your industry, which you can look up on the NAICS website.
• Business address
• Name, address, and phone number of every owner, partner, or officer
• Bank account details for payments
• Name and account number of the former business, with a Bill of Sale, if you've purchased an existing business
• Alcohol Beverage Control (ABC) permit number, if applicable
• Copy of lease agreement if using a leased space
• Copy of city business license if operating from a private residence

Once your sales tax account is established, you can make changes online. You can also close your account online when you're no longer operating – you need your final tax return, proof of payroll tax payments, and a bill of sale if you're selling your business.

Do remote sellers need a sales tax license in Arkansas?

Yes, as of 2025, remote sellers must collect and remit sales tax in Arkansas if they have more than $100,000 in sales or more than 200 sales in the state. 

What determines nexus for Arkansas sales tax?

You must collect sales tax if you have nexus in the state and sell taxable goods or services. Physical nexus is a presence in the state – for example, a brick-and-mortar store in Arkansas. Economic nexus applies if you have more than $100,000 in sales or over 200 sales to Arkansas shoppers – for example, you have a website and are over the revenue or transaction threshold in Arkansas. 

What is use tax in Arkansas?

Compensating use tax applies in situations where your business buys an item or consumes a service in another state that would have been subject to sales tax in Arkansas. The use tax applies at the rate that the sales tax would ordinarily be for a buyer in that area. 

For example, if you buy something for your business out of state and you pay a lower sales tax rate than applies in your area, you are supposed to pay use tax to make up the difference. Say you pay 4% but the rate in your area is 9%, then you owe 5% use tax on that purchase. 

How do businesses pay use tax?

Businesses should pay use tax when they file their sales tax returns. Note the taxable purchases in column B of your tax return.

How do individuals pay use tax in Arkansas?

If an individual owes more than $100 in use tax, they must file an Individual Consumer Use Tax return for that month. If they owe $25 to $100 per month, they should file a quarterly return. If they owe less than $25 per month, they can file an annual return. 

For example, Matt owes $24 in use tax in February, $20 in April, and $15 in June – he can file an annual use tax return. Now, say Betty owes $120 in use tax in February - she must file a monthly report. 

What if I'm making a sale to an out-of-state customer?

If you're making a sale to an out-of-state customer in-person in your Arkansas location, then assess sales tax at the local rate. If you're shipping taxable goods to an out-of-state customer, you should typically apply sales tax based on the nexus rules and sales tax rates at their location. Arkansas has destination-based sales tax rates. 

For example, let's say you own a brick and mortar shop in Little Rock. A customer from Texas comes into your shop and buys a taxable item. You apply sales tax based on the current rate in Little Rock. 

In contrast, say you run a website selling clothing, and you're based in Little Rock. A customer from Amarillo, Texas, orders some items. You check the sales tax rules in Amarillo and apply them to the purchase. You do not assess Arkansas sales tax on that item.

Get help with Arkansas sales tax

You don't have to deal with state tax problems on your own. Instead, use TaxCure to search for licensed tax professionals who have experience dealing with the AR DFA. Start your search now and then narrow down the results to find a pro with the right experience.