Arkansas Vehicle Sales Tax & Fees [+Calculator]
Michael Collado is a car buying expert and has been a professional automotive writer since 2009. He’s written about dealership sales, vehicle reviews and comparisons, and service and maintenance for over 100 national automotive dealerships. Previously, Collado was a copywriter at the ad agency TBWA/Chiat/Day where he worked on brand campaigns for Nissan, ABC Television, Sony PlayStation, and Energizer. His recognition in the ad industry includes awards from Communication Arts and The Clios.
Collado has a Bachelor’s degree from the University of South Florida, with a major in Psychology and a minor in Marketing.
Are you looking to purchase a vehicle in Arkansas?
Then you will want to be aware of the state’s car sales tax which can impact the purchase price of the vehicle.
As avid car guys, our editors know that many people wonder how they can avoid paying car sales tax and if buying a car out of state is an option.
Our expert editors are going to walk you through what you need to know about Arkansas sales tax when it comes to vehicle sales.
Table of Contents
- How Much Is the Car Sales Tax in Arkansas?
- How to Calculate Sales Tax On A Car In Arkansas
- Arkansas Sales Tax Calculator
- Do I Have to Pay Sales Tax on a Used Car?
- Which County Has the Highest Tax?
- Which County Has the Lowest Tax?
- Car Sales Tax for Trade-Ins in Arkansas
- Car Sales Tax on Private Sales in Arkansas
- Tax on Rebates & Dealer Incentives
- Arkansas DMV & State Fees
- When Sales Tax Is Exempt in Arkansas
- Arkansas EV Rebates & Incentives
- Best Car Deals by Category
- Frequently Asked Questions
- Direct Access to Auto Experts
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How Much Is the Car Sales Tax in Arkansas?
The current sales tax in Arkansas is 6.5%.
It's important to note, this does not include any local or county sales tax, which can go up to 5.5%, for a total sales tax rate of 11.5%. However, the average total tax rate in Arkansas is 8.62%.
How to Calculate Sales Tax On A Car In Arkansas
To calculate the sales tax on your vehicle, find the total sales tax fee for the city. The minimum is 6.5%. Multiply the vehicle price (after trade-in but before incentives) by the sales tax fee.
For example, imagine you are purchasing a vehicle for $20,000 with the state sales tax of 6.5%. The trade-in value of your vehicle is $5,000 and you have a $2,000 incentive. The total taxable amount is $15,000 since trade-ins are not taxable, but incentives/rebates are.
In this example, multiply $15,000 by .065 to get $975, which makes the total purchase price, $13,975 (account for the incentive).
Calculate Car Sales Tax in Arkansas Example:
- Initial Car Price: $20,000
- Sales Tax Rate: 6.5%
- Trade-In Amount: $5,000
- Incentive/Rebate Amount: $2,000
Sales Tax = ($20,000 - $5,000) * .065
Sales Tax = $975
Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.
Arkansas Sales Tax Calculator
Do I Have to Pay Sales Tax on a Used Car?
Yes, the sales tax applicable to used cars varies depending on the sale price of the vehicle. As per a new rule implemented on January 1st, 2022, different tax rates apply to used vehicles at different price points. If a used vehicle is priced between $4,000 and $10,000, a reduced sales tax rate of 3.5% is applicable.
This rate is significantly lower than the standard rate, making vehicles in this price range somewhat more affordable. However, for used vehicles priced above $10,000, the regular sales tax rate of 6.5% applies. This is the standard rate that applies to most taxable goods and services.
Notably, the new rule also provides a significant tax break for used vehicles priced under $4,000, which are entirely exempt from state sales tax. This exemption can make such vehicles a cost-effective option for buyers on a budget.
Keep in mind, these are state-level taxes, and additional local taxes may apply. Moreover, other costs, such as registration fees, may be due at the time of purchase. Therefore, when budgeting for a used car, it's essential to consider not just the sales price and sales tax but also any additional costs that might apply.
Which County Has the Highest Tax?
When you calculate the state and the county tax, the county with the highest sales tax in Arkansas is Lincoln County, with an 11.5% sales tax rate in the city of Gould.
Which County Has the Lowest Tax?
When accounting for both the state and the county tax rate, the county with the lowest tax is Carroll County with a total tax rate of 7%.
Car Sales Tax for Trade-Ins in Arkansas
In Arkansas, sales tax is not applied to the value of a trade-in. In other words, when calculating sales tax, be sure to subtract any trade-in amount from the purchase price before multiplying it by the tax rate.
For example, let’s say that you agree to purchase a new SUV for $52,000 and you trade in your old SUV for $12,000. This would bring the total purchase price of your new SUV to $40,000. At this point, only $40,000 would be taxed.
Car Sales Tax on Private Sales in Arkansas
In Arkansas, you have to pay the same sales tax rate of 6.5% for private sales.
As an example, if you purchase a used car from a private party for $15,000, you will have to pay at least $975 in tax.
Tax on Rebates & Dealer Incentives
The state of Arkansas does tax rebates and dealer incentives. In other words, the taxable amount is before any incentives or rebates are applied.
As an example, if you purchase a car for $25,000 and have a dealer incentive for $3,000, the total taxable amount is still $25,000.
Arkansas DMV & State Fees
Arkansas charges the following DMV and state fees:
Vehicle Registration
- Cars 3,000 Pounds or Less: $17.00
- Cars 3,001 to 4,500 Pounds: $25.00
- Cars 4,501 Pounds and Over: $30.00
Other Fees
- Title Fee: $10.00
- Tag Transfer Fee: $1.00
- Lien Filing Fee: $.50
- Doc Fees: ~$110 ($129 State Limit)
Arkansas Dealership Fees
Arkansas dealerships charge for the following fees:
- Doc Fees: ~$110 ($129 State Limit)
- Advertising Fees: ~$400 (Varies)
- Transport Fee: $600-$1,500
When Sales Tax Is Exempt in Arkansas
You can avoid paying sales tax on vehicle transactions in Arkansas if you purchase a used car for less than $4,000.
Also, there are vehicle exemptions for non-profit charities, religious organizations, and gifted vehicles.
Arkansas EV Rebates & Incentives
In addition to the federal tax incentive, Arkansas may have some EV incentives.
It's worth noting that there is an additional annual registration fee for hybrid and electric vehicles:
- All-Electric Annual Fee: $200
- Plug-in Hybrid Annual Fee: $100
- Hybrid Annual Fee: $50
Tax information and rates are subject to change, please be sure to verify with your local DMV.
