Arkansas increases sales tax rate to help pay for highway improvements
Arkansas increases sales tax rate
Arkansas increases sales tax rate by 0.5%. This moves the state rate up to 6.5% from 6.0% and is the first time Arkansas has changed its sales tax rate since 2004. The increased tax rate went into effect July 1st. The state has begun mailing notices to businesses that have not yet adjusted to the correct rate.
Arkansas voters passed this measure so the state would have more money for highway repairs. 70% of the extra sales tax revenues will go towards building and maintaining 4-lane highways while the rest of the money will go towards local city and county construction projects.
Beyond this tax increase, the Department of Finance and Administration made a couple important sales tax notes for Arkansas residents. First, the state will continue its annual sales tax holiday for back to school purchases. This will be held August 3-4. Second, the state has made three new sales tax exemptions: purchases for nonprofit blood donation charities, repair parts and labor for pollution control machinery, and bailing wrap, twine, and a few other products made by farmers.
Lucinda Rowlands has been the general manager at Zip2Tax since 2010. She has extensively researched sales and use tax regulations in order to help small businesses navigate complicated tax rules.