Taxes Levied By Cities & Counties

Property Tax

Arkansas does not have a state-imposed property tax. Property taxes are assessed at the county and municipality levels and are administered by the state.

Business firms as well as individuals are subject to this annual tax on all real and personal property (excluding intangibles) with exchange value. The tax is calculated based on 20 percent of the fair market of real and personal property and the average annual value of merchant's stocks and manufacturer's inventories.

Multiplying the annual tax rate times the level of assessment results in an effective tax rate. The average tax rate in Arkansas is 0.75%, half the U.S. average of 1.5%. In other words, the average annual property tax on $1,000,000.00 worth of property in Arkansas would be $7,500.00, compared to the national average of $15,000.00.

The annual tax rate is the aggregate of all levies for county, municipal, school and other special district purposes within constitutional and statutory limits. School district rates are not limited, but are subject to approval each year by the voters in each school district. Other authorized rates include the following:

Cities

• five mills - general municipal government support - all cities
• five mills - retirement bonds issued for municipal improvements - first and second class cities (First class cities include those with 2,500 or more inhabitants; second class cities, 500 to 2,500 inhabitants)
• five mills - retirement of bonds issued for acquiring, improving, or construction water and light plants - first and second class cities
• five mills - development of industry - first class cities located in counties with no less than 105,000 inhabitants
• two mills - firemen and policemen pension funds (one mill each) - first and second class cities
• one mill - maintenance of public library - first class cities of 5,000 or more population. (Cities levying city library millage are exempt from the millage levied by counties for a county library)

Counties

• five mills - general county government operation
• five mills - retirement of bonds issued for capital improvements
• three mills - construction and maintenance of roads and bridges
• five mills - development of industry (limit of five mills for the city and county combined)
• one mill - maintenance of county library
• one mill - county hospital operation

Junior College Districts

• ten mills - capital outlay

Personal Property Tax

The State of Arkansas levies no ad valorem taxes on real or personal property, having reserved that field of taxation to counties, municipalities and school districts. Property is assessed at 20% of market value.

Additional Information

• Starting A New Business in Arkansas: A Tax Guide For New Businesses
• Moving to Arkansas: A Concise Tax Guide for New Residents