Located in the South of the USA, Arkansas covers almost 140,000 km² and is home to three million people. With Hot Springs National Park, seven protected sites, five National Natural Landmarks and 52 state parks, it's no surprise Arkansas is nicknamed “The Natural State”. If you love the outdoors, the stunning national parks in the USA are an absolute must.
Since 2015, the administration of then-Governor Asa Hutchinson has taken a number of steps to cut the red tape that used to slow down startups, relocations and expansions.
Bentonville is a great example of how Arkansas has changed: once a sleepy little town, it has grown into a hub of commerce and culture. According to the U.S. Census Bureau, it was the fastest-growing city in the USA in 2019.
“The Natural State” offers more than the third-lowest business costs in the country. It also attracts investors with competitive business incentives designed to drive job creation.
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High praise from local business leaders
The trade magazine “Area Development” confirms the state's positive trend: in 2019, it already ranked Arkansas number 14 on its list of “Top States for Doing Business”. According to the Tax Foundation, the dollar has the highest relative value here of any state. In other words, your money goes further in Arkansas than anywhere else in the USA.
Executives of local companies value how easy it is to do business in “The Natural State”. David Peacock, President of Hytrol, points to his company's success story in Arkansas, where it has been based since 1962. It started with 28 employees and now has more than 1,200. Expanding with new production sites went smoothly, and besides being very happy with the local workforce, he especially values the positive business climate.
Jessica Breaux (Manager of Economic Development at Amazon) is full of praise for the local support the company receives. Other major companies such as Walmart and Dillard’s are also based in Arkansas and growing successfully in “The Natural State”. Nestlé, Camfil, Colson Caster and Nice-Pak have recently announced expansions.
A top destination for workers in mid-sized markets
For several years now, big cities have been losing appeal while mid-sized markets have been gaining it. These markets let both individuals and businesses cut costs and still enjoy a higher quality of life.
Arkansas benefits hugely from this trend because it meets what skilled workers are looking for. Little Rock, the state capital, is a case in point: in 2020, home searches there rose by 82 percent compared with 2019, the sixth-highest increase in the USA.
In northeast Arkansas, Jonesboro is seeing rapid growth in skilled jobs. According to the Emsi Talent Attraction Scorecard, Jonesboro ranked in the top 30 % of cities for skilled job growth between 2015 and 2019.
Arkansas is full of opportunities for businesses and professionals who want to settle in a mid-sized market. If you're exploring options to start, relocate or expand your business, Arkansas could be the right choice for you.
Income tax in Arkansas
Arkansas levies an income tax of 0 to 3.9% (top rate since tax year 2024), depending on income. On top of that, federal income taxes apply.
Corporate tax in Arkansas
Arkansas levies a corporate income tax of up to 4.3% (since tax year 2024). On top of that, federal corporate tax applies.
Sales tax in Arkansas
The USA has no European-style VAT. Instead, states, counties and municipalities levy a local sales tax on sales of goods (but not services).
Sales tax rate in Arkansas
The Arkansas state sales tax is 6.5%. Cities and counties add an average of 3%, for a combined average of 9.5%.
Arkansas nexus laws & sales tax
Effective date:
Included transactions:
Aggregate sales of taxable tangible personal property, taxable services, digital codes or specified digital products subject to Arkansas sales or use tax and delivered into the state. Sales made through a registered marketplace are not included.
Treatment of exempt sales:
Exempt sales and exempt services are not included in the threshold
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to sales in the current or previous calendar year
Additional information:
- Registration requirements: Arkansas hasn't specified how quickly a remote seller must register once it crosses the economic nexus threshold. It could be as early as the next transaction.
- Sales and use tax for remote sellers SB576
Arkansas marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
Economic nexus threshold:
At least 200 transactions or more than $100,000 in total sales in Arkansas in the previous or current calendar year. When calculating the threshold:
- Remote sellers should exclude sales made through a marketplace
- Marketplace facilitators should include all sales made through the marketplace
Registration requirements:
- Remote multichannel sellers: once you cross the economic nexus threshold, you must register and collect Arkansas sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: you may not need to register with the state once you cross the economic nexus threshold. Contact the Arkansas Department of Finance and Administration (DFA) for details.
- In-state multichannel sellers: you must register with the Arkansas DFA and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: you will likely need to register. Contact the Arkansas DFA for details.
- Learn more here.
Find more state profiles in our overview of all US states. Which state is right for your company? Our guide Which US state is best for your company? explains. And how to run a US LLC with no US presence completely tax-free is shown by our sister site zerotax.llc.
Our services for Arkansas:
Planning something in Arkansas? We form your US company in one of the six states we serve. You'll find the options and fees under US company formation, and we'll answer your questions in a consultation.