Sales and Use Tax Collection and Remittance in the State of Arkansas
Arkansas calls its tax on entities that do business in the state a Sales and Use Tax (S&U Tax). The S&U Tax applies to vacation rentals. The S&U Tax is assessed by the state and may also apply at the county/city level. Also, a separate specific tax called a Short Term Rental Tax applies to transient rentals. For the purposes of the state of Arkansas, a short term rental is one that is 29 days or less. The local counties and cities also use the same definition.
Arkansas at the state level also assesses a Tourism tax that applies to vacation rentals. Also, through statute, Arkansas has authorized local communities to charge their own tourism tax. The name of this tax is the Advertising & Promotions tax. A few cities have taken the state up on this offer. We will talk about them later.
Statewide Tax Rate
- Arkansas S&U Tax: 6.5%
- Short Term Rental Tax: 1.0%
- State Tourism Tax: 2%
- State Tax Total: 9.5%
Do I Need To Pay?
All rental activity is covered. If you use any online service that charges payments on your behalf you should be good. This includes the S&P tax as well as any local city A&P taxes. The online marketplace service that markets your vacation property typically collects guest payments on your behalf. If they do not collect guest payments and merely provide a guest, then you would likely be responsible for the taxes. Check with the company if you are not sure.
Exempt Rental Activity – Do not submit taxes
AirbnbBooking.comOther booking sites that charge guest on your behalf
What if you obtain rentals on your own and you charge the guest directly? Then you would need to charge the guest the taxes. Also, you would need to register and submit the payments to the state as well as any city/county that requires it. These are the situations where this might occur:
- The guest is a friend.
- A guest rented your property from an ad.
- Some guests rented your property from an online site that charges only subscription fees for your listing.
- Guest rented the property from your own website.
State Registration
Arkansas does not require a specific registration associated with your vacation property. The state registrations is at the taxpayer level either on a business or individual. When you submit your taxes, you would need to enter business codes for each city/county that you rent a vacation property in.
Cities That Require Registration
If you book your rentals using an online marketplace (such as Airbnb), no registration is required at the city level.
When you need to pay rental taxes on your own, you will have to register in some cities. Some of the cities combine the registration/payment into one form. This is documented in the next section.
Also, each of these cities has their own payment methods. The state of Arkansas does not administer the taxes for these cities.
An outlier is the Fayetteville. This city does not charge an A&P tax but has its own Hotel, Motel, and Restaurant Tax. Here as well, the state does not administer this tax either.
Counties That Have Their Own Taxes
The county S&U Taxes are documented at the state website, Arkansas Sales and Use Tax. Select the link for ‘City and County Tax Rates’ to download the documentation for each county.
The county S&U taxes are administered by the state. No additional registration is required.
Cities That Have Their Own Taxes
The following cities each charge their own Advertising and Promotion tax (A&P) for short term rental activity. The one exception is Fayetteville which charges its own Hotel/Motel tax.
If you need to pay any of these city taxes, you need to register and pay to each city directly. The bad news is that some of these cities still don’t have an electronic means of carrying this task out. You would need to pay in person or using snail mail/paper check. The table below has this information detailed.
If the registration is a separate activity from payment, this is noted in the table.
Arkansas City Rental Taxes
| City | Tax | Rate | Register | Pay | Note |
|---|---|---|---|---|---|
| Batesville | A&P | 3% | N/A | N/A | More Information |
| Bella Vista | A&P | 2% | N/A | Pay | No Online Payment |
| Bentonville | A&P | 2% | N/A | Pay | Pay Online |
| Eureka Springs | A&P | 3% | Register | Pay | No Online Payment |
| Fayetteville | Hotel Tax | 2% | Register | Pay | No Online Payment |
| Hot Springs | A&P | 3% | Register | Pay | Pay Online |
| Little Rock | A&P | 4% | Register | Pay | Pay Online |
| North Little Rock | A&P | 3.5% | N/A | Pay | Pay Online |
| Springdale | A&P | 2% | N/A | N/A | More Information |
How Do I Register My Property?
All your rental properties do not require a registration at the state level. There is a special form, called ET-1 that facilities the collection of the state and county, and city S&U taxes. Note that the local city A&P taxes are not administered by the state. See the other city sections of this document for more info on the A&P taxes and how to pay.
Information on the Sales and Use Tax
How Do I Pay?
All S&U taxes for the state, county and city are administered by the state using the following website.
State online website to file payments (ATAP).
The local city A&P tax is paid to each city separately as documented in the city section of this document.
