Avoiding Arkansas sales tax on a new vehicle is generally not possible for residents, as tax is due upon registration, but you can reduce the amount paid. Legitimate methods include using the sales tax credit by selling a personal vehicle within 60 days of purchasing a new one, or applying manufacturer rebates to reduce the taxable purchase price.
To avoid or reduce car sales tax in Arkansas, you can claim a credit for trading in a vehicle, purchase a used car under the current exemption threshold (currently under $10,000 as of early 2024 legislative changes), use specific exemptions for disabled veterans or government/school entities, or buy a vehicle in a state with no sales tax and register it there, though the state's tax on new cars is generally 6.5% plus local taxes.
Arkansas sales tax exemptions cover specific entities (government, nonprofits), items (prescription drugs, certain farm/manufacturing equipment, food), uses (resale), and temporary periods like the annual back-to-school sales tax holiday for clothing and school supplies, claimed using Form ST-391 or specific exemption cards for farmers and disabled veterans, requiring proper documentation for sellers.
Yes, you can reduce taxes on a new vehicle purchase through deductions for sales tax (if itemizing and it exceeds income tax) or a new car loan interest deduction (up to $10k for 2025-2028 vehicles), plus potential clean vehicle tax credits (up to $7,500 for new EVs/FCVs) or business deductions (depreciation, Section 179) if used for work, offering significant savings depending on your situation and vehicle type.
There is a general sales tax deduction available if you itemize your deductions. You will have to choose between taking a deduction for sales tax or for your state and local income tax. You can deduct sales tax on a vehicle purchase, but only the state and local sales tax.
Arkansas's 2025 Sales Tax Holiday was August 2-3, covering clothing/footwear under $100, accessories/equipment under $50, school supplies/art supplies/instructional materials, and student-use electronics, with specific price caps like $1500 for computers/peripherals and $150 for graphing calculators, but excluding items like sewing supplies or protective gear.
Register your vehicle quickly and easily online. If you're new to Arkansas or have recently purchased a vehicle, you must register it within 60 days. This service lets you register your vehicle, apply for a title, transfer your license plate, and pay sales tax online in as little as 15 minutes.
The best way to negotiate a car price involves thorough research (market value, invoice price, incentives), getting pre-approved financing, focusing solely on the "out-the-door" total price (not monthly payments), starting with a low but reasonable offer, using competing offers from other dealers, and timing your visit strategically (end of month/year) to get the best deal. Be prepared to negotiate trade-ins separately and walk away if the deal isn't right.
The Arkansas (AR) state sales tax rate is currently 6.5%.
Often, the focus is on back-to-school items like clothing, shoes, computers, and school supplies. Eligible products often have price caps—for instance, some states limit the price of clothing or footwear to $100 or less. Not all states offer tax holidays.
Tax-free weekend is a period when you can buy items without paying sales tax. It usually happens once a year and includes products like clothing, school supplies, and electronics. This guide explains what to expect, how to prepare, and what to buy to maximize your savings.
Arkansas Sales Tax
The city of Gillham has the highest combined sales tax rate at 12.625%. Arkansas is also one of 13 states that still impose a sales tax on groceries (food), though it is the lowest at . 125%.
Downfalls of living in Arkansas often cited include high sales taxes, limited job opportunities and lower wages, significant health disparities (high rates of obesity, diabetes), challenges in public education and healthcare access, poor infrastructure, high humidity and severe weather risks (tornadoes), and limited entertainment/cultural diversity outside major cities, though affordability and natural beauty are key draws.
Legal sales tax exemptions have been made for a number of cases:
You can get a tax write-off if you purchase a vehicle that has a GVWR over 6,000 pounds for business purposes. Section 179 deductions allow companies to write off up to $31,300 of the purchase price of a qualifying vehicle used for business purposes.