Arkansas Car Sales Tax: Know How Much to Pay!

Planning to buy a car in Arkansas? The sticker price isn’t the only factor you need to consider while buying a new car. Sales tax, which varies depending on where you buy your car, is one of the most significant supplemental expenses to consider when buying a car. So, do you know how much Arkansas car sales tax costs? 

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You must know that the car sales tax in Arkansas is one of the highest in the country. However, the car sales tax varies from state to state. But Arkansans can be relieved that the sales tax rate of trailers, used cars, and semi-trailers priced between $4,000-$10,000 dropped to 3.5% in January 2022.  

So, how much does Arkansas car sales tax costs you? Should you pay sales tax on a used car? How can you avoid paying sales tax? Our blog has all that covered. Keep reading to know more! 

How much is the sales tax on a car in Arkansas? 

All car sales in the state include a tax rate of 6.5 percent. Still, your overall tax cost will depend on the county and municipal taxes, which might add another 5% to your overall tax cost. The average car sales tax comes to around 9.133%.  

With a rate of 6.5%, the state ranks tenth among the states with the highest car sales tax rates. The rate remains the same whether you buy a new or used car. County and local sales taxes will also add to the tax rate. With a rate of 11.5%, Lincoln Country ranks the highest among the counties in the state.  

With a total tax rate of 7%, Carroll County has the lowest one! 

How do you calculate sales tax on a car in Arkansas? 

Find the city’s overall sales tax rate as a starting point for your car’s sales tax calculation. For instance, the rate in the state is 6.5%. Then, add the sales tax fee to the car’s price (before incentives and after trade-ins). 

Imagine buying a car for around $25,000 with a tax rate of 6.5%. Your car is worth $5,000 as a trade-in, and you also receive a $2,000 incentive. Trade-ins are not taxed, but incentives and rebates are; therefore, the total taxable amount is $20,000. Then, multiply $20,000 by 0.065 to get $1,300, which is the tax rate. So, the total cost of your car will be $19,300.  

• Initial car cost = $25,000 
• Sales tax rate = $6.5% 
• Trade-in cost = $5,000 
• Incentive = $2,000 
• Arkansas new car sales tax = ($25,000-$5,000) * 0.065 = $1,300 

Visit the Department of Finance and Administration website to calculate Arkansas car sales tax! 

What are the exemptions on car sales tax in Arkansas?  

Though most car purchases require sales tax in the state, there are a few exemptions. You can submit a claim form on the DFA Tax Credits/Special Refunds page to request a car sales tax exemption. In addition, you can apply for an exemption if you meet any of these conditions.  

• You are a disabled veteran who obtained financial help from the Department of Veterans Affairs to buy the car. 
• You bought the car to transport the elderly, crippled, or mentally ill, being part of a Department of Human Services (HHS) program or nonprofit organization.  
• The car’s price is below $4,000.  

Which are the best states to buy a car? Here’s more info!

Do I have to pay sales tax on a used car in Arkansas? 

Yes. Used cars priced below $4,000 aren’t subjected to state sales tax. However, used cars priced above $4,000 will have a tax rate of 6.5%.  

How do I avoid paying sales tax on a used car in Arkansas? 

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You can avoid paying sales tax on car transactions if you buy a used car in Arkansas for less than $4,000. 

How much is the sales tax on a car in Benton County, Arkansas? 

Localities in Benton County are subject to a 1% countywide sales tax rate in addition to the 6.5% Arkansas sales tax rate. 

Do I have to pay sales tax on my car when I move to Arkansas? 

Purchases of both new and old cars require you to pay sales tax in the state. This tax is payable at the time of car registration, not at the time of purchase. For information on any applicable sales tax rates, taxpayers should contact their local county or city government.  

Can you pay sales tax on a car with a credit card in Arkansas? 

No. The best way is to pay by check or to use cash with the right receipt provider.  

Can you pay sales tax on a car online in Arkansas? 

Yes. If you choose to pay it online, pay by visiting the Department of Finance and Administration website.  

Which counties have the lowest and highest car sales tax in Arkansas?

With a tax rate of 7%, Carrol County has the lowest rate. However, Lincoln County has the highest tax rate, with 11.5%.   

What additional costs will you incur while buying a car in Arkansas? 

The cost of buying a car doesn’t end with sales tax alone. Additionally, remember that most dealerships charge documentation fees, title and registration fees, and expenses for changing your license plate. The following are some additional rates you will incur while buying a car. 

Cost type	Average rate
Sales tax	9.133%
Registration	$17-$30
Title	$10
Plate transfer	$1
Documentation fee	up to $129

 

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