Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Do you need to collect sales tax in Arkansas?
You’ll need to collect sales tax in Arkansas if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Arkansas?
Arkansas considers a seller to have physical nexus if you have any of the following in the state:
- An office or place of business (owned or leased)
- A warehouse or agency in Arkansas (owned or leased)
- Real or personal property
You can click here to read exactly what the Arkansas Department of Revenue (Arkansas’s taxing authority) has to say about what constitutes sales tax nexus in Arkansas on page 1 under “Doing Business As.”
Do you have economic nexus in Arkansas?
Arkansas considers vendors who make more than $100,000 in sales annually or more than 200 transactions in the state to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read Arkansas’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here.
Is what you’re selling taxable?
If you’ve discovered you have sales tax nexus in Arkansas, your next step is to determine if what you’re selling is taxable.
Services in Arkansas are sometimes taxable. You can read more about taxable services in Arkansas here.
Tangible products are taxable in Arkansas, with a few exceptions. These exceptions include certain items used in agriculture and constructions, among other things. You can find a list of Arkansas’s non-taxable items in this guide starting on page G. The state sales tax rate in Arkansas is 6.5%. Calculate the full sales and use tax rate (including local tax) by using the TaxJar sales tax calculator here.
Each year, a Back to School sales tax holiday is held in August, which gives exemptions for state and local sales or use tax on clothing under $100, clothing accessories or equipment under $50, and electronic devices, school supplies, school art supplies, and school instructional materials. For the full, itemized list of exemptions, consult the Arkansas Department of Finance and Administration’s site.
If you have sales tax nexus in Arkansas and your products are taxable, your next step is to register for a sales tax permit.
Is SaaS taxable in Arkansas?
SaaS is non-taxable in Arkansas. Both software delivered electronically is not considered taxable, and “the use of prewritten computer software in providing software programming services does not cause the programming services to become taxable unless tangible personal property is provided to the customer.” (Source)
How to get a sales tax permit in Arkansas
You can register online at the Arkansas Taxpayer Access Point (ATAP) or fill out the paper application Just click “Sign up” and you’ll be prompted to enter business info then register for your sales tax permit.
What information do you need to register for a sales tax permit in Arkansas?
- SSN or ITIN number
- Business identification information
- Business entity type
- Nature of your business
- NAICS Code
It costs $50 to apply for an Arkansas sales tax permit. Other business registration fees may apply to some businesses. Contact each state’s individual department of revenue for more about registering your business.
How to Collect Sales Tax in Arkansas
Arkansas is a destination-based sales tax state. So no matter if you live and run your business in Arkansas or live outside Arkansas but have nexus there, you would charge sales tax at the rate of your buyer’s ship-to location.
And if you live outside of Arkansas but have sales tax nexus in Arkansas, you would also charge sales tax at the local sales tax rate of the buyer’s ship-to address.
Should you collect sales tax on shipping charges in Arkansas?
Arkansas considers shipping charges that you charge the customer to be part of the taxable sale, and therefore if the item you are selling is taxable then the shipping charges are also taxable.
Read a full explanation of sales tax on shipping in Arkansas here.
When are Returns Due?
When you file and pay Arkansas sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Arkansas?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Arkansas, you will be required to file and remit sales tax either monthly, quarterly or annually.
Arkansas sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Arkansas you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Arkansas
Calculating how much sales tax you should remit to the state of Arkansas is easy with TaxJar’s Arkansas sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Arkansas sales tax return will be waiting for you in TaxJar. Try a 30-day free trial of TaxJar now.
How to File and Pay Sales Tax in Arkansas
You have three options for filing and paying your Arkansas sales tax:
- File online – File online at the Arkansas Taxpayer Access Point (ATAP). You can remit your payment through their online system.
- File by mail – You can use Form ET-1 and file and pay through the mail. To file this way you must contact the Arkansas Department of Finance and Administration at 501-682-7104 and a form ET-1 will be mailed to you. Here are instructions for filling out Arkansas sales tax form ET-1.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.