How Much Is Sales Tax on a New Car in Arkansas?

In Arkansas, the state sales tax on a new car is 6.5% of the taxable price, and most buyers also owe local city and county sales taxes based on where the vehicle is registered. Local rates vary by jurisdiction and, in many places, are subject to a “single-transaction” cap that limits how much local tax can be charged on a vehicle purchase. The taxable price generally equals the purchase price minus any trade-in value; dealer discounts can reduce it, while manufacturer rebates typically do not.

What the Arkansas car sales tax includes

The following points outline how Arkansas calculates sales tax on a new vehicle and what can affect the amount you owe at registration.

• State rate: A 6.5% state sales (gross receipts) tax applies to the taxable vehicle price.
• Local taxes: City and county sales/use taxes usually apply based on your registration (garaging) address, not the dealer’s location. Combined local rates commonly range from about 1% to 5%.
• Local caps: Many Arkansas cities and counties have a “single-transaction” maximum that caps the amount of purchase price subject to their local tax, but the cap amount varies by jurisdiction and some have no cap. This can significantly limit the local tax due on high-priced vehicles.
• Trade-in credit: Arkansas allows full credit for the value of a vehicle you trade in toward your new car, reducing the taxable price.
• Discounts and rebates: Dealer discounts reduce the taxable price; manufacturer rebates generally do not reduce the taxable amount under Arkansas rules.
• Who collects: For many transactions, tax is paid to the Arkansas Department of Finance and Administration (DFA) when you title and register the vehicle (often within 60 days of purchase). Some dealers may handle filing and payment on your behalf.

Taken together, most buyers can expect to pay 6.5% in state tax on the post–trade-in price plus a smaller, location-dependent local amount that may be capped, keeping local tax relatively modest on expensive vehicles.

How to compute your tax

Use these steps to estimate your Arkansas new-car sales tax, keeping in mind that exact local rates and any caps depend on your registered address.

1. Determine your taxable price: Start with the purchase price, subtract any trade-in value and dealer discounts. Do not subtract manufacturer rebates unless the DFA specifically treats them as price reductions for your transaction.
2. Calculate state tax: Multiply the taxable price by 6.5%.
3. Find your local rates and caps: Look up your city and county sales/use tax rates and whether each has a single-transaction cap (and the cap amount, if applicable).
4. Apply local taxes: If your jurisdiction has a cap, apply the local rate only to the amount up to that jurisdiction’s cap; if there is no cap, apply the full local rate to the taxable price.
5. Add it up: State tax + city tax + county tax = total sales tax due at registration (separate from title, registration, and plate fees).

This approach gives you a reliable estimate; checking your exact local rules ensures your final number accounts for any caps or special provisions.

Example calculations

Example A (with trade-in and local caps): New SUV price $40,000; trade-in value $10,000; taxable price $30,000. State tax = 6.5% of $30,000 = $1,950. Suppose your city rate is 2% and county is 1%, and both jurisdictions cap tax at the first $2,500 of the purchase price. City tax = 2% of $2,500 = $50; county tax = 1% of $2,500 = $25; total local = $75. Total sales tax = $1,950 + $75 = $2,025.

Example B (no local cap): Same $30,000 taxable price. If your combined city+county rate is 3% with no cap, local tax = 3% of $30,000 = $900. Total sales tax = $1,950 + $900 = $2,850.

Other costs you may see at the DMV

Beyond sales tax, you’ll encounter additional fees when you title and register a new vehicle in Arkansas. Here are common items to account for in your budget.

• Title and registration fees: Standard charges to title the vehicle and obtain plates, which vary by vehicle type/weight.
• Lien recording fee (if financed): A charge to record the lender’s lien on the title.
• Document/dealer fees: Often taxable; these may be listed on your purchase agreement.
• Specialty or supplemental fees: For example, certain alternative-fuel or specialty plate fees may apply, separate from sales tax.

While these aren’t part of the sales tax, including them in your planning will give you a more accurate out-the-door cost.

Where to verify your exact local rate and any caps

Because local rates and single-transaction caps vary by Arkansas city and county, it’s wise to confirm the specifics for your registration address before you buy. The Arkansas Department of Finance and Administration (DFA) publishes current local sales/use tax rates and “maximum tax” (cap) tables, and your local county assessor or revenue office can confirm how they apply to motor vehicles.

• Check DFA’s local sales/use tax lookup and maximum tax tables for your city and county.
• Call or visit your local revenue office to confirm how the local cap (if any) is applied to vehicle purchases.
• Ask the dealer to quote taxes based on your registration address, not the dealership’s location.

Verifying these details ensures your estimate reflects the precise local rules at the time you register the vehicle.

Summary

Arkansas charges 6.5% state sales tax on a new car’s taxable price, with additional city and county taxes based on where you register the vehicle. Local rates vary and many jurisdictions cap how much of the price is subject to their local tax, often keeping the local portion relatively small on higher-priced vehicles. Subtract your trade-in value to reduce the taxable base, and confirm your exact local rates and any caps with the Arkansas DFA or your local revenue office before finalizing your budget.

How to calculate sales tax on a new vehicle?

How Is Sales Tax Calculated On a Car? To calculate the amount of car sales tax due on a car purchase, multiply the car price by the state sales tax rate. There may be other factors involved in calculating the sales tax, including trade-ins, rebates, and local taxes.

How to avoid sales tax on cars in Arkansas?

Arkansas currently exempts sales tax on the sale of a new or used motor vehicle or trailer, if the total consideration for the sale of the new or used motor vehicle, trailer, or semitrailer is less than four thousand dollars ($4,000). Sales tax is calculated on the total amount of sale, less trade-in value.
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What is the tax rate on a new car in Arkansas?

The Arkansas sales tax is 6.5% of the gross receipts from the sales of tangible personal property and certain selected services.

How to calculate sales tax on a vehicle in Arkansas?

When making a car purchase in Arkansas, you’ll pay 6.5% of the vehicle’s purchase price, whether you’re buying from a private seller or a car dealer. Arkansas tax law does not discriminate between the two. Unless you qualify for a sales tax exemption (discussed below), you have to pay tax on your vehicle purchase.