Arkansas New Car Sales Tax: What You’ll Pay in 2025

Arkansas charges a 6.5% state sales/use tax on the taxable price of a new vehicle, plus any applicable city and county sales taxes; local taxes are generally applied only to the first $2,500 of the vehicle’s taxable price. In practice, you’ll pay 6.5% on the full taxable amount (after any qualifying trade-in credit) and your local rate on just the first $2,500, with tax typically due when you title/register the vehicle in Arkansas.

The statewide rate

Arkansas’s state sales/use tax on motor vehicles is 6.5%. This applies to the full taxable price of the vehicle and is owed whether you buy from an Arkansas dealer, an out-of-state dealer, or a private seller (the latter two are typically collected when you register the car in Arkansas).

Local city and county taxes (and the cap)

Cities and counties in Arkansas may levy additional sales taxes. For motor vehicles, those local taxes are generally collected only on the first $2,500 of the vehicle’s taxable price, regardless of the vehicle’s total cost. Your exact local rate depends on where the vehicle is registered.

What counts as the “taxable price”

Arkansas calculates motor-vehicle sales/use tax on the selling price after subtracting any dealer trade-in allowance. Dealer discounts reduce the taxable amount, but manufacturer rebates typically do not; tax is generally calculated before the rebate is applied. Title, registration, and plate fees are not subject to sales tax, while dealer document fees usually are.

Key facts at a glance

The following points summarize how Arkansas applies sales tax to new vehicle purchases and what most buyers should expect at the time of titling and registration.

• State tax rate: 6.5% on the full taxable price.
• Local taxes: City/county rates vary and generally apply only to the first $2,500 of the taxable price.
• Trade-in credit: The value of a dealer trade-in reduces the taxable price.
• Out-of-state purchases: Arkansas use tax is due at the same rates when you title the vehicle in Arkansas; credit is typically given for legally paid tax to another state, up to the Arkansas amount.
• Due at registration: Tax is generally paid when you title/register the vehicle with the state’s revenue office.

Together, these rules mean most buyers will owe 6.5% on their post–trade-in price, plus a smaller local-tax portion that’s capped by the first $2,500 of the taxable amount.

Examples

These scenarios illustrate how Arkansas calculates sales tax on new vehicle purchases under common situations.

• $40,000 new car, $10,000 dealer trade-in, local rate 2.5%:
  State tax: 6.5% of $30,000 = $1,950. Local tax: 2.5% of $2,500 = $62.50. Total tax due: $2,012.50.
• $28,000 new car, no trade-in, local rate 3%:
  State tax: 6.5% of $28,000 = $1,820. Local tax: 3% of $2,500 = $75. Total tax due: $1,895.

In both examples, the state portion scales with the full taxable price, while the local portion is limited by the $2,500 cap, keeping local tax relatively small on high-priced vehicles.

How to estimate your Arkansas new car tax

Use this simple process to ballpark your tax before you head to the revenue office or finalize paperwork at the dealership.

1. Determine your taxable price: agreed selling price minus any dealer trade-in allowance (and dealer discounts, if applicable).
2. Calculate state tax: multiply the taxable price by 6.5% (0.065).
3. Find your local rate: add your city and county sales tax rates where the vehicle will be registered.
4. Calculate local tax: apply your combined local rate to the first $2,500 of the taxable price (or to the full taxable price if it’s under $2,500).
5. Add the two amounts: state tax plus local tax equals your estimated total sales/use tax.

This approach gives a close estimate; final amounts may vary slightly based on fees, exact transaction details, or documentation treatment.

Registration, timing, and cross-border purchases

Arkansas generally collects vehicle sales/use tax at the time you title/register the vehicle. If you purchased the vehicle out of state, you’ll owe Arkansas use tax at the same rates when you register it in Arkansas, typically with credit for any sales tax legally paid to another state (up to the Arkansas amount). Keep your bill of sale and any proof of tax paid to avoid delays.

Summary

Arkansas taxes new car purchases at 6.5% statewide, plus applicable city and county taxes that are generally applied only to the first $2,500 of the taxable price. The taxable amount is reduced by a dealer trade-in but usually not by manufacturer rebates. Expect to pay the tax when you title/register the vehicle in Arkansas, with total liability driven by your post–trade-in price and your local tax rate.

How do you calculate sales tax on a new car 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.

How to avoid Arkansas sales tax on new vehicles?

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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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 much is tax and title on a car in Arkansas?

The title fee is $10. And if there’s a lean the filing fee is an additional 50 dealership fees are another factor documentation fees average around $129.