What is the Arkansas sales tax on cars?

Arkansas charges a 6.5% state sales and use tax on motor vehicle purchases, and most buyers also owe applicable city and county sales taxes based on where the vehicle is registered, typically bringing the combined rate to roughly 7%–11% in many parts of the state. The tax is calculated when you title and register the vehicle with the Arkansas Department of Finance and Administration (DFA), and it’s generally based on the purchase price after any dealer trade‑in credit, with most dealer-installed add‑ons included in the taxable amount.

How Arkansas calculates tax on vehicle purchases

Whether you buy new or used, from a dealer or a private party, Arkansas assesses sales/use tax when you title the vehicle. The taxable amount generally starts with the purchase price on the bill of sale and is adjusted for certain credits or additions.

What’s included in the taxable amount

The following list outlines common items that are typically included in the taxable price of a vehicle in Arkansas.

• Base purchase price agreed with the seller
• Dealer documentation/processing fees and other mandatory dealer charges
• Factory or dealer-installed accessories and aftermarket add‑ons included at purchase
• Warranties or service contracts if sold as part of the vehicle transaction and deemed taxable by DFA

While exact treatment can vary by line item, most charges that are part of the consideration for the vehicle are taxable. Keep your purchase agreement itemized so DFA staff can properly determine the taxable base.

What can reduce the taxable amount

The items below describe common reductions to the taxable price that may lower the amount of sales/use tax you owe.

• Trade‑in credit when trading a vehicle to a dealer as part of the same transaction
• Manufacturer rebates typically do not reduce the taxable price; dealer discounts usually do
• Qualifying exemptions (e.g., certain family gifts or transfers) when supported by DFA forms

Not every credit or discount changes the taxable base. Trade‑ins to dealers usually help; post‑sale rebates generally do not. Bring supporting documents (title, bill of sale, trade‑in paperwork) to the revenue office.

State and local rates

Arkansas’ state sales/use tax rate on vehicle purchases is 6.5%. In addition, the state applies local city and county sales/use taxes based on where you register the vehicle, which commonly adds 1%–4.5% or more. That means the total combined rate in many Arkansas locations falls between roughly 7% and 11%.

Exemptions and special cases

Most motor vehicle purchases are taxable, but Arkansas law provides limited exemptions. Common examples include certain transfers between qualifying family members (with a proper gift affidavit), some inheritance or divorce-related title transfers, and specific governmental or nonprofit transactions. Arkansas has also periodically adjusted thresholds for taxing low‑value private‑party used vehicle sales; check the current DFA guidance to confirm whether any price‑based exemption applies at the time you buy.

How and when you pay

For dealer purchases in Arkansas, the dealer may collect and remit the tax or provide you paperwork to pay at a DFA revenue office. For private‑party or out‑of‑state purchases, you pay the tax directly to DFA when you title and register the vehicle. Payment is due by the DFA’s registration deadline after purchase; bring your bill of sale, title/odometer documents, proof of insurance, and any trade‑in or exemption paperwork.

Out-of-state purchases and tax credits

If you buy a vehicle out of state and bring it to Arkansas, you will typically owe Arkansas tax when you register it here. Credit may be available for legally paid sales/use tax to another state; retain your itemized receipt and proof of payment. Because credit rules can be nuanced—especially for local taxes—confirm specifics with DFA before you buy.

Quick example

Consider a $30,000 vehicle purchased from an Arkansas dealer with a $5,000 trade‑in credit, registered in an area with a 3% combined local rate. Taxable amount: $25,000. State tax at 6.5%: $1,625. Local tax at 3%: $750. Total sales/use tax due: $2,375. Actual local rates vary; always verify your locality’s current rate.

Bottom line

Expect to pay Arkansas’ 6.5% state sales/use tax on a car plus your city and county sales taxes, for a typical combined rate around 7%–11%, calculated on the purchase price after any dealer trade‑in credit. Confirm current local rates and any applicable exemptions with the Arkansas DFA before you finalize a purchase.

Summary

Arkansas taxes vehicle purchases at a 6.5% state rate, with additional local taxes based on your registration address. The taxable base generally includes the purchase price and most dealer fees/add‑ons, minus any dealer trade‑in credit. Pay the tax when titling/registering with DFA, and check current rules for exemptions, deadlines, and out‑of‑state credits.

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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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.

What is Arkansas’s current sales tax rate?

6.50 percent
Arkansas Tax Rates, Collections, and Burdens
Arkansas also has a 6.50 percent state sales tax rate and an average combined state and local sales tax rate of 9.45 percent. Arkansas has a 0.53 percent effective property tax rate on owner-occupied housing value. Arkansas does not have an estate tax or inheritance tax.

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.