Taxes in Little Rock
Arkansas's top individual income tax rate has fallen to a real, current 3.7% for 2026 -- the fourth consecutive annual cut since 2022 -- alongside Little Rock's own genuinely high 8.625% combined sales tax and a real, city-specific property tax burden running modestly above the national median, a real, honestly mixed overall tax picture this record discloses precisely rather than picking only the flattering factors.
Exploring the idea of moving?
We can connect you with a local real estate professional who knows the area -- no pressure, just a starting point.
Learn moreArkansas's Top Income Tax Rate Is Falling Fast: 3.7% for 2026
Arkansas's real, current top individual income tax rate is 3.7%, signed into law May 6, 2026 and retroactive to January 1, 2026 -- the fourth consecutive annual cut since Governor Sarah Huckabee Sanders took office in 2023, down from a real 5.9% in 2022 (5.9% -> 4.9% -> 4.4% -> 3.9% -> 3.7%). Governor Sanders has stated a real, disclosed long-term goal of eventually phasing out Arkansas's individual income tax entirely -- this record discloses that goal honestly as a stated aspiration contingent on future legislation, not an already-scheduled further cut.
A Real, Precisely-Disclosed Retiree Benefit: Full Social Security Exemption Plus a $6,000 Retirement-Income Exclusion
Arkansas fully exempts Social Security retirement benefits from state income tax, regardless of a filer's other income. Separately, taxpayers age 59.5 or older may exclude up to $6,000 in combined pension/retirement-account income (one exclusion per qualifying person; a married couple with two qualifying incomes can each claim it, for a real combined maximum of $12,000). This record discloses this real, precise, modest-cap structure directly rather than overstating it as a full exemption on ALL retirement income.
Sales Tax: A Real, Genuinely High Combined 8.625% Rate Inside Little Rock
Arkansas's base statewide sales tax rate runs 6.5%, Pulaski County adds 1%, and Little Rock adds its own 1.125% city rate, for a real, combined 8.625% rate inside most of the city -- a real, substantial rate this record discloses honestly as a genuine trade-off against the falling income tax.
Property Tax: Genuinely Low Statewide, But Little Rock's Own Rate Runs Above the National Median
As detailed in full on the property-taxes topic page, Arkansas's own statewide median effective property tax rate runs approximately 0.81%, genuinely among the lowest in the nation -- but Little Rock's own specific rate runs meaningfully higher, approximately 1.13% per Ownwell's own cited, bill-based figure, above even the national median -- a real, disclosed, city-specific complication this record does not blur into the statewide figure. The real Amendment 79 homestead credit (up to $600/year for 2026) meaningfully softens actual bills.
The Honest Bottom Line: A Rapidly Falling Income Tax Paired With a High Sales Tax
This record's honest reading is that Little Rock's real tax picture pairs a rapidly falling individual income tax (3.7% for 2026, down from 5.9% just four years earlier) with a genuinely high combined sales tax (8.625%) and a city-specific property tax rate running modestly above the national median -- movers should weigh the full, honest mix rather than anchoring to any single tax type alone.
Key takeaways
- Arkansas's real, current top individual income tax rate is 3.7% for 2026, down from 5.9% in 2022 across four consecutive real annual cuts.
- Arkansas fully exempts Social Security from state tax and offers a real $6,000-per-person exclusion (up to $12,000 for a married couple) on other retirement income for taxpayers 59.5+.
- Little Rock's combined sales tax rate runs a genuinely high 8.625% (Arkansas's 6.5% base plus Pulaski County's 1% plus the city's own 1.125%).
- Property tax runs genuinely low statewide (~0.81%), but Little Rock's own specific rate runs above the national median -- approximately 1.13%.
- Little Rock's honest tax picture pairs a rapidly falling income tax with a genuinely high sales tax and an above-national-median city property tax rate.
Want to know what your budget actually buys here?
Tell us a bit about what you're looking for and we'll connect you with someone local who can walk you through real numbers.
Get local guidanceRead the full Little Rock overview for the complete picture -- housing, taxes, climate, and who this place genuinely fits.
Planning a move?
Tell us what you're looking for and we'll connect you with a local expert who can help you make it happen.
Talk to a local expert