Arkansas local tax updates in 2026

TL;DR

Several Arkansas cities and counties are changing their local sales tax rates starting January 1, 2026. This includes annexation-driven updates in over a dozen jurisdictions, plus a food tax repeal statewide. Avoid new year invoice errors by reviewing your settings now — before the January 1 effective date kicks in.

What changed

New year, new rates — and no more end-of-year tax shock. Arkansas is updating several local tax rates and annexations effective January 1, 2026. This means the new rates will apply to transactions billed on or after that date — especially relevant for contract bids and recurring billing cycles.

Key updates include:

• Statewide: The Food Tax is rescinded, dropping to 0%
• Howard County: Increasing local rate to 2.75%
• Sharp County: Decreasing to 1.25%
• Little Rock: Annexation update with a 1.125% local rate
• Springdale & Ward: Both cities annexed at 2%
• Additional cities with annexation-driven rate additions include:
  • Arkadelphia (2%)
  • Bauxite (1.5%)
  • Branch (1%)
  • Cave Springs (2.25%)
  • Conway (1.75%)
  • Garfield (1.5%)
  • Marshall (1.5%)
  • Mena (1%)
  • Pea Ridge (2%)
  • Rector (2%)
  • Rockport (3%)
  • Sherrill (1%)

These annexations often reflect newly developed areas or boundary updates that bring new parts of a city into the tax zone.

Who this affects

• Texas-based sellers holding physical inventory
• Ecommerce sellers using Texas 3PLs or warehouses
• Service businesses with taxable equipment
• Any business subject to local ad valorem tax on tangible personal property

Why this matters

Local rate shifts may seem minor — but even a 0.5–1% increase can:

• Cause invoice discrepancies
• Trigger customer complaints or refund requests
• Lead to audit red flags if returns don’t match collected rates

And since these changes hit right at the start of Q1, there’s zero margin for error.

If you’re manually managing tax rates, double-check your system is updated by January 1, 2026.

Next steps for sellers

• Review where you ship or sell into Arkansas — especially the newly listed cities
• Check contract billing start dates — updates apply based on billing date, not purchase date
• Update your sales tax engine or confirm your provider (like TaxCloud) is synced
• Flag any recurring subscriptions or long-term invoices that span Jan 1
• For food retailers, confirm that food tax is now 0% statewide