Arkansas local tax updates in 2026
Arkansas is rolling out local sales tax changes effective January 1, 2026 — including annexation-based rate increases in Little Rock, Springdale, Conway, and more. Sellers should update tax settings now to avoid new year compliance issues.
Written by Ryan Pinkham
VP of GTM
Published
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- Statewide: The Food Tax is rescinded, dropping to 0%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.
Reminder for sellers: Annexation rates apply based on delivery location, not billing address. If you’re shipping taxable goods into any of these cities, your point-of-sale or sales tax software must apply the updated rate as of January 1.
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.
If you use TaxCloud
You’re covered! TaxCloud will apply the new rates automatically across all affected ZIP codes.
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
Official sources:
- 1.
Disclaimer
TaxCloud provides sales tax compliance solutions. We do not provide legal or tax advice. For questions about your specific tax situation or filing requirements, we recommend consulting a qualified sales tax accountant.
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