How To Pay Arkansas Excise Tax
Arkansas doesn’t have an excise tax on cars, but you will have to pay it on other products like alcohol, cigarettes, and gasoline.
Written by Meaghan Branham
Reviewed by Pat Roache
While Arkansas doesn’t have anything specifically called an excise tax applied to vehicles, they do require car owners to pay a yearly registration fee to the Arkansas Department of Transportation.
There are a lot of fees associated with buying a car, from the down payment itself to the registration fees, then property and sales taxes. Knowing exactly what you owe in your state isn’t always easy, though, so it’s best to do your research on both your upfront fees and your long-term payments when you’re planning on buying a car, so you’re not caught off-guard.
One of these often-lamented costs? The excise tax. To guide you through these murky waters,
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What is an excise tax in Arkansas?
If you’ve never heard of an excise tax, you’re not alone. Some states don’t levy these taxes on cars, although most, including Arkansas, charge them for gas, wine, liquor, and other products. However, Arkansas is one of the states that does not have an excise tax when it comes to vehicles.
Before you start celebrating, let’s talk about what an excise tax is and why some states might charge it on cars. An excise tax is usually applied to manufactured goods that pose a health or environmental risk. These are often paid by the retailer selling the product and passed on to the consumer. Sometimes, the consumer might not even know they are paying them, because the retailer may just add it to the overall cost without making it clear.
In states in which there is an excise tax on vehicles, it is paid each year, around the same time. Car owners in Arkansas, however, only have to pay an annual renewal fee for their
vehicle registration
—not an annual excise tax. Here are the renewal fees in Arkansas:
- Passenger cars & motorhomes under 3,000 lbs: $17
- Passenger cars & motorhomes 3,001 to 4,500 lbs: $25
- Passenger cars & motorhomes over 4,501 lbs: $30
- Trucks & vans: $21
- Motorcycles less than 250cc: $3
- Motorcycles more than 250cc: $7
There is, however, a sales tax in Arkansas that is different from the excise tax. The sales tax in Arkansas is only paid once and accrues 6.5% of the vehicle price if it costs more than $4,000. Vehicles that cost less than $4,000 total will not need to pay this tax.
What you will pay excise tax on in Arkansas
Just because you do not have to pay an excise tax on your car in Arkansas, doesn’t mean there is no excise tax at all in the state. The Natural State applies an excise tax to goods like beer, wine, liquor, cigarettes, and gasoline.
Arkansas levies a 1% excise tax on beer, a 3% tax on liquor, and a charge of $0.05 per case sold for wine. For all of these products, the excise tax is included in the purchase tax by the retailer before you buy it.
The Arkansas excise tax on cigarettes is $1.15 per 20 cigarettes, which is the average amount sold per pack.
When it comes to gasoline, the excise tax is $0.22 per gallon and is included in the pump price at all gas stations in the state.
There is also a rental car excise tax in Arkansas, charged with the total of your rental car cost. That charge is an additional 10% of your total cost.
MORE: Arkansas gas tax
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How to save on car insurance in Arkansas
While there is no excise tax on cars in Arkansas, there are still plenty of car-related costs that can add up quickly. Luckily, with the help of
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