Arkansasincome tax up to 3.9%, 16th lowest property tax, median home $195K

Worth knowing before you move to Arkansas

Arkansas has been cutting its income tax rates every legislative session since 2015, and the top rate is now well under 4%. Home prices remain among the lowest in the country, especially outside Northwest Arkansas, where Walmart, Tyson and J.B. Hunt have built a fast-growing corporate corridor around Bentonville and Fayetteville. Tornado season is real across the whole state.

What Arkansas taxes, and what it doesn't

Arkansas levies a graduated income tax that tops out at 3.9%. A household earning $75,000 pays an effective 3.6%, about $2,695 a year; at $150,000 the effective rate is 3.6%. Among the 41 states that tax income, Arkansas has the 9th lowest effective rate at $100,000 of income.

Property tax runs 0.60% of home value a year, roughly $1,170 on the state's median home of $195K. The national effective rate is about 1.10%, and Arkansas has the 16th lowest rate of the 50 states.

Combined state and local sales tax averages 9.46%, the 3rd highest in the country (the state portion is 6.5%).

For retirees: Social Security benefits are not taxed, pension income is partly exempt, and there is no estate or inheritance tax.

Capital gains are taxed as ordinary income.

Housing and the cost of living in Arkansas

Arkansas's cost of living index is 85, where 100 is the national average; that is the 3rd cheapest of the 50 states.

The median home costs $195K, 36% below the national figure and the 3rd lowest among the states. A two-bedroom rents for about $970 a month.

Carrying costs matter as much as the price: home insurance averages $2,600 a year, flood coverage adds about $750 where it is needed, car insurance runs $1,740.

Budget $130 a month for electricity and gas, $390 a month in groceries for two, $820 a month for full-time infant care.

Safety, health and schools

Violent crime is 619 incidents per 100,000 residents in the FBI's 2023 Crime Data Explorer figures, above the median state (387); Arkansas is the 4th most violent of the 50 by that measure. Property crime is 2,469 per 100,000.

Life expectancy is 73.8 years (County Health Rankings 2024). 9.4% of residents have no health insurance, and the state has expanded Medicaid. The Commonwealth Fund's 2023 scorecard ranks Arkansas's health system 44th of 50.

Education Week's 2023 Quality Counts report ranks K-12 schools 42nd in the country, and the state runs a school-choice voucher program.

Politics, guns and social policy

Politically, Arkansas is a solidly Republican state that went to Trump by 28 points in 2024.

On guns, no permit is required to carry a concealed handgun, and Giffords grades the state's gun laws F.

Abortion is banned with narrow exceptions. Marijuana is medical only. Arkansas is a right-to-work state, and the minimum wage is $11.00 an hour.

Climate, risk and getting around

Natural disaster risk is high. The main hazards are tornado, flood. Annual average air quality index is 35 (under 50 is good).

Arkansas has no top-25 hub airport, with about 35 nonstop destinations from its busiest airport.