Arkansas law sets income tax rates for people and corporations

Individuals, trusts, and estates would calculate Arkansas income tax using graduated rates from 0% to 3.7%. The rules cover every Arkansas resident individual, trust, or estate with net income up to or above $94,700. Income of $94,700 or less uses brackets ranging from 0% to 3.7%. Income above $94,700 uses a 2% rate on the first $4,700 and a 3.7% rate above that amount. People with income from $94,701 through $97,600 may subtract a bracket adjustment ranging from $290 to $10. The tax tables must be adjusted each year under the method in the cited law. These rules apply to tax years beginning on or after January 1, 2026.

Domestic and foreign corporations would pay Arkansas income tax using rates from 1% to 4.1% on covered net income. The rules cover corporations organized under Arkansas law and foreign corporations doing business in Arkansas. The rate schedule applies to the corporation's net income as defined by Arkansas tax law. For domestic corporations, the tax applies to the corporation's entire net income received during the income year. For foreign corporations, the tax applies to the Arkansas-apportioned share of their entire net income. The first $3,000 is taxed at 1%, the next $3,000 at 2%, the next $5,000 at 3%, and income above $11,000 at 4.1%. These rules apply to tax years beginning on or after January 1, 2027.