I’ve struggles on how to respond to this thread. Taxes are complicated. To me, for this to be meaningful you need to compare the whole package, not just look at the steering wheel when you are buying a vehicle. If you look into it, it’s just amazing how many things are taxed. How to look at them and make any comparison is a challenge. For income tax, what tax bracket are you in? For property tax, what use classification is it in and how is it assessed? For vehicle licenses, it depends on the value of the vehicle here while many states have a set dollar amount. What kinds of exemptions and deductions do they allow? Are you in a rural area or are you in a city or town?
The Arkansas state sales tax rate is 6.5%, except for food which is only 1.5%. My county adds another 1.25% to that. Different cities in the county add another percentage, ranging for 0% to 3% extra, though a couple of cities add an additional 2% for hotel tax.
For income tax it depends on which bracket you are in, but if you earn $35,600 and file as a couple you pay $1555. Anything above that you pay an additional 7%. Of course that is the base rate. You then start applying various deductions though there aren’t many state deductions. Say you earn $50,000 a year you’ll pay about $2,275 if you file as a couple. The number of dependents you claim makes very little difference, looks like about $5 per kid. If you make $100,000 as a couple you’ll pay about $5,780.
Property tax is a real mess. Millage is paid on the assessed value but the assessed value is 20% or market value. I don’t know why they do that. The county I grew up in at one time had the highest millage rate in the whole country, but the assessed value was 10% of market value, so while it was the highest rate in the country the effective rate wasn’t very much. Beware of people quoting statistics. They can lie to you while stating true facts.
Instead of any homestead exemption like a lot of states have, in Arkansas we get a straight $350 deduction in taxes. Another benefit, when you hit 65 your assessment value for primary residence if frozen. As long as you don’t move or do something drastic, it never goes up.
The school district I’m in has a millage of 42.9. Other school districts in the county vary from 39.5 to 45.65 mils, a lot of that depending on whether they have built any new schools lately. In addition there is a county millage of 6 mils, with 1.1 going to roads and 1 going to libraries, leaving the county 3.9, mils for the general fund. In addition, the various cities might add anything form 0 miles to 8.2 mils.
If your property is assessed for $100,000 and you live rural like I do and in my school district, the annual property tax is about $628.
I’m not going to go through any more, that’s enough. I don’t trust any of these online comparisons you can find to see how your state ranks because a lot of that depends on your tax bracket and where you live in the state, but overall Arkansas is one of the poorest states and our effective taxes are fairly low. So is our level of services. You get what you pay for and we can’t afford a lot. That's the other side of this, what are you getting for the money?
