Arkansas Short-Term Rental Tax Overview
Arkansas imposes state income tax at rates up to 4.4% on net rental income, combined with Gross Receipts Tax + Tourism Tax at 8.5% on gross rental receipts. 6.5% state sales tax + 2% state tourism tax on accommodations. The total tax burden for Airbnb hosts in Arkansas varies by location, ranging from approximately 12% in Little Rock to 11.5% in Bentonville. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Arkansas Department of Finance and Administration and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 4.4%
Graduated rates from 2% to 4.4% (reduced from 4.9% in 2024)
- Net STR income (after expenses) reported on the Arkansas state income tax return
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Self-employment tax may apply if you provide hotel-like services (daily cleaning, meals, concierge)
Gross Receipts Tax + Tourism Tax
Rate: 8.5%
6.5% state sales tax + 2% state tourism tax on accommodations
What Airbnb Collects Automatically
- State gross receipts tax (6.5%)
- State tourism tax (2%)
What Hosts Must Collect and Remit
- City and county taxes (1-5% additional)
- Some cities impose their own hospitality tax
Local Tax Rates by City in Arkansas
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Little Rock | 2.5% city + 1% county | 12% | Yes |
| Hot Springs | 3% city + 3% county | 14.5% | Yes |
| Fayetteville | 2% city + 1% county | 11.5% | Yes |
| Eureka Springs | 3% city + 1% county | 12.5% | Yes |
| Bentonville | 2% city + 1% county | 11.5% | Yes |
Deductions for Arkansas Airbnb Hosts
Arkansas generally conforms to federal tax rules for rental deductions, including the standard 27.5-year depreciation schedule. However, Arkansas decoupled from federal bonus depreciation provisions, so hosts must use regular MACRS depreciation on their state return even if they claim bonus depreciation federally. Arkansas does allow a deduction for 50% of net capital gains, which can benefit hosts who sell rental properties. The state also recently reduced its top rate to 4.4%, making it more competitive.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Sales Tax Permit
Cost: Free
Register at: Arkansas Department of Finance and Administration
Filing Schedule
Monthly for sales/tourism tax; annually for income tax
Key Resources
Common Arkansas Tax Mistakes for Airbnb Hosts
Mistake #1
Not collecting the 2% state tourism tax separately from sales tax — Arkansas imposes both 6.5% sales tax and 2% tourism tax on short-term rentals, and they are reported on different lines of the sales tax return.
Mistake #2
Forgetting city-level hospitality taxes — tourist destinations like Hot Springs and Eureka Springs have high local taxes (up to 6% combined city/county) that Airbnb may not collect.
Mistake #3
Missing the distinction between short-term and long-term rentals for sales tax purposes — only rentals under 30 days are subject to the sales tax and tourism tax in Arkansas.
Arkansas Short-Term Rental Regulations Beyond Tax
Arkansas has relatively few statewide STR regulations. The state requires a sales tax permit for any business collecting sales tax. Individual cities, particularly tourist destinations like Hot Springs and Eureka Springs, have their own STR ordinances including registration requirements, safety inspections, and parking regulations. Fayetteville and Bentonville in northwest Arkansas have seen growing STR regulation discussions but remain relatively permissive.
Calculate Your Arkansas Airbnb Tax
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Frequently Asked Questions
Does Arkansas tax Airbnb income?
Yes. Arkansas imposes state income tax (2-4.4% graduated rates) on net rental income, plus a combined 8.5% in state-level taxes on gross receipts (6.5% sales tax + 2% tourism tax). Cities and counties add 1-6% more. Total occupancy tax can reach 14.5% in tourist areas like Hot Springs. Net rental profit is also reported on your Arkansas individual income tax return.
Does Airbnb collect Arkansas taxes?
Airbnb collects and remits the 6.5% state gross receipts tax and the 2% state tourism tax in Arkansas. However, city and county-level taxes are generally NOT collected by Airbnb. Hosts in cities like Hot Springs, Eureka Springs, and Little Rock must register with local authorities and collect/remit local hospitality and lodging taxes separately.
Do I need a sales tax permit for Airbnb in Arkansas?
Yes. All short-term rental operators in Arkansas need a Sales Tax Permit from the Department of Finance and Administration, even if Airbnb collects state taxes on your behalf. Registration is free and can be done online at the DFA website. You must also register with your local city and county tax offices if they impose additional hospitality taxes.
What is Arkansas's tourism tax on Airbnb?
Arkansas imposes a 2% statewide tourism tax on all transient accommodations (rentals under 30 days) in addition to the 6.5% state sales tax. This tourism tax funds the Arkansas Department of Parks, Heritage, and Tourism. Airbnb typically collects this tax automatically, but hosts should verify on their Airbnb payout statements that both the 6.5% sales tax and 2% tourism tax are being collected.
When are Arkansas lodging tax returns due?
Arkansas sales and tourism tax returns are due monthly, by the 20th of the following month. If your average monthly tax liability is under $100, you may qualify for quarterly filing. Annual income tax returns are due April 15. File sales tax returns through the ATAP (Arkansas Taxpayer Access Point) online system at atap.arkansas.gov.