Arkansas Sales Tax for New Businesses: $50 ATAP Permit, 6.5% State Rate, Taxable Services and Prepared Food After the 2026 Grocery Exemption

If your business sells tangible goods or taxable services in Arkansas, you need a sales and use tax permit before you make your first taxable sale. The permit costs $50, you apply through the Arkansas Taxpayer Access Point (ATAP), and the state rate is 6.5%. Many new owners are surprised by how many services are taxable, and the rules for food changed on January 1, 2026. This guide covers the permit process, the rate, the services that are taxed, and how the food exemption works for prepared food.

This article is informational, not legal or tax advice. Tax rules depend on your specific products, services, and location. Confirm your obligations with the Arkansas Department of Finance and Administration (DFA) and consult a qualified CPA or tax attorney for complex situations.

Who Needs an Arkansas Sales Tax Permit

Any business selling tangible personal property or taxable services in Arkansas must obtain a sales and use tax permit from DFA. That includes retail stores, online sellers with an Arkansas presence, restaurants, and service providers whose work falls into a taxable category. The permit is tied to the business that holds it. It is not a general business license, and Arkansas does not issue one at the state level.

The permit is registered through the same portal you use for other DFA accounts, so you will set up the account once and manage it from there. Your sales tax permit is the document that lets you collect tax from customers and report it to the state.

The $50 ATAP Permit: Step by Step

Apply through the ATAP portal. Here is what to expect:

1. Clear any other tax liabilities first. If your business has unpaid tax liabilities on another DFA account, resolve them before you apply. Unresolved balances can hold up the process.
2. Gather your documents. If you bought equipment or inventory from a prior business, bring the bill of sale. You will also need your lease if you rent your location.
3. Submit the application and pay the $50 fee. The fee is paid electronically when you submit.
4. Wait for processing. Allow up to 2 weeks for DFA to issue the permit. Do not promise customers a sales start date until you have the permit in hand.

Application page: DFA sales and use tax registration. If you get stuck, call the ATAP help desk at 501-683-2827.

Keep in mind that a sales tax permit can be used only by the business it was issued to. If you buy an existing business, the seller's permit does not transfer to you. You need to apply for your own permit under your own business. Check with DFA about how the purchase affects any existing obligations before you close.

Who Sets Your Filing Schedule

DFA assigns your reporting frequency. DFA sets your account to monthly, quarterly, or annual reporting. You do not pick this yourself, so check the schedule DFA assigns to your account as soon as it is issued. Missing a filing deadline is one of the most common and avoidable problems for new retailers.

If you are not sure which schedule applies to your expected volume, ask DFA before you start collecting tax. Set a calendar reminder for each filing due date.

The 6.5% State Rate and Local Add-Ons

The Arkansas state sales tax rate is 6.5%, and it has been in effect since July 1, 2013. That is the state portion only. Cities and counties also levy their own sales taxes, and the local rate that applies to a sale depends on the business address where the sale is made, as determined by DFA.

This means the total rate your customers pay varies by location. Do not hard code a single total rate into your point of sale system without confirming the local rate for your address on the DFA website. Your location determines the total, so verify the rate for each place you operate.

Arkansas Sales Tax on Services

Arkansas sales tax on services is narrower than sales tax on goods, but it is not limited to a few obvious cases. Several service categories are taxable. The DFA regulations below are the ones most relevant to new businesses:

Taxable service	DFA regulation
Towing	GR-9.5
Solid waste collection	GR-9.6
Landscaping and nonresidential lawn care	GR-9.2

If your business performs any of these services, you need the permit and must collect tax on the gross receipts from the service. For solid waste collection that is the entire fee with no deduction for labor, and for landscaping it is the total consideration, including plant materials. Read the cited regulation for the details that apply to your operation. Do not assume that a service is exempt because it is performed by hand or charged only as labor. Labor-only lawn care is not automatically untaxed, so ask DFA how your specific billing is treated before you quote customers.

Services not listed here may also be taxable, and DFA's guidance changes over time. Check the current regulations or call DFA before you assume a service is exempt.

Prepared Food After the 2026 Grocery Exemption

Starting January 1, 2026, Act 1008 of 2025 exempts food from state sales tax. This is a significant change for grocers and food retailers, but it does not cover everything. Prepared food remains taxable, and the exemption does not change how local taxes work.

In practical terms, separate your products into two groups in your system:

• Food items covered by the exemption: Food and food ingredients, such as groceries, are exempt from state sales and use tax under Act 1008 of 2025. The Amendment 75 excise tax and all city and county taxes still apply to food.
• Prepared food: Food sold ready to eat, such as restaurant meals and hot prepared items, stays taxable at the state level.

Local taxes are not affected by the state exemption, so confirm with DFA how city and county rates apply to food items at your location. Do not assume the state exemption removes local tax from every food sale. Set up your register so each product is coded correctly from the first day you open.

Setting Up Your Business to Collect Tax Correctly

Getting the setup right before your first sale saves you from amended returns and back tax later. A few practical steps:

• Code every product and service as taxable, exempt, or prepared food before you open.
• Keep records of every sale, including the tax collected and the location of the sale.
• Calendar your filing due date based on the schedule DFA assigns.
• Keep your permit information on file and confirm the account is active before the first filing period.
• Ask about any new registrations that also apply to your business through ATAP, such as withholding if you have employees.

Arkansas has 75 counties and 500 municipalities, and the local rate is set by where your business is located. If you sell at events or operate in more than one place, confirm the rate and filing requirements for each location.

Where to Get Help

Use the official resources first:

• Arkansas Department of Finance and Administration: dfa.arkansas.gov. This is the source for permits, rates, filing schedules, and regulations.
• ATAP help desk: 501-683-2827.
• Arkansas Small Business and Technology Development Center: asbtdc.org. Free and low-cost advising on business planning and operations.
• SBA district office for Arkansas: sba.gov/district/arkansas.

For complex situations, such as multistate sales, a business purchase with inherited tax history, or a mix of taxable and exempt products, talk with a qualified CPA or tax attorney before you file. The cost of a short consultation is usually far less than the cost of correcting a filing error.

Key Takeaways

• The Arkansas sales and use tax permit costs $50 and is applied for through ATAP.
• Allow up to 2 weeks for processing, and clear any other tax liabilities first.
• The state rate is 6.5%, plus any city and county tax based on your business address.
• Towing, solid waste collection, and landscaping or nonresidential lawn care are taxable services. Confirm how your specific work is treated.
• Food is exempt from state tax from January 1, 2026 under Act 1008 of 2025, but prepared food and local taxes still need to be handled separately.
• DFA assigns your filing frequency. Check it as soon as your account is set up.

This content is informational only and is not legal or tax advice. Verify current rates, rules, and deadlines with the Arkansas Department of Finance and Administration before you act, and consult a qualified professional for your specific situation.