Property tax revenue is an important source of funding for school districts and city and county governments in Arkansas. Property tax also helps pay for community colleges, county hospitals, libraries, parks and other public services delivered at the local level. Total property tax collections in the state amounted to nearly $1.1 billion in 2014, the most recent year for which statewide figures are available. Property tax is imposed on real property and personal property, which includes personal vehicles, boats and all-terrain vehicles, as well as business personal property such as furniture, machinery and other equipment.

Arkansas Property Tax Basics

In Arkansas, property assessment and tax collection activities are administered at the county level. The county tax assessor is responsible for valuing real and personal property in the county at its estimated full market value on Jan. 1 of the assessment year. The assessor conducts a countywide reappraisal of real property on a three- or five-year cycle. Reappraisals are conducted in other years, when required, to account for property improvements. In the case of personal property, property owners are responsible for reporting taxable property to the assessor's office no later than May 31 of each year. All vehicles in the state require a current tax assessment before vehicle tags can be renewed.

The county tax collector sends out property tax bills by July 1 each year. The tax bill is calculated by first dividing the market value of the property by five. The resulting figure is known as the assessed value of the property, which is used for tax calculation purposes. A home valued by the assessor's office at $100,000, for example, has an assessed value of $20,000. This applies to residential and commercial real property and all taxable personal property. The property tax rate covering a given property is then applied to the assessed value of the property to calculate the tax bill. Property tax is due on Oct. 15.

A homestead tax credit of $350 is available to homeowners who live as permanent residents in an Arkansas home. The property owner must register with the tax assessor's office by Oct. 15 to receive the credit in the current year. The credit only applies to one residential property per taxpayer. If the property owner's full property tax bill is less than $350, then the credit is limited to the amount of the tax bill.

Average Property Taxes in Arkansas

In 2014, the statewide average property tax rate across all categories of property in Arkansas was $46.69 per $1,000 of assessed property value. Average rates varied widely depending on the county. At the high end of the scale, Pulaski County had an average property tax rate of $58.55 per $1,000 of assessed value, followed by Benton County at $54.13 per $1,000 and Jefferson County at $52.55 per $1,000. Randolph County was home to the lowest property tax rate in the state at $40.13 per $1,000 of assessed value, slightly below Scott County at $41.17 per $1,000 and Stone County at $41.42 per $1,000.

How Arkansas Compares to the Nation and to Nearby States

To compare states with vastly different tax systems, it helps to focus on property tax rates paid by typical homeowners. In Arkansas, owner-occupants paid an average effective tax rate of just 0.62% on the market value of their homes. This is the 10th-lowest rate in the nation and just more than half the national average rate of 1.19%. The state's generous homestead tax credit, introduced in 2000, is an important factor in Arkansas' low tax rate for homeowners.

Most of Arkansas' neighboring states have higher tax rates. Texas has the highest average rate for owner-occupied property in the region at 1.9%, followed by Missouri at 1.02%, Oklahoma at 0.86%, Mississippi at 0.8% and Tennessee at 0.75%. At 0.51%, Louisiana is the only state in the region with a lower average rate than Arkansas.

Delaware Property Tax Guide

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