Selling a business in Arkansas: what the state takes (2026)
Arkansas’s top individual income tax rate is 3.7%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 3.7%
- Top Arkansas income tax rate (2026)
- $185,000
- State tax on a $25M long-term gain
- 24.5%
- Combined federal and state rate on $25M
- 42 of 51
- Rank by total tax on $25M (1 = highest)
How Arkansas taxes a business sale
- Income tax
- Top rate 3.7%: 3.7% on income over about $4,600 for filers above the $94,700 high-income table threshold (2026); retroactive to Jan 1, 2026.
- Long-term capital gains
- Net capital gain above $10,000,000 in a tax year is exempt (Act 1488 of 2013, for gains realized on or after Jan 1, 2014). Only 50% of the first $10,000,000 of net long-term gain is taxed. Apply the $10M cap first, then the 50% exclusion: AR1000D line 7b caps net gain at $10M and line 8 multiplies by 0.50. At most $5M of gain is taxable, so state tax tops out at about $185,000 (3.7% of $5M) however large the gain.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Arkansas tax | $185,000 | $185,000 | $185,000 |
| Total tax | $2,565,000 | $6,135,000 | $12,085,000 |
| Effective combined rate | 25.65% | 24.54% | 24.17% |
| Net proceeds after tax | $7,435,000 | $18,865,000 | $37,915,000 |
| Extra tax versus Texas | $185,000 | $185,000 | $185,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Arkansas tax
- $185,000
- Gain exempt above state cap
- $15,000,000
- Gain excluded or deducted
- $5,000,000
- Taxable gain at 3.7%
- $185,000
- Total tax
- $6,135,000
- Effective rate on the gain
- 24.54%
- Net proceeds after tax
- $18,865,000
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Neighboring states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
Methodology and sources
Arkansas figures are for tax year 2026. Act 1 (HB1001) and Act 2 (SB1) of the 2026 First Extraordinary Session, signed May 6, 2026, cut the top rate from 3.9% to 3.7% retroactive to January 1, 2026. Capital gain rules are from the DFA 2025 AR1000D (R 4/25/2025). The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1Arkansas House: Tax cuts passed in special session (Acts 1 and 2, top rate 3.7% from Jan 1, 2026)
- 2Arkansas DFA 2025 AR1000D capital gains form ($10M cap, 50% taxable)
- 3Thomson Reuters: Arkansas cuts individual and corporate income tax rates ($94,700 threshold). Secondary source
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Arkansas,” 2026, https://laurent.capital/research/seller-tax-map/arkansasLink (HTML)
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