Educational information only, not tax advice. Rules and figures change — confirm your situation with a qualified Arkansas tax professional before filing.
Arkansas · USA · Short-term rental taxes
Short-Term Rental Taxes in Arkansas
Short term rental taxes in Arkansas mean 6.5% state sales tax, a 2% tourism tax, local sales tax and city A&P taxes on stays, plus state income tax that tops out at 3.7% for 2026.
The 30-Second Answer
- Short term rental taxes in Arkansas begin with 8.5% at state level on stays of 29 nights or fewer: the 6.5% gross receipts (sales) tax plus the 2% tourism tax on accommodations.
- Local sales tax (Airbnb cites 0.5–3.5%) and, in many cities, an advertising and promotion (A&P) tax of 2–4% are added — for example 4% in Little Rock, 3% in Hot Springs and Eureka Springs, 2% in Bentonville and Fayetteville.
- Airbnb and Vrbo collect the state gross receipts, local sales and tourism taxes and the A&P taxes of the cities they list. If you take direct bookings, you need a DFA sales tax permit and file the monthly report by the 20th, plus any city A&P return.
- Arkansas taxes net rental profit at a top rate of 3.7% for 2026 (cut from 3.9% by Acts 1 and 2 of the 2026 special session). File AR1000F (residents) or AR1000NR (nonresidents) by April 15, 2027 — and note Arkansas does not follow federal bonus depreciation.
Deductions
What Arkansas STR Hosts Can Deduct
Running costs of the rental reduce the profit taxed federally and at up to 3.7% in Arkansas — but Arkansas depreciation can differ from the federal figure.
Sales, tourism and A&P taxes you collect from guests are held for the state and city and are not rental income. If you use the cabin yourself, allocate costs between rental and personal days under IRC §280A.
Filing Calendar
Key Dates & Filing Calendar
Direct-booking hosts file sales and tourism tax monthly with DFA; income tax follows the federal April deadline.
When the 20th lands on a weekend or holiday, DFA's published calendar moves the monthly sales tax report to the next business day — its 2026 due dates run from the 20th to the 22nd.
Arkansas Department of Finance and Administration — Sales & Use Tax Due Dates; 2025 AR1000F/AR1000NR instructions
Income Tax Treatment
Schedule E or Schedule C for an Arkansas STR?
Arkansas starts from your federal rental figures, so the Schedule E vs. Schedule C question drives both returns — with a 3.7% top state rate for 2026.
Passive rental — Schedule E
The normal route for Ozark cabins and lake homes
- Report rent and expenses on Schedule E; the net figure goes on AR1000F or AR1000NR.
- No self-employment tax on net rental income.
- Building depreciation over 27.5 years; keep a separate Arkansas depreciation schedule because the state does not follow bonus depreciation.
- Losses are usually passive; the $25,000 allowance phases out between $100,000 and $150,000 of AGI.
No income ceiling; passive loss limits apply
Active business — Schedule C
Only for hotel-like service levels
- Applies when the average stay is 7 days or less and you provide substantial services.
- Adds self-employment tax of 15.3% on profit up to the 2026 wage base of $184,500.
- The federal QBI deduction (Section 199A) may reduce federal tax.
- Arkansas still taxes the profit at no more than 3.7% for 2026.
No income ceiling; SE tax on profit up to $184,500 (2026)
Depreciation
Depreciation for Arkansas STR Properties
Depreciation is usually the biggest non-cash deduction for a rental — in Arkansas you may need two schedules, one federal and one state.
| Asset | Typical write-off period | Notes |
|---|---|---|
| Residential rental building | 27.5 years (straight-line) | Exclude the land value — wooded acreage around a cabin can be a large share of the price. |
| Furniture, appliances & hot tub | 5 years (MACRS) | 100% federal bonus depreciation if acquired after January 19, 2025; Arkansas requires regular depreciation instead. |
| Decks, driveways, fencing & landscaping | 15 years (MACRS) | Land improvements; also bonus-eligible federally but not for Arkansas. |
| Roof, HVAC or major renovation | 27.5 years | Improvements to the building are capitalised; ordinary repairs are deducted when paid. |
Because Arkansas did not adopt federal bonus depreciation, differences are reported on Form AR1000D. A cost segregation study speeds up federal deductions but widens the federal–Arkansas gap.
When you sell, federal tax recaptures prior depreciation at up to 25% (unrecaptured Section 1250 gain). Your Arkansas gain is based on your Arkansas depreciation, which may differ from the federal amount.
Lodging Tax
Arkansas Sales, Tourism & A&P Taxes on Short Stays
Arkansas taxes lodging through its sales tax plus a dedicated tourism tax, with local sales tax and city A&P occupancy taxes stacked on top.
DFA administers the 6.5% state sales tax, the 2% tourism tax and local sales taxes on one return. A&P taxes are city levies. The bars use Little Rock's A&P rate as the city example.
8.5% state plus local sales tax and any city A&P tax — up to about 16% where the highest local rates stack
Arkansas DFA — State Sales & Use Tax Rates; Ark. Code § 26-63-402 (tourism tax); Airbnb Help Center article 2296; Vrbo Help (US A–E)
| Booking type | Who collects & remits | What it means for your books |
|---|---|---|
| Airbnb booking | Airbnb collects 6.5% state, 2% tourism, local sales tax and listed-city A&P taxes on stays of 29 nights or fewer | Taxes pass through Airbnb; keep its tax reports to show they were remitted |
| Vrbo or Booking.com booking | Vrbo collects state gross receipts, local sales and tourism tax (since August 1, 2019) and A&P tax in cities it lists; confirm other channels | Where a channel does not collect, the tax is yours to file |
| Direct booking | You hold a DFA sales tax permit, charge the guest and file by the 20th, plus your city's A&P return | Invoice taxes separately and keep them out of your rental income |
A&P rates in Airbnb's Arkansas list run from 2% (Bentonville, Bella Vista, Springdale, Fayetteville) to 4% (Little Rock). Arkansas also has a 1% short-term rental tax, but it covers rentals of tangible personal property such as equipment, not lodging subject to the tourism tax.
Platforms
Airbnb Tax in Arkansas: What Platforms Collect
The tourism tax statute names accommodations intermediaries, and both Airbnb and Vrbo now collect Arkansas lodging taxes — the IRS reporting is separate.
| Platform | Reports your income | Collects the local lodging tax | Annual earnings summary |
|---|---|---|---|
| Airbnb | Form 1099-K when 2026 payouts exceed $20,000 and 200 transactions | Yes — 6.5% gross receipts, 2% tourism, local sales tax and A&P taxes in listed cities | Earnings and tax reports in the host dashboard; tax forms by January 31 |
| Vrbo | Form 1099-K above the same federal thresholds | Yes — state gross receipts, local sales and tourism tax; A&P in cities it lists (stays under 30 nights) | Annual payout summary in the owner dashboard |
| Booking.com / other OTAs | Form 1099-K above the federal thresholds | Check the listing — if the channel does not remit, you must | Partner-portal statements |
| Direct bookings | No platform reporting | No — file with DFA and your city yourself | Your own booking ledger |
Listing on Several Platforms?
Platforms remit only on their own reservations. A returning guest who books your Beaver Lake cabin direct triggers state, local and A&P tax that you must file. Check each 1099-K against your own total, since the reporting threshold is applied platform by platform.
US Reporting: Form 1099-K, Not DAC7
DAC7 is an EU rule and has no effect on Arkansas rentals. US platforms file Form 1099-K once payouts exceed $20,000 and 200 transactions in a calendar year; Form 1099-MISC/NEC uses a $2,000 threshold for payments after December 31, 2025. Every dollar of rent is reportable with or without a form.
Airbnb Help Center — Arkansas (airbnb.com/help/article/2296); Vrbo Help — where Vrbo collects and remits taxes (US A–E)
Illustrative P&L — Eureka Springs Cabin
Example for an Ozarks cabin grossing $36,000 a year; sales, tourism and A&P taxes are excluded. For illustration only — not tax advice.
Record-Keeping
Stay Audit-Ready: What to Keep and How Long
Keep records that support your federal and Arkansas returns and any direct-booking sales or A&P filings.
| Keep | How long | Why |
|---|---|---|
| Booking calendar with dates, rates and channel | At least 3 years after filing | Separates rental from personal days and ties to sales tax reports |
| Platform tax reports and 1099-K forms | At least 3 years after filing | Shows which stays the platforms taxed and matches IRS copies |
| DFA sales tax reports and city A&P returns | At least 3 years after filing | Evidence that direct-booking taxes were filed on time |
| Expense receipts and invoices | At least 3 years after filing (6 if income is understated by more than 25%) | Substantiates deductions on Schedule E or C |
| Federal and Arkansas (AR1000D) depreciation schedules | Until 3 years after you sell | Needed to compute basis and gain on both returns |
Keep your federal and Arkansas depreciation schedules side by side — because Arkansas does not follow bonus depreciation, the two diverge and must be reconciled again when you sell.
Estimator
Short-Term Rental Tax Estimator
Plug in your bookings and costs to see your likely taxable position.
Your Numbers
Total short-term-rental income, before costs.
Allowable running costs, mortgage interest, depreciation and platform fees.
Your top income-tax band, as a percentage.
Estimated tax owed
Income tax on your net rental profit at your marginal rate.
Illustrative estimate. A simplified model to orient you — it is not tax advice. Confirm your situation with a qualified local professional.
Sources & notes
Educational summary only. City A&P and local sales tax rates change — confirm current rates with the Arkansas DFA and your city before filing.
- Arkansas DFA — State Sales & Use Tax Rates — State sales and use tax 6.5%, parks and tourism tax 2%, short-term rental tax 1%. https://www.dfa.arkansas.gov/excise-tax/sales-and-use-tax/state-tax-rates/
- Ark. Code § 26-63-402 — Tourism tax — 2% tax on furnishing rental houses, condominiums and rooms to transient guests, including by accommodations intermediaries. https://law.justia.com/codes/arkansas/title-26/subtitle-5/chapter-63/subchapter-4/section-26-63-402/
- Code of Arkansas Rules 26 CAR § 30-501 — Lodging — Gross receipts tax on accommodations to transient guests; month-to-month exemption conditions. https://codeofarrules.arkansas.gov/Rules/Rule?levelType=section&titleID=26&chapterID=33&subChapterID=241&partID=971&subPartID=9363§ionID=62965
- Arkansas DFA — Sales & Use Tax Due Dates — Monthly report due around the 20th of the following month. https://www.dfa.arkansas.gov/office/taxes/excise-tax-administration/sales-use-tax/due-dates/
- Arkansas House — Tax cuts passed in special session (May 2026) — Top individual rate 3.7% from January 1, 2026 (Acts 1 and 2). https://www.arkansashouse.org/news/post/35262/tax-cuts-passed-in-special-session/
- Arkansas DFA — 2025 AR1000F and AR1000NR instructions — April 15 due date, nonresident filing, Schedule E income, no bonus depreciation (AR1000D). https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_and_AR1000NR_Instructions.pdf
- Airbnb Help Center — Occupancy tax collection in Arkansas — Taxes Airbnb collects, including city A&P rates. https://www.airbnb.com/help/article/2296
- Vrbo Help — Where Vrbo collects and remits taxes (US A–E) — Arkansas state and local taxes collected since August 1, 2019. https://help.vrbo.com/articles/vrbo-stay-taxes-lodging-taxes-united-states-a-e
- IRS — Publication 527, Residential Rental Property — Schedule E reporting, depreciation and personal-use rules. https://www.irs.gov/publications/p527
Questions
Frequently Asked Questions — Arkansas STR Taxes
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