The Complete Arkansas Airbnb Host Lodging Tax Guide: Airbnb Arkansas Occupancy Tax Breakdown

If you’re considering becoming an Airbnb host in Arkansas, understanding the lodging and occupancy taxes is essential for compliance and maximizing your profitability. Arkansas imposes a series of taxes on short-term rentals (STRs), including state and local sales taxes, tourism taxes, and occupancy taxes. This guide breaks down these taxes and provides examples to help you navigate the system.

State-Wide Tax Requirements for Arkansas Airbnb Hosts

There are a handful of state-wide taxes that Arkansas hosts need to know. If you run an Airbnb rental or short-term rental business in Arkansas, you are subject to the following state-level taxes:

• State Sales Tax: 6.5% on the rental fee, cleaning fees, and other mandatory charges
• Short-Term Rental Tax: 1% on gross receipts from rental of tangible personal property
• State Tourism Tax: 2% to support Arkansas tourism initiatives

This creates a combined state tax rate of 9.5% that applies to all short-term rentals throughout Arkansas.

Example (State Taxes Only):

1. Nightly Rate: $100
2. Cleaning Fee: $50
3. Subtotal: $150
4. State Sales Tax (6.5%): $9.75
5. Short-Term Rental Tax (1%): $1.50
6. State Tourism Tax (2%): $3.00
7. Total State Taxes: $14.25
8. Guest Total: $164.25

City-Specific Tax Requirements

Aside from the 9.5% in taxes that all Arkansas hosts must comply with, there are also a handful of cities that also impose their own additional taxes. If your rental is located within one of these cities, you are also subject to their taxes, aside from the 9.5% that’s applicable to all hosts in Arkansas.

Little Rock

Hosts in Little Rock are subject to a City Hotel Tax, which is a 4% on gross receipts from stays less than 30 days. This is in addition to the 9.5% state taxes, bringing the total tax rate to 13.5% for Little Rock Airbnb hosts.

Example:

1. Nightly Rate: $120
2. Cleaning Fee: $60
3. Subtotal: $180
4. State Taxes (9.5% combined): $17.10
5. Little Rock Hotel Tax (4%): $7.20
6. Total Taxes: $24.30
7. Guest Total: $204.30

Hot Springs

Hot Springs was actually the first Arkansas city to reach a tax agreement with Airbnb, which began back in June of 2017. Hosts within the city are subject to a City Lodging Tax of 3% on booking receipts. This brings the total tax rate for Hot Springs hosts to 12.5% (9.5% state + 3% local).

Example:

1. Nightly Rate: $150
2. Cleaning Fee: $75
3. Subtotal: $225
4. State Taxes (9.5% combined): $21.38
5. Hot Springs Lodging Tax (3%): $6.75
6. Total Taxes: $28.13
7. Guest Total: $253.13

Fayetteville

Fayetteville is hands-down one of the most popular Airbnb destinations in Arkansas. The local government saw this as a huge opportunity and applied a Hotel, Motel, Restaurant (HMR) Tax on all accommodations, that also applies to short-term rentals. This brings the total tax rate to 11.5% for Fayetteville hosts (9.5% state + 2% local).

Example:

1. Nightly Rate: $130
2. Cleaning Fee: $65
3. Subtotal: $195
4. State Taxes (9.5% combined): $18.53
5. Fayetteville HMR Tax (2%): $3.90
6. Total Taxes: $22.43
7. Guest Total: $217.43

Bentonville

Bentonville imposes a 2% advertising and promotion tax, often referred to as a “lodging tax,” on short-term rental stays. Bentonville County also imposes a 1% sales tax that brings the total tax for Bentonville hosts to about 12.5%.

Example:

1. Rental Fee: $100
2. State Sales Tax (6.5%): $6.50
3. Short-Term Rental Tax (1%): $1.00
4. State Tourism Tax (2%): $2.00
5. Benton County Sales Tax (1%): $1.00
6. Bentonville Lodging Tax (2%): $2.00
7. Total Tax: $12.50
8. Total Charge to Guest: $112.50

North Little Rock

Similar to Little Rock, North Little Rock also has its own set of taxes. Instead of a City Hotel Tax, North Little Rock has a 3.5% Advertising & Promotion tax on gross receipts for lodging businesses. This brings the total to 12.5%.

Example:

1. Rental Fee: $100
2. State Sales Tax (6.5%): $6.50
3. Short-Term Rental Tax (1%): $1.00
4. State Tourism Tax (2%): $2.00
5. North Little Rock A&P Tax (3.5%): $3.50
6. Total Tax: $13.00
7. Total Charge to Guest: $113.00

Springdale

Springdale has a 2% lodging tax that applies to short-term rentals and hotels. The total taxes that Springdale hosts need to pay comes up to 11.5%

Example:

1. Rental Fee: $100
2. State Sales Tax (6.5%): $6.50
3. Short-Term Rental Tax (1%): $1.00
4. State Tourism Tax (2%): $2.00
5. Springdale Lodging Tax (2%): $2.00
6. Total Tax: $11.50
7. Total Charge to Guest: $111.50

Wrapping Things Up

Understanding and complying with Arkansas’s lodging and occupancy tax requirements is essential for running a legitimate and profitable short-term rental business. While the tax landscape may seem complex, it’s still a necessary requirement for all Airbnb hosts.

If you’re eager to learn more about Arkansas Airbnb taxes, be sure to visit the official website of the Department of Finance & Administration in Arkansas. As always, we highly recommend contacting your local authorities before becoming an official Airbnb host.