If you’re researching the estate tax in Arkansas, here’s the simple answer: there isn’t one (although there is an inheritance tax). The state fully repealed its estate tax more than a decade ago, and that’s good news for residents planning how to transfer assets to loved ones.
But why doesn’t the state have one—and does that mean you can ignore taxes altogether? Let’s unpack it.
Arkansas once had an estate tax. But like many other states, it chose to eliminate it. The repeal happened gradually after changes at the federal level. Here’s how:
Until 2005, Arkansas levied a “pick-up” tax. This tax was tied directly to a federal credit that allowed states to collect a portion of federal estate tax revenue. When Congress repealed that credit, Arkansas’s estate tax disappeared with it.
Unlike some states that replaced the pick-up tax with their own standalone versions, Arkansas did not. That decision effectively ended the estate tax in the state.
What Does No Estate Tax in Arkansas Mean for You?
There’s no estate tax in Arkansas. That’s because the state’s estate tax phased out when the federal credit was repealed in 2005. Today, residents only need to consider the federal estate tax—if their estate exceeds federal exemption limits.
Does That Mean No Taxes at All?
Not quite. While there’s no state estate tax, large estates may still owe federal estate taxes. As of 2025, the federal estate tax exemption is $13.61 million per individual. That means estates below that amount typically won’t owe federal estate tax either.
However, this exemption amount is set to decrease in 2026, potentially subjecting more estates to the federal tax. That’s why it’s still important to keep an eye on the rules—even if you live in a state like Arkansas.
What About Inheritance Tax?
Another piece of good news: Arkansas does not have an inheritance tax either. And if you inherit property or assets in Arkansas, you won’t owe state taxes on that inheritance.
Why the Lack of Estate Tax Matters
For many Arkansas residents, the lack of an estate tax simplifies estate planning. It means more assets can be passed on to heirs without being reduced by state-level taxes. Still, having a plan in place to organize and distribute your estate remains essential—especially if you own property, operate a business, or have a high-value estate.
(Read More: Learn about revocable trusts in Arkansas versus Nevada.)
