Is Your State Tax-Friendly? It’s Not A Simple Yes or No

By
Real Estate Agent with Keller Williams Market Pro Realty

Everyone asks me about taxes here in NW Arkansas compared to where they are moving from. It’s a hard question to answer, since it depends on where the person is moving from. I recently came across an article on the Internet that said Arkansas ranked in the middle of most-to-least tax-friendly states. According to this article, an Arkansasan’s tax burden is 10.3% of his/her per capita income, which makes Arkansas #27 on the list.

 

For property taxes, the rule of thumb that we realtors(r) use in Washington and Benton Counties, is that property taxes are slightly less than 1% of the purchase price of the home. In addition, there is a $300 per year homestead credit for one's personal residence.

 

In addition, homeowners in Arkansas have who are at least 65 years age qualify to have their appraised evaluation capped. This provision helps senior citizens remain in their homes instead of being taxed out of them as evaluations increase. And still another good point to note about Arkansas: it is heir-friendly. There is no estate tax in Arkansas. 

The bottom line is that all political entities need revenue to provide services and that money must come from the people. All in all, I think Arkansas is very tax friendly.

For more information:

 

Washington and Benton County Millage rates (for local property taxes):

http://www.co.benton.ar.us/Administration/BCCollect/index.htm

http://www.co.washington.ar.us (click on information and then on Millage rates)

 

General information about Arkansas taxes

:

http://money.cnn.com/2006/04/10/pf/taxes/taxfriendly_states_2006/index.htm

http://www.bankrate.com/brm/itax/news/20051107a1.asp?caret=21

http://www.bankrate.com/brm/itax/state/state_tax_home.asp

http://www.bankrate.com/brm/itax/news/20051107b1.asp

http://www.retirementliving.com/RLtaxes.html

http://www.keepmedia.com/pubs/KiplingersRetirementReport/2002/07/01/129139?extID=10032&oliID=213

http://www.keepmedia.com/pubs/KiplingersRetirementReport/2001/03/01/128658?ba=a&bi=0&bp=97

http://www.taxadmin.org/fta/rate/tax_stru.html

http://www.forbes.com/free_forbes/2004/0315/171sidebar.html

 
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Anonymous
Anonymous

Interesting, I checked the same chart you referanced and Texas is rated at # 44 with an overall tax burden of 9.4%. However our main isssue with folks relocating to the state is our property taxes. The taxes are high as they are the tool by which the school districts collect their monies to support education in the state. To make matters worse we have what we call a Robin Hood system. The rich school districts are caped at a certain rate per student. Anything else collected in that district is given to the poorer school districts that can't collect enough money to meet that cap.

Now once we point to relocating buyers that there is no state income tax they understand that offsets the property tax. Also last spring the state legislature at the prompting of the state supreme court identified other wasy to collect taxes for the schools in order to give property owners some relief. Smart move as this also helps out of state investors. So starting this year (2007) and next (2008) the property taxes will be reduced by 15% each year. Of course once property values are reavaluated all that gain will be absorbed.

~ Danny

Jan 21, 2007 02:25 AM #1
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Judy Luna

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