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The State of Arkansas does not have a property tax. However, Arkansas cities and counties do collect property tax, which is the principle local source of revenue for funding public schools. The tax is calculated based on 20% of the market value of real and personal property and the average annual value of merchants' stocks and/or manufacturers' inventories based on millage rates in individual school districts. Business firms and individuals are subject to annual property tax on all real and personal property.

Payment in Lieu of Property Taxes (PILOT)

Real and personal property financed by revenue bonds and general obligation bonds may be exempt from property taxes during the lease-amortization period
in which a local government retains title to a property. Payments by businesses to local governments in lieu of property taxes are generally encouraged and negotiated between the locality and the company.

The negotiated PILOT shall not be less than 35% of the property taxes that would have been paid if the property were on the tax rolls, unless a lesser amount is approved by the Executive Director of the Arkansas Economic Development Commission and the Chief Fiscal Officer of the State of Arkansas.