Updated October 4, 2026. Quick answer: Yes, but only half of a long-term gain is taxed. Form AR1000D says “If a gain multiply line 7b by 50 percent (.50)”, and the Department of Finance and Administration prints “Marginal Income Tax rates for 2025 are 3.9%, as amended in 2024.” Short-term gain is taxed in full.
Selling your home? How the state taxes the profit, from its own tax documents: Does Arkansas tax the profit from selling your home?.
The same question for dividends and interest: does Arkansas tax dividends and interest.
How Arkansas treats capital gains
| Item | What the documents say |
|---|---|
| Treatment | Net long-term gain: line 7b multiplied by 50 percent (.50), the result taxed at the regular graduated rates; short-term gain is added in full |
| 2025 rates | 0.00% up to $5,599; 2.00% from $5,600; 3.00% from $11,200; 3.40% from $16,000; 3.90% from $26,400 (indexed bracket table) |
| Cap on the entry | “only enter $10,000,000.” |
| Where it is written | 2025 Form AR1000D and the 2025 AR1000F instructions; the statute itself was not retrievable from a state host |
A $50,000 long-term gain
On a $50,000 long-term gain, half is taxed: computed as $50,000 x 50% = $25,000 of taxable gain.
Taxed wholly at the lowest printed rate above zero, 2.00%, that is computed as $25,000 x 2.00% = $500; taxed wholly at the top rate, 3.9%, computed as $25,000 x 3.9% = $975. Your bracket decides.
What changes in 2026
The Department’s fiscal impact statement for SB1 of the 2026 first extraordinary session describes a bill to “reduce the top individual income tax rate in Arkansas to 3.7%”. The statement describes the bill and does not say it was enacted, so no 2026 rate is stated here.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on gains in Topic no. 409, Capital Gains and Losses and Publication 550, Investment Income and Expenses.
Related: whether Arkansas taxes pensions, how Arkansas taxes retirement income, the capital gains tax by state table, and the federal capital gains tax calculator.
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Answer againSources
- 2025 Form AR1000D Capital Gains and Losses: https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000D_CapitalGains.pdf
- 2025 AR1000F and AR1000NR Instructions: https://www.dfa.arkansas.gov/wp-content/uploads/2025_AR1000F_and_AR1000NR_Instructions.pdf
- State of Arkansas Indexed Tax Brackets, Tax Year 2025: https://www.dfa.arkansas.gov/wp-content/uploads/2025_TaxBrackets.pdf
- Fiscal Impact Statement, SB1 (2026 first extraordinary session), 4/30/2026: https://arkleg.state.ar.us/Home/FTPDocument?path=%2FAssembly%2F2025%2F2026S1%2FFiscal+Impacts%2FSB1-DFA1.pdf
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.