How the Texarkana, Arkansas border city exemption works.

Since this Arkansas income tax provision is so misunderstood here is how it works. If your residence is inside the city limits of Texarkana, Ar you are exempt from Arkansas income tax regardless of where you work. If you live inside the city limts of Texarkana, Tx you must work inside the city limits of Texarkana, Ar to be exempt from Arkansas income tax. Everybody else who has Arkansas income is subject to the Arkansas income tax. You must file an Arkansas income tax return if you have Arkansas income to claim the border city exemption. The State of Arkansas is actively looking for taxpayers who either didn't file when required or claimed the border city exemption in error. Every year I represent numerous taxpayers who have these issues and I can help you resolve them.

Robby