Arkansas
Arkansas taxes both residential and commercial cleaning, under a sales tax the state administers as its gross receipts tax, and a 2018 Department of Finance and Administration opinion says these services are generally taxable regardless of the type of customer. Cleaning streets, sidewalks, driveways, or other areas that aren't part of a building is generally not taxable. Wages are subject to state income tax withholding, and for unemployment insurance a 2016 court decision quotes an ABC test from the statute.
In Arkansas the type of customer generally doesn't change the sales tax answer: cleaning is taxable for homes and businesses alike. The tax is a sales tax that the state administers as the Arkansas gross receipts tax, so you may see either name. Below I cover sales tax, how the state sorts employees from contractors, payroll registration, the minimum wage, and what each one means for your books.
Residential cleaning is taxable in Arkansas, and so is commercial cleaning. The statutory basis is Ark. Code Ann. 26-52-301(3)(D)(i)(b), which covers cleaning and janitorial work, along with Gross Receipts Tax Rule GR-9.4. There are edges, such as cleaning areas that aren't part of a building, and I cover them on my page on Arkansas sales tax for cleaning services.
For unemployment insurance, Arkansas uses an ABC test, a three-part exemption test. The Arkansas Court of Appeals quoted it from Ark. Code Ann. 11-10-210(e) in Jack Rabbit Services, LLC v. Director, 2016 Ark. App. 410 (September 14, 2016), and the current codified text wasn't read for this page. The Division of Workforce Services employer handbook cites Ark. Code Ann. 11-10-208 through 11-10-210 together; which of those sections holds the contractor test wasn't confirmed here. How employees and subcontractors each show up in the books is in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question, and it belongs with your CPA or an employment attorney.
Source: Arkansas Division of Workforce Services, Employer Handbook
Arkansas taxes wages, so employers withhold state income tax. That side belongs to the Arkansas Department of Finance and Administration's Withholding Tax Section, and its registration runs through atap.arkansas.gov. Unemployment insurance is a separate account with the Arkansas Division of Workforce Services, which has its own employer registration page.
Source: Arkansas Division of Workforce Services, employer unemployment insurance registration
Source: Arkansas Division of Workforce Services, Employer UI Contributions
The U.S. Department of Labor's state table, updated July 1, 2026, lists the Arkansas minimum wage at $11.00 an hour for employers with 4 or more employees. That rate wasn't confirmed from an Arkansas source as of October 20, 2026. The department's history table shows January 1 values only, with $10.00 in 2020 and $11.00 in 2021, so $11.00 was in effect by January 1, 2021; the exact statutory effective date wasn't confirmed. No change has been announced as of October 20, 2026, going by the Arkansas Division of Labor's minimum wage page.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
Source: Arkansas Division of Labor, Minimum Wage and Overtime
Since residential and commercial cleaning are both taxable, the sales tax you collect is money you're holding, not money you earned. Bookkeeping here isn't just recording deposits. It's splitting each deposit into what you earned and what you collected, it's holding the collected tax in a liability account apart from income, and it's flagging the jobs the rules treat on their own terms, like a driveway, a parking lot, or gutters. Labor gets booked at the wage you actually pay, and my payroll page covers how I keep it straight.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the collected tax and the job detail organized; whether a given job is taxable, and how the tax is reported, is a question for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Arkansas and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Arkansas taxes residential and commercial cleaning alike, so the books split every deposit into income and collected sales tax, with the tax held in a liability account. Driveway, parking lot, and gutter jobs get flagged on lines of their own, and payroll is recorded at the wage actually paid. Book a short call below and we'll look at how your deposits are recorded today.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If your Arkansas deposits land in one income line with the sales tax still inside them, send me a note. We'll pull them apart together, and the first conversation doesn't cost anything.
