Yes, it appears you must file the Arkansas (AR) tax return. Filing the return will show the income is reduced by your expenses, however they require based on gross rents.
Who must file an Arkansas tax return?
Anyone earning income in Arkansas may need to file a state income tax return. Filing requirements depend on your gross income, filing status, and residency status. Gross income includes all earnings before deductions, such as wages, tips, rental income, and other sources.
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