Arkansas Franchise Tax: Everything You Need To Know
Registering for and filing the Arkansas franchise tax is an essential statutory requirement for businesses operating in the state. This franchise tax report also serves as the Arkansas annual report, meaning businesses are only required to submit one filing to meet both requirements.
This annual filing keeps your business in good standing, allowing you to continue operations without disruptions. Whether you run a corporation, LLC, or other entity, timely filing is crucial to avoid penalties and potential legal complications.
This guide will provide a comprehensive breakdown of the Arkansas franchise tax, covering everything from the filing process to exemptions and deadlines. You'll also learn how Harbor Compliance can simplify the entire process—ensuring that your business meets all tax obligations in Arkansas and other states.
What Is Arkansas Franchise Tax?
The Arkansas franchise tax is an annual obligation imposed on businesses registered in the state, ensuring they remain in good legal standing. Established under the Arkansas Corporate Franchise Tax Act of 1979, it applies to corporations, LLCs, and other entities. The tax supports state services and oversight of business operations.
The deadline for filing this annual report varies depending on your entity type. Most entities, such as corporations, Limited Liability Companies (LLCs), and insurance companies, must file by May 1 of each year, while Limited Liability Partnerships (LLPs) must submit reports by April 1.
Nonprofit corporations must file an annual report with the state no later than August 1. However, they are exempt from paying the filing fee.
Who Is Required To Pay the Arkansas Franchise Tax?
The Arkansas franchise tax applies to most businesses registered in the state, including:
- Corporations (with or without stock)
- Limited Liability Companies (LLCs)
- Banks and financial institutions
- Insurance companies
Certain entities are exempt from this tax, including nonprofit organizations that are not subject to federal income tax and organizations formed under the Uniform Partnership Act. However, they are still required to file an annual report.
How Is the Arkansas Franchise Tax Calculated?
The Arkansas franchise tax is calculated based on the type of business entity. You can refer to the table below for a breakdown of the criteria the state uses to determine the amount payable by different types of organizations:
| Entity Type | Tax Calculation |
|---|---|
| Corporations with stock, including Professional Corporations and Benefit Corporations | The franchise tax is computed based on the total outstanding capital stock, with the minimum tax set at $150. |
| Corporations without stock, including Professional Corporations and Benefit Corporations | These entities pay a flat annual tax of $300. |
| Banks | The tax is calculated based on the percentage of the bank’s property in Arkansas compared to its total property. This percentage is applied to the bank’s total outstanding capital stock, and the result is taxed at a rate of 0.003%. If the calculated tax is below $150, the minimum payable amount is $150. |
| LLCs and Professional LLCs | LLCs pay a flat annual tax of $150. |
| Insurance companies |
The tax varies depending on the outstanding capital stock:
|
| Limited Liability Partnerships | $15 |
| Limited Liability Limited Partnerships | $15 |
| Cooperative Corporation | Fees vary depending on the type of cooperative. |
How To File and Pay the Arkansas Franchise Tax
You can file and pay the Arkansas franchise tax using two methods:
- Online filing and payment
- Mail or in-person filing
Online Filing and Payment
To file and pay the Arkansas franchise tax online, follow these steps:
- Visit the Arkansas secretary of state’s franchise tax page.
- Enter your file number and federal tax ID number.
- Click Show Available Filings to review your filing options.
- Complete the required forms by following the on-screen instructions.
- Make the payment using a credit card.
Once the payment is submitted online, the processing is generally immediate, and you will receive a confirmation email upon successful completion.
Mail or In-Person Filing
To file and pay the Arkansas franchise tax by mail or in person, follow these steps:
- Download the required forms from the Arkansas secretary of state’s website.
- Complete the form, ensuring all required fields are filled in.
- Attach a check or money order for the appropriate amount.
- Mail the completed form and payment to the Business and Commercial Services office or deliver it in person to their office in Little Rock or Fayetteville.
Arkansas Franchise Tax Registration Process
Once a business is registered with the Arkansas secretary of state, it is automatically subject to the state's franchise tax. However, staying in good standing requires ongoing management of filings and payments. Here are the key elements involved:
- Annual tax filings—Although businesses are automatically registered for franchise tax upon incorporation, they must file an annual franchise tax report and make the required payment to remain compliant with state regulations.
- Additional filings—In certain circumstances, businesses may need to file extra documents, such as amendments or foreign qualification applications, especially if they expand operations or change their legal status.
While some individuals opt for a do-it-yourself approach when managing their Arkansas tax obligations, it can sometimes result in missed deadlines or incomplete filings—especially when you have to review and track multiple forms across different state agencies.
If separate filings are required or if you're unsure about your business’s tax obligations, consider appointing a reliable service provider and outsourcing these tasks to professionals. Need a recommendation? Look no further than Harbor Compliance.
Oversee Your Arkansas Franchise Tax/Annual Report With Harbor Compliance’s Entity Manager
Harbor Compliance’s proprietary Software Suite streamlines organizational tasks such as maintaining corporate records, managing tax filings, and tracking licenses and permits. Entity Manager, one of the Suite’s modules, integrates directly with secretary of state databases to simplify compliance management.
With our Entity Manager module, you can enjoy several key benefits:
- Consolidated view of your entity—This tool provides a comprehensive overview of your entity’s records in its state of operation. It includes crucial details, such as registration numbers, compliance status, and other publicly available information.
- Multistate support—Entity Manager provides unparalleled convenience for organizations operating in multiple jurisdictions. You can view and manage all your entities from a single dashboard.
- Tracking annual report deadlines—Entity Manager leverages Compliance Core, offering precise and up-to-date tracking of annual report due dates. This eliminates the need for manual tracking systems like spreadsheets.
Additionally, Harbor Compliance provides hands-on support by filing annual reports on your entity’s behalf. With this service, you can rest assured that your filings will be submitted accurately and on time, allowing you to focus on running your business.
Ordering Entity Management Software
Getting started with Harbor Compliance’s Entity Manager couldn’t be easier—all you have to do is:
- Visit our Entity Manager page.
- Click the Schedule a Demo tab.
- Choose the date and time and enter your information.
Additional Services by Harbor Compliance
Besides helping with Arkansas franchise tax obligations, Harbor Compliance offers various additional services to support your business at every stage of its journey. Refer to the table below for more details on our key services:
| Service Category | Services |
|---|---|
| Industry-specific licenses | |
| Nonprofit formation | |
| Lifecycle support | |
| Document filing and retrieval | |
| Beneficial Ownership Reporting | |
| Tax-related services |
FAQs About Arkansas Franchise Tax
Below, you'll find answers to frequently asked questions about the Arkansas franchise tax. For more in-depth information, visit our Information Center.
To obtain a tax number, register your business with the Arkansas Department of Finance and Administration. ou can apply for a sales tax identification number through the Arkansas Taxpayer Access Point (ATAP) online platform.
The Arkansas secretary of state maintains records for corporations, LLCs, limited partnerships, professional corporations, and nonprofit organizations. Foreign entities also file with the secretary of state to conduct business in Arkansas.
Arkansas does not issue a general state business license. Instead, you must register with the Arkansas Department of Finance and Administration, and certain professions may require industry-specific licenses issued by state boards or commissions.
Simplify Arkansas Franchise Tax Filing With Harbor Compliance
Meeting Arkansas franchise tax obligations doesn’t have to be overwhelming. Harbor Compliance can help simplify the process, ensuring all filings are accurate and submitted on time, so you never have to worry about deadlines or penalties.
When you order our Entity Manager module, you’ll effortlessly track the due date of your Arkansas tax report, ensuring you never miss a filing deadline. Additionally, we offer filing assistance, allowing you to focus on running your business while we handle this administrative task.
If you’d like to assess your current regulatory standing within Arkansas, you can use the Harbor Compliance Score™ for a comprehensive evaluation. You can also contact us for personalized guidance or schedule a demonstration of our software to see how it streamlines your entire entity management process.
