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What Business Owners Should Know About the Arkansas Annual Franchise Tax

The Arkansas Secretary of State requires some business entities to report and file Annual Franchise Tax each year. The Annual Franchise Tax is a privilege tax that limited liability companies (LLCs) and corporations must pay for the opportunity to conduct business in Arkansas.

The obligation to pay the tax begins the year after the business entity was formed and must be filed each year by May 1. Businesses may file and pay their Annual Franchise Tax as early as January 1.

Arkansas LLCs

LLCs (limited liability companies) and PLLCs (professional limited liability companies) must file an Annual Franchise Tax Report and pay a flat fee of $150 each year.

The information requested by the Secretary of State includes:

  • Business name and address
  • Tax contact information (name, address, phone number, email address)
  • Federal Tax ID Number
  • Registered Agent information (name, address)
  • Principal office (in Arkansas) address
  • Names of LLC members, managers, and tax preparer

Arkansas Corporations

The Annual Franchise Tax fees and information required vary depending on the type of corporation.

Stock Corporations

Corporations that issue stock to shareholders must pay a minimum Annual Franchise Tax of $150 or 0.3 percent of their outstanding capital stock, whichever is greater.

Information requested on the state’s form includes:

  • Business name and address
  • Tax contact information (name, address, phone number, email address)
  • Federal Tax ID Number
  • Registered agent information (name, address)
  • Principal office (in Arkansas) address
  • Names of corporate officers and tax preparer
  • Date of qualification
  • State of incorporation
  • Nature of business
  • Total authorized capital stock
  • Issued and outstanding capital stock
  • Calculation of tax due

Non-Stock Corporations

Non-stock corporations are for-profit corporations that do not issue stock to shareholders. They must pay a flat-rate Annual Franchise Tax of $300.

The information they must provide when filing their annual tax includes:

  • Business name and address
  • Tax contact information (name, address, phone number, email address)
  • Federal Tax ID Number
  • Registered agent information (name, address)
  • Principal office (in Arkansas) address
  • Name of corporate officers and tax preparer
  • Date of qualification
  • State of incorporation
  • Nature of business

Other Business Entity Types

Other business entities, nonprofits, limited partnerships (LPs), limited liability partnerships (LLPs), and limited liability limited partnerships (LLLPs) must file an annual report. However, they do not pay a franchise tax.

How to File Your Annual Franchise Tax

Businesses can file their reports and pay the Annual Franchise Tax online via the Arkansas Secretary of State website. Alternatively, business owners can file by mail to the Business and Commercial Services Division at:

P.O. Box 8014
Little Rock, Arkansas 72203-8014

While the state’s forms are not overly complicated, businesses can save time and ensure their paperwork is completed accurately and quickly by letting CorpNet handle the annual report filings for them. What busy business owners can’t benefit from having one less task on their plate?

Penalties for Filing Late

If a business fails to file or files past the May 1 deadline, it may be subject to penalties, interest, or worse!

  • Penalty: The company must pay a $25 one-time fee.
  • Interest: Interest in the amount of 10 percent per year will be applied to the unpaid balance.
  • Worst Case: The state might even revoke a company’s authority to do business in Arkansas if it continues to ignore its franchise tax reporting and payment responsibilities.

Note that for 2021 franchise taxes, the Secretary of State has waived the penalty and interest until July 15, 2021. This is because the processing of franchise taxes and annual reports has recently transitioned from the Arkansas Department of Finance and Administration to the Secretary of State. Therefore, the state is providing business owners some leeway due to possible processing delays.

CorpNet Can Help With Your Filing

CorpNet’s team of filing experts is here to help you save time, reduce stress, and keep your business in good standing. Whether you’re looking to form an Arkansas LLC or incorporate in Arkansas or want to make sure your ongoing compliance filings get done correctly and on time, we have the expertise and experience to give you peace of mind.

Contact us today to get started!

And remember, we provide online business filing services (and registered agent services) in all 50 states. No matter where you start and grow your business, we will be by your side as you make your entrepreneurial dreams come true!


Resources:

https://www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax-report-forms
https://www.sos.arkansas.gov/uploads/bcs/Corp_Nonstock_FT_2021.pdf
https://www.sos.arkansas.gov/uploads/bcs/Corp_FT_2021.pdf
https://www.sos.arkansas.gov/business-commercial-services-bcs/franchise-tax

<a href="https://www.corpnet.com/blog/author/nellieakalp/" target="_self">Nellie Akalp</a>

Nellie Akalp

Nellie Akalp is an entrepreneur, small business expert, speaker, and mother of four amazing kids. As CEO of CorpNet.com, she has helped more than half a million entrepreneurs launch their businesses. Akalp is nationally recognized as one of the most prominent experts on small business legal matters, contributing frequently to outlets like Entrepreneur, Forbes, Huffington Post, Mashable, and Fox Small Business. A passionate entrepreneur herself, Akalp is committed to helping others take the reigns and dive into small business ownership. Through her public speaking, media appearances, and frequent blogging, she has developed a strong following within the small business community and has been honored as a Small Business Influencer Champion three years in a row.

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