Franchise Tax in Arkansas

April 13, 2006

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If you are a domestic corporation (organized in Arkansas) or a foreign corporation (organized outside of Arkansas) organized or qualified to do business in Arkansas, you must pay a franchise tax. For calendar years beginning January 1, 2004, this means that the majority of corporations must pay 0.3 percent (formerly 0.27 percent) of the proportion of their outstanding capital stock that their real and tangible personal property in Arkansas bears to property in all states. (Capital stock is the total amount of stock authorized for issue by a corporation.) Arkansas requires a minimum franchise tax fee of $150 (formerly $50).

The annual reports and franchise taxes for calendar year 2004 and later years are to be filed and paid to the Arkansas Secretary of State by May 1 of the reporting year.

Beginning with the 2004 calendar year, Arkansas limited liability companies (LLCs) must pay $150 (previously $50) in franchise tax and file a franchise tax report. If the report is not timely filed, LLCs must pay an additional $25 penalty plus daily interest on the tax due.