All Corporations, LLCs, Banks, and Insurance Companies registered in Arkansas must pay an "annual franchise tax." Don't let the name confuse you: while Arkansas calls both filings "franchise tax reports," the LLC version functions more like a simple annual report with a flat fee, while the corporate version involves detailed capital stock calculations.

In practice, the Corporate franchise tax filing is typically handled by a tax accountant, as it requires detailed financial information. The LLC annual report is a simpler filing with just a $150 fee and basic company information. 

Importantly, non-payment of franchise taxes (for corporations) or annual reports (for LLCs) can cause a company's state registration to be revoked. For corporations, franchise taxes continue to accrue, even for revoked businesses, until the business is dissolved, withdrawn, or merged.

How to file Arkansas Franchise Tax for Corporations

Due: Annually on May 1st

Arkansas doesn’t have a separate annual report for Corporations, but Corporations must complete and file a franchise tax filing each year. Domestic and Foreign Corporations use the same form. It can be submitted online. No extensions are allowed.

Like many other franchise taxes, Arkansas uses an approximation of how much business a company does in its state to calculate franchise tax. ‍The state provides worksheets to calculate tax due, with instructions.

Specifically, here’s how Arkansas Franchise Taxes are calculated:

Corporations without Authorized Stock pay $300. Corporations with Authorized Stock have a more complex calculation.

Corporations with Authorized Stock

Calculate the percentage of your Assets applicable to Arkansas.

• Divide “Arkansas Real and Personal Property” by “Total Real and Personal Property"

• In simple terms, this is Assets on the balance sheet attributable to Arkansas, divided by Total Assets

Calculate your Total Capital Stock

• For each share class, multiply the number of issued shares by the par value of each

• If you don’t have any par value, Arkansas treats the par value as $25 per share

• Add all of those together

Calculate your Arkansas Capital Stock

• Multiply the percentage of your Assets applicable to Arkansas by your Total Capital Stock

Calculate your Annual Franchise Tax

• Multiply your Arkansas Capital Stock by 0.003

• Minimum tax is $150

Penalties for late filing

If your franchise tax is filed or paid late, penalties and interest apply:

Take your original tax owed, which you calculated above, and add a $25 penalty. Then, calculate your interest:

• Take the sum of your Tax and Penalty, and multiply it by .000274

• Multiply that number by the number of Days Deficient

Calculate your total tax due for the year by adding your tax, penalty and interest together.

Can Discern help me file Franchise Taxes?

Arkansas franchise tax calculations for corporations require detailed capital stock analysis and financial data that's typically handled by tax accountants. While Discern doesn't file Arkansas corporate franchise taxes, we automatically notify you when Arkansas filings are due and provide guidance on requirements.

For Arkansas LLCs, Discern can automatically file your annual report, eliminating the administrative burden of tracking May 1st deadlines. Discern also provides registered agent service in Arkansas and across all 51 jurisdictions, plus automated compliance tracking. 

Ready to streamline your Arkansas compliance? Book a demo with Discern today.