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Franchise Tax 

Companies must pay franchise taxes to conduct business in Arkansas. Approximately $24 million was collected in franchise tax last year.  The first 8 million dollars is placed back into the state's general fund, and the remaining balance to the Education Adequacy Fund, providing money for public schools, higher education, health and human services, and other governmental services. 

The Arkansas General Assembly’s Act 94 of 2003, codified as 26-54-104, increased the state’s franchise tax in the 2004 tax year and changed the tax deadline to May 1 of the payment year. The additional funds garnered by this plan help fund the state’s education system.

Franchise Taxes Collected

  • 2005 - $18.5 million
  • 2006 - $19.6 million
  • 2007 - $20.5 million
  • 2008 - $20.7 million
  • 2009 - $22.3 million
  • 2010 - $24.0 million
  •   File Franchise Tax

    The chart below lists the franchise tax rates for various entities under Arkansas Code 26-54-104. 
    Franchise Tax Type Current Rate for
    2005 Reporting Year
    Corporation/Bank with Stock .3% of the outstanding capital stock;
    $150 minimum
    Corporation/Bank without Stock $300
    Limited Liability Company $150
    Insurance Corporation Legal Reserve Mutual,
    Assets Less Than $100 million
    $300
    Insurance Corporation Legal Reserve Mutual,
    Assets Greater Than $100 million
    $400
    Insurance Company Outstanding Capitol Stock
    Less Than $500,000
    $300
    Insurance Company Outstanding Capitol Stock
    Greater Than $500,000
    $400
    Mortgage Loan Corporation .3% of the outstanding capital stock;
    $300 minimum
    Mutual Assessment Insurance Corporation $300

    Note: 26-54-105. Franchise tax reports.
    d)(1) Every corporation that dissolves shall be required to pay at the time of dissolution the franchise tax for the prior calendar year and pay at the time of dissolution the minimum franchise tax for the year in which dissolved or withdrawn.



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