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State Capitol, RM 256
Little Rock, AR 72201
501-682-1010
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Business/Commercial Services Division
1401 West Capitol,
Ste., 250
Little Rock, AR 72201

BUSINESS AND COMMERCIAL (UCC) SERVICES

FRANCHISE TAX

Companies must pay franchise taxes to conduct business in Arkansas. Approximately $11 million was collected in franchise tax last year. These monies are placed back into the state’s general fund and 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.

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the prior calendar year and pay at the time of dissolution the minimum franchise tax for the year in which dissolved or withdrawn.

Reporting Forms

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