business & Commercial services
The Arkansas Secretary of State Office is responsible for the collection of the state’s mandatory franchise taxes. Companies who conduct business in Arkansas are required to pay this annual tax, with the first $8 million placed into the state’s general fund and the remaining balance into the Education Adequacy Fund, which provides funding to public schools and higher education.
The Arkansas General Assembly’s Act 94 of 2003, Arkansas Code Annotated as 26-54-104, adjusted the state’s franchise tax and changed the tax deadline date to May 1st of the payment year.
NOTE: Franchise taxes are owed whether or not business is conducted or a profit is made. Franchise tax is NOT pro-rated and will be owed regardless of how long the business operated in the calendar year.
Franchise Taxes Collected:
2009 - $22.8 million
2013 - $26.5 million
2017 - $26.1 million
File Franchise Tax
The chart below lists the franchise tax rates for various entities under Arkansas Code 26-54-104.
Assets Less Than $100 million
|Franchise Tax Type||Current Rate|
|Corporation/Bank with Stock||.3% of the outstanding capital stock;
|Corporation/Bank without Stock||$300|
|Limited Liability Company||$150|
|Insurance Corporation Legal Reserve Mutual||$300|
|Insurance Corporation-Legal reserve mutual assets greater than $100 million||$400|
|Insurance Company-Outstanding capital stock less than $500,000||$300|
|Insurance Company-Outstanding capital stock greater than $500,000||$400|
|Mortgage Loan Corporation||.3% of the outstanding capital stock;
|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the prior calendar year and pay at the time of dissolution the minimum franchise tax for the year in which dissolved or withdrawn.