Franchise Tax Overview
Arkansas law requires businesses registered in Arkansas to pay an annual franchise tax of $150. The tax for LLCs is a “privilege tax” to generate revenue. If unpaid for three years, an LLC’s status will be revoked. LLCs must file a report yearly to stay compliant.
You can submit the $150 payment and file the form starting Jan. 1 by check or online. Domestic and foreign nonprofits and charities must also file reports. Taxes continue for revoked businesses until dissolution, withdrawal, or merger. Additional filings will be prohibited if unpaid.
Tax Rate and Compliance
The franchise tax rate depends on the business’s size and type. For example, a small business is taxed at 0.5% while a large corporation is taxed at 2%. Stay informed to protect your business and avoid penalties.
LLC Reporting Requirements
LLCs and PLLCs must file and pay $150 each year. According to Section 26-54-104, all Arkansas LLCs must file and pay $150 regardless of income or activity to stay compliant and in good standing. Most states require an annual LLC report. In Arkansas, it is the Annual Franchise Tax Report. There is no other report.