Filing Your Annual Report in Arkansas

Are you one of the 249,907 small business owners in Arkansas wondering if you need to file an annual franchise tax report, and how? It can be a confusing time right now, as the Arkansas Tax Reform Act of 2019 changes go into effect in January 2021. 

As a business owner, it is your responsibility to file the required forms and pay the associated fees of the municipality in which your business operates. That can be frustrating and confusing when you’re trying to build a business and the state is changing the game. 

Since the state hasn’t yet put out all the new information, we’ve pulled together the basic info you need now. 

What is an Arkansas annual report? 

In Arkansas, Arkansas limited liability companies (LLCs) and corporations file an annual report form called the annual franchise tax. This form and fee are due regardless of whether the business actually did any business in the state. If the company exists in Arkansas, it owes the tax until the business is properly dissolved with the Arkansas Secretary of State. To properly dissolve the business, you must file Articles of Dissolution for an LLC or corporation with the state. 

Arkansas Annual Report for Corporations vs LLCs

Both corporations and LLCs are required to file the annual franchise tax form and pay the tax. The state gives both entities the opportunity to complete the process online or print the correct franchise tax registration form for LLCs or corporations and mail it to the state. The state will then mail you an annual franchise tax report form. If you plan to print the form and mail it, be sure to download the form for the appropriate year. 

The tax for each entity is different. Limited liability companies pay $150 whether filing is done online or through the mail. Corporations with stock pay 0.3% of outstanding capital stock or $150, whichever is greater. Corporations without stock pay $300.  

Where do I file my Arkansas annual report? 

Prior to Dec. 31, 2019, the annual report (called the franchise tax) required by LLCs and corporations in Arkansas was reported and paid through the Arkansas Secretary of State. 

Due to the passage of the Arkansas Tax Reform Act of 2019, the annual franchise tax will be paid through the Arkansas Department of Finance and Administration as of January 1, 2021. 

For online filing, you can use the Arkansas Taxpayer Access Point after January 1, 2021. You will also be able to file and pay in person, by mail, and by fax, though those access points haven’t been released yet. 

Annual franchise tax returns from previous years can be obtained by completing form AR-4506 and sending it to the Franchise Tax Section with a check or money order for $2 per requested report. 

When do I file my Arkansas annual report?

The Arkansas annual report and franchise tax must be postmarked or sent in electronically by May 1. If May 1 is a weekend day or holiday, then the due date is the first business day after. 

There are no extensions available for this due date. 

How much does the Arkansas annual franchise tax cost? 

LLCs pay a flat fee of $150 for the annual franchise tax in Arkansas. 

Corporations that do not have authorized stock pay a flat annual franchise tax fee of $300. 

Corporations that do have authorized stock compute their annual report franchise tax fee by:

1. Dividing the total property in Arkansas by the total property in the U.S. Consult the company’s balance sheet on the last day of the tax period for this information.
2. Multiplying that result by the value of issued and outstanding capital stock. 
3. Multiplying that result by 0.003.
4. If the total is under $150, then pay $150. If the total is over $150, then pay the total. 

Insurance companies and legal reserve mutual entities should consult the Arkansas Department of Finance and Administration for calculation methods. 

What information do I need to file my Arkansas annual report? 

Since the new forms and system are currently in development (as of December 2020), it is not possible to list all of the information that will be necessary to complete the forms. Previous annual franchise tax forms required the following information, so you may need the same information for the new ones, too. 

For corporations with stock:

• Business name and address
• Tax contact name, address, phone, and email
• Federal Tax ID number
• Registered agent name and address
• Address of the principal office in Arkansas
• Current names of corporate governors, and their titles
• Date and state the business was originally qualified
• Nature of the business
• Number and value of total authorized capital stock
• Number and value of issued and outstanding capital stock 
• Calculation of tax due
• Signature of authorized person

For corporations without stock:

• Business name and address
• Tax contact name, address, phone, and email
• Federal Tax ID number
• Registered agent name and address
• Address of the principal office in Arkansas
• Current names of corporate governors, and their titles
• Date and state the business was originally qualified
• Nature of the business
• Signature of authorized person

For LLCs:

• Business name and address
• Tax contact name, address, phone, and email
• Federal Tax ID number
• Registered agent name and address
• Address of the principal office in Arkansas
• Distinction of whether the LLC is managed by members or managers
• Names of members/managers
• Name of tax preparer
• Signature of authorized person

After January 1, 2021, direct questions regarding the annual report franchise tax to the Arkansas Department of Finance and Administration. You can also call them for more help at the following phone number: (501) 682-7920.

What if I miss the deadline to file my Arkansas annual report? 

The filing deadline for annual franchise taxes is May 1st. Typically, companies filing after the deadline are charged a $25 late fee plus 0.000274% interest per day the payment is delinquent. 

Failure to comply with annual franchise tax obligations within 60 days after the due date can result in their business entity’s status being revoked. This means the company can no longer do business as an LLC or corporation in the state of Arkansas. The business then loses the tax status and legal protections afforded to the company and its business operations.

What happens after I file my Arkansas annual report?

Once the annual franchise tax form is submitted and the tax is paid, the state will review it. If it’s submitted online, the processing time is usually 24 hours. You’ll receive a receipt in your email showing your franchise tax paid in full. If you mail paper forms with a check, it will take the state two to three weeks to process your report. In this case, a receipt is not sent back to the business owner. 

Who do I contact if I have issues filing my Arkansas annual report?

To gain assistance or answers to questions regarding the Arkansas annual report after January 1, 2021, contact the Arkansas Department of Finance and Administration. There are numerous offices throughout the state if you wish to visit in person.