Arkansas LLC and Inc. Annual Filing Requirements

Arkansas LLC Annual Filing Requirements

The annual requirements for limited-liability companies registered in Arkansas will be governed by the Arkansas Code of 1987 (2024), Title 4, Subtitle 3, Chapter 38 – Uniform Limited Liability Company Act. The Arkansas LLC annual requirements may differ from those of other entity structures, such as corporations, sole proprietorships, and partnerships. If you plan to form a limited liability company in this state, the essential annual requirements are categorized as follows.

Arkansas LLC Annual Franchise Tax Report

One of the critical annual filings for LLCs in Arkansas is the annual franchise tax report. The filing of this report is mandatory under the Arkansas Code of 1987 (2024), AR Code § 26-54-104 (2024). You will need to file this with the office of the Arkansas Secretary of State (SOS). Franchise tax in this state is considered a “privilege tax.” This simply means that it is being levied on your company for the privilege of doing business in this state. This is one of the most important annual requirements for an Arkansas LLC, and there is a flat-rate tax of $150 per year. The purpose of the franchise tax is to generate revenue for the state of Arkansas.

Arkansas LLC Taxes

After you start an Arkansas LLC, there are two main types of ongoing filings. The first is the annual franchise taxes, and the other is state or other taxes. When you file an Arkansas LLC annual report, you also file the franchise taxes. The question is, what other taxes do you need to file, or does your LLC need to file in Arkansas? Let’s look at the applicable taxes.

• Individual Income Tax Return – When you form a limited liability company, for tax purposes, it is considered a pass-through entity. This type of entity is also known as a flow-through entity. This simply means that an LLC will report its income on the individual income tax returns of its owners. The state has a graduated personal income tax rate, and this varies from 2 percent to 3.9 percent. This graduated tax rate applies to income ranging from $5,300 to $89,600. This type of tax is one of the critical annual requirements for an Arkansas LLC. It is also important to note that a multi-member LLC is taxed as a partnership by default, while a single-member LLC is taxed as a disregarded entity or sole proprietorship.
• Pass-through Entity Tax (PET) – The owners of an LLC can also elect the Pass-through Entity Tax. This type of tax will take effect for tax years beginning on or after January 1, 2022. If you have registered your limited-liability company in 2024, then you can elect Pass-through Entity Tax (PET) as a part of your LLC annual filing in Arkansas. When you elect to be a PET, you will be able to file a single income tax return on behalf of the company and also pay the income tax on behalf of all its owner-members. It is important to note that if a limited liability company has chosen to be taxed as a C corporation, then PET will not be applicable for such an entity.
• Withholding Tax – Taxes are an essential component of Arkansas LLC annual requirements, and one tax that may be applicable for your company is the withholding tax. If you have employees, you will need to withhold state income tax from their wages. The tax rate is 3.9 percent, and it has to be remitted to the Arkansas Department of Finance and Administration.
• Sales and Use Tax – If the primary business activity of your company involves selling or promoting taxable goods or services to customers within the state, then you will need to collect sales tax. The sales tax has to be filed with the Arkansas Department of Finance and Administration. You will also need to register your LLC with the Arkansas Taxpayer Access Point (ATAP) for a sales tax account. You will be required to file a $50 sales tax permit fee. All taxes as part of the Arkansas LLC annual requirements can be filed using the ATAP.

Arkansas Corporation Annual Filing Requirements

Once you have incorporated your company, there are specific annual requirements for Arkansas corporations that need to be fulfilled. This helps you maintain a good standing in this state. The yearly requirements are almost similar in most US states, including Arkansas. The annual requirements may be different for a domestic corporation and a foreign entity, as not every entity needs to submit an Arkansas corporation annual report. Let’s examine the key annual requirements in this state.

Arkansas Corporation Annual Report

Most US states require business entities, including corporations, to file an annual report. However, in this state, a corporation is required to file an Arkansas annual report, also referred to as the Annual franchise tax report. The Arkansas Code of 1987 (2024), AR Code § 4-27-1622 (2024), states that each domestic and foreign corporation in the state must file an annual franchise tax report with the Office of the Secretary of State. This Arkansas corporation’s annual report must be filed by May 1 each year, although submission can begin as early as January 1.

Arkansas Corporation Taxes

Arkansas is an excellent state for starting a new business thanks to a vibrant industrial landscape and pro-business climate. Therefore, if you plan to incorporate in this state, you must remain compliant with various state laws and requirements. One of the most important annual requirements for Arkansas corporations is filing state business and corporate taxes on time. Let’s examine some of the applicable taxes in the state for business corporations.

• Corporate Income Tax – Arkansas has a corporate income tax that applies to most C Corporations. A graduated tax rate is applied to the Arkansas Net Taxable Income (NTI), varying from 1 percent ($0- $3,000) to 4.3 percent for businesses with taxable income exceeding $11,001. Unlike an Arkansas corporation’s annual report, you can file this tax electronically using the Arkansas Taxpayer Access Point (ATAP) portal.
• Estimated corporation income tax – A corporation conducting its business in the state of Arkansas may be required to file an estimated corporation income tax. This will be filed by taxpayers who expect their estimated tax to exceed $1,000. It has to be filed with the Commissioner of Revenue, Department of Finance and Administration (DFA).
• Sales and Use Tax – This is one of the most common forms of taxes applicable to sellers in any state of the USA. The sales tax and the use tax may have different rates depending on the product or service and the location of the company. Arkansas Corporation annual requirements mandate that gross receipts (sales) tax will be imposed on any individual or retailer conducting business in this state. Of course, several items and transactions are not taxable under this category, like motor fuel and newspapers. Items sold for resale will also be exempt from tax. The Arkansas state sales and use tax rate is six percent of the actual sales price. However, food sales will be taxed at a rate of two percent.
• Miscellaneous Taxes – Apart from the franchise tax, also known as the Arkansas corporation annual report, your company may be required to file certain miscellaneous taxes in this state. Some of the Arkansas miscellaneous taxes that may be applicable, depending on the business activity, include alcoholic beverage taxes, real property transfer tax, casino gaming and sports wagering taxes, construction non-residential surcharge, cigarette paper taxes, and severance tax, among others.

Need any Assistance in Filing Arkansas LLC or INC Annual Reports?

The annual requirements of each state in the USA vary and are administered by state authorities and business laws. One of the most essential requirements is the submission of an Arkansas annual report, which is typically presented in the form of a franchise tax report. If you need detailed information about a corporation or LLC’s annual filing in Arkansas, including taxes or annual reports, then IncParadise can assist you with this.