Corporations and limited liability companies (LLCs) registered to conduct business in Arkansas are subject to a franchise tax. This tax is calculated based on the larger of the company’s capital stock or net value. With a minimum of $150 and a maximum of $100,000, the tax is determined at a rate of 0.3% on the company’s net worth or capital stock.
An annual franchise tax report is required for all corporations and LLCs that are authorized to conduct business in Arkansas. This report needs to be sent to the Secretary of State’s office in Arkansas. The capital stock or net worth of the company as of the first day of the reporting year shall be disclosed in the report.
The franchise tax is listed as a liability on the company’s balance sheet. The obligation is stated as of the first day of the reporting period and is revised annually in accordance with the company’s capital stock or current net worth. What Is a Franchise Tax Annually?
Corporations and LLCs that are authorized to conduct business in Arkansas are subject to an annual franchise tax. The tax is computed at a rate of 0.3% and is based on the company’s net worth or capital stock. The minimum and maximum tax rates are $150 and $100,000, respectively.
What Happens in Arkansas If You Don’t Pay Franchise Tax? If you don’t pay your franchise tax in Arkansas, you may be liable to fines and interest, which can quickly add up and increase the overall cost of paying the tax. Additionally, your business could be suspended or even liquidated if you don’t pay your franchise tax.
In conclusion, companies and LLCs that are authorized to conduct business in Arkansas are subject to the state’s franchise tax. The Arkansas Secretary of State’s office must receive an annual tax filing that is based on the company’s net worth or capital stock. In addition to penalties and interest, failing to pay the tax may cause your company to be suspended or dissolved. To avoid any repercussions, it’s critical to pay your franchise taxes on time.