Every year on May 1st, a franchise tax payment is required. The corporation’s net worth, which is computed by deducting its total liabilities from its total assets, serves as the basis for calculating the tax. With a minimum tax of $150, the tax rate is $3.50 for every $1,000 of net value. $1 million is the maximum tax amount.
The franchise tax does not apply to some small firms, religious institutions, or non-profit corporations. Small firms with a net worth of under $50,000 are exempt from paying the franchise tax. Additionally, franchise taxes are not due by businesses that are domesticated in other states but exclusively conduct business in Arkansas.
Property taxes in Arkansas are among the lowest in the nation. Arkansas has an effective property tax rate that is on average 0.62%, which is significantly lower than the national average of 1.07%. For retirees and others wishing to buy a home, Arkansas is a desirable location due to its low property tax rates.
Benefits from Social Security are tax-free in Arkansas. As a result, pensioners in Arkansas are exempt from paying state income tax on their Social Security benefits. Additionally, pensions and IRA withdrawals are not subject to tax in Arkansas. As a result, retirees searching for a tax-friendly state to live in frequently choose Arkansas.
In conclusion, the Arkansas Secretary of State must receive a yearly franchise tax return from every firm doing business in the state. Every year on May 1st, the franchise tax is determined based on the net worth of the corporation. The franchise tax does not apply to some non-profit organizations or small firms with a net worth of less than $50,000. Arkansas is a well-liked retirement destination since it has some of the lowest property taxes in the nation and does not tax Social Security payments or other retirement income.