Most corporations, LLCs, banks, and insurance companies registered in Arkansas are subject to an annual franchise tax or annual franchise tax report requirement. While Arkansas calls both filings "franchise tax reports," the LLC version functions more like a simple annual report with a flat fee, and the corporate version involves detailed capital stock calculations.

In practice, the corporate franchise tax filing is typically handled by a tax accountant, as it requires detailed financial information. The LLC filing is simpler: a $150 flat fee and basic company information.

Non-payment of franchise taxes (for corporations) or annual franchise tax reports (for LLCs) can cause a company's state registration to be revoked. For corporations, franchise taxes continue to accrue, even for revoked businesses, until the business is dissolved, withdrawn, or merged. Under A.C.A. § 26-54-114, entities owing past-due franchise taxes, and persons substantially connected to those entities (present or past officers, directors, members, or managers), may be blocked from forming new entities or obtaining authority to do business in Arkansas. The lookback period for "past-due" taxes is three years.

How to file Arkansas franchise tax for corporations

Arkansas does not require a separate corporate annual report; the franchise tax report doubles as the corporate annual filing with the Secretary of State. As administered by the Arkansas Secretary of State, corporate franchise tax reports are due on or before May 1 each year (verify the current year's deadline on the Arkansas SOS site each filing season). Domestic corporations and corporations completing Arkansas foreign corporation registration use the same form, and it can be submitted online. There is no statutory or administrative mechanism for extensions, and the SOS does not grant due-date extensions under current law and practice. The state provides worksheets to calculate tax due, with instructions.

Here is how Arkansas franchise taxes are calculated:

Corporations without authorized stock pay a flat $300, per A.C.A. § 26-54-104. Corporations with authorized stock have a more complex calculation.

Corporations with authorized stock

Calculate the percentage of your assets applicable to Arkansas:

• Divide "Arkansas Real and Personal Property" by "Total Real and Personal Property"

• In simple terms, this is assets on the balance sheet attributable to Arkansas, divided by total assets

Calculate your total capital stock

• For each share class, multiply the number of issued shares by the par value of each

• If you don't have any par value, Arkansas treats the par value as $25 per share, per A.C.A. § 26-54-105

• Add all of those together

Calculate your Arkansas capital stock

• Multiply the percentage of your assets applicable to Arkansas by your total capital stock

Calculate your annual franchise tax

• Multiply your Arkansas capital stock by 0.003 (the 0.3% rate)

• The minimum franchise tax for corporations with authorized stock is $150, per A.C.A. § 26-54-104

Note on pending legislation: SB256, introduced in the 2025 Regular Session, would reduce the minimum franchise tax from $150 to $100 for certain corporations, according to the DFA Fiscal Impact Statement. The 2026 SOS forms still reflect the $150 minimum, which indicates SB256 either has not been enacted or has not taken effect. Verify enactment status at the Arkansas Legislature Acts database before filing.

Penalties for late filing

If your franchise tax is filed or paid late, penalties and interest apply under A.C.A. § 26-54-107:

Take your original tax owed, which you calculated above, and add a $25 penalty. Then, calculate your interest:

• Take the sum of your tax and penalty, and multiply it by 0.000274 (the daily equivalent of the statutory 10% annual interest rate, calculated as 10% divided by 365)

• Multiply that number by the number of days deficient

Calculate your total tax due for the year by adding your tax, penalty, and interest together.

Per A.C.A. § 26-54-107, the total franchise tax, penalty, and interest for any single tax year cannot exceed two times the corporation's tax owed.

The Secretary of State is required by A.C.A. § 26-54-111 to mail notice of impending revocation (currently on or before November 1) to any corporation that has not paid its franchise tax for that year.

Consequences of non-payment

Failing to pay Arkansas franchise tax carries consequences beyond penalties and interest.

For domestic corporations, continued non-payment leads to charter revocation under A.C.A. § 26-54-111. For foreign corporations, A.C.A. § 4-33-1530 provides that a certificate of authority may be revoked if franchise taxes or penalties are not paid within 120 days after due. Corporations in revoked status "endanger their corporate protections and are barred from many corporate activities," per the Arkansas SOS FAQ.

Franchise taxes continue to accrue even after revocation, until the entity is formally dissolved, withdrawn, or merged. To stop accrual, an entity generally needs to bring all franchise taxes current, file a Final Franchise Tax Report, and then file dissolution or withdrawal documents with the SOS. Consult qualified legal or tax counsel before initiating dissolution or withdrawal.

Per A.C.A. § 26-54-112, a corporation can be reinstated by filing a receipt showing payment of all amounts due. Upon reinstatement, the corporation stands in all respects as though its name had never been declared revoked.

Simplify Arkansas compliance tracking with Discern

Arkansas franchise tax calculations for corporations require detailed capital stock analysis and financial data that is typically handled by tax accountants. While Discern does not file Arkansas corporate franchise taxes, the platform automatically notifies you when Arkansas filings are due and provides guidance on requirements. For Arkansas LLCs, Discern can automatically file your Arkansas LLC annual report, removing the administrative burden of tracking the May 1 deadline. Discern also provides Arkansas registered agent services and coverage across all 51 jurisdictions.

For firms managing entities in multiple states, Discern's automated compliance tracking keeps your entire portfolio in good standing without manual deadline management. A single platform handles registered agent coverage, annual report filings, and filing reminders across every jurisdiction where your entities operate.

Schedule a demo with Discern today

Frequently asked questions

Below are answers to common questions about Arkansas franchise tax obligations for corporations and LLCs.

What is the difference between the Arkansas corporate franchise tax and the LLC franchise tax?

The corporate franchise tax uses a capital stock apportionment formula (0.3% of Arkansas-apportioned capital stock, with a $150 minimum), while the LLC franchise tax is a flat $150 fee with no asset-based calculation. Both are administered by the Secretary of State on a May 1 annual deadline.

Does Arkansas allow extensions for franchise tax filings?

No. Franchise tax extension provisions in prior Arkansas law were removed by legislation in 1991 (Acts 1046 and 1140), and current statutes and SOS practice provide no extensions. All reports are due on or before May 1 under current law. Consult the Arkansas Legislature Acts database or a legal professional for detailed legislative history.

Do Arkansas LLCs file two separate reports with the Secretary of State?

No. A.C.A. § 4-38-212 requires Arkansas LLCs to deliver an annual report to the Secretary of State, and the SOS administers this requirement together with the franchise tax obligation as the Annual LLC Franchise Tax Report, due May 1. There is one combined filing, not two separate ones.

Can a delinquent Arkansas franchise tax affect my other entities?

Yes. Under A.C.A. § 26-54-114, persons "substantially connected" to an entity with past-due franchise taxes (within a 3-year lookback) may be prohibited from forming new entities or obtaining authority to do business in Arkansas. This applies to present and past officers, directors, members, and managers.

Is the Arkansas corporate income tax the same as the franchise tax?

No. The corporate income tax (administered by the Department of Finance and Administration) and the franchise tax (administered by the Secretary of State) are entirely separate obligations with different rates, calculations, and filing processes. Recent legislative activity around reducing the corporate income tax rate does not affect Discern's franchise tax tracking coverage or your Arkansas franchise tax obligations.