Corporate Franchise Tax
The Arkansas Franchise Tax is an annual tax imposed on Arkansas corporations for the grant of charter privileges and on non-Arkansas corporations for the privilege of doing business. The due date for the tax is June 1 in the calendar year following the year of incorporation or qualification and each June 1 thereafter.
For a corporation incorporated under the laws of the state of Arkansas, the franchise tax is calculated by multiplying the number of outstanding capital shares by the par value (if no par stock, $25 is used) of those shares, then multiplying by 0.0027.
For a corporation incorporated outside of Arkansas but authorized to do business in the state, the number of issued and outstanding capital shares is multiplied by the par value to obtain the total value. This value is multiplied by the percentage of assets applicable to Arkansas (Arkansas assets divided by total assets) to obtain the Arkansas capital stock. The resulting figure is multiplied by 0.0027 to obtain the franchise tax.
| Number of issued and outstanding capital shares | x | Par value;$25 if no par value | = | Total value of issued and outstanding capital stock |
| Total value of issued and outstanding capital stock | x | Percentage of assets applicable to Arkansas | = | Arkansas capital stock |
| Arkansas capital stock | x | 0.0027 | = | Franchise tax due |
Businesses locating in Arkansas do not have to disclose the total assets of their parent corporations. If a business is a U.S.-based corporation and is simply applying for authorization to do business in Arkansas, it need only supply a balance sheet of that U.S. corporation.
Corporations without authorized capital stock shall pay an annual tax of $100 regardless of valuation. No corporation shall pay a tax of less than $50 or more than $1,075,000.
