2021 confusion: Originally, Franchise Tax Reports were filed with the Secretary of State (SOS). Then in January 2021, the Department of Finance and Administration (DFA) took over the responsibility. However, the transition from the SOS to the DFA failed. And as of March 2021, Franchise Tax Reports are now back to being handled by the SOS. If you see any mention of the DFA being involved, please know that is old information. As a part of the adjustment to this new change (going back to the way it’s always been), the SOS won’t charge any interest or penalties for late filings until July 15th, 2021.
Arkansas LLCs must file Annual Franchise Tax Reports
As per Section 26-54-104 of the Arkansas Corporate Franchise Tax Act, all Arkansas LLCs are required to file an Annual Franchise Tax Report along with a flat-rate tax of $150.
This $150 is due regardless of income or business activity.
The Annual Franchise Tax Report must be filed every year in order to keep your LLC in compliance and in good standing with the state.
Note: Most states have an LLC Annual Report that must be filed every year. The Annual Report in Arkansas is called the Annual Franchise Tax Report. There is no other “annual report” for an Arkansas LLC.
What is the purpose of the Arkansas Franchise Tax?
Arkansas LLC Franchise Tax is a “privilege tax”. Meaning, it’s a flat-rate tax of $150 per year for the privilege to do business in the state.
The purpose of the tax is to generate revenue for the State of Arkansas.
Again, the $150 tax is due every year (starting after the year of LLC formation), whether or not your LLC makes any money or has any activity.
How much is the Arkansas LLC Annual Franchise Tax?
The Arkansas LLC Annual Franchise Tax is $150 per year. This is a flat-rate fee.
When is the Arkansas LLC Annual Franchise Tax Report due?
The Arkansas LLC Annual Franchise Tax Report is due by May 1st every year.
When is the first Annual Franchise Tax Report due?
Your LLC’s 1st Annual Franchise Tax Report is due the year after your LLC effective date, which is the date your LLC went into existence (the date your LLC was approved). In Arkansas, this is called the “Date Filed“.
To find your Arkansas LLC’s Date Filed:
- Look at the approved copy of your Arkansas LLC Articles of Organization
- Search your LLC name in the Arkansas Business Entity Search and look for “Date Filed”
Example 1: If your LLC went into existence on January 10, 2022, your LLC’s first Annual Franchise Tax Report is due by May 1, 2023.
Example 2: If your LLC went into existence on November 22, 2022, your LLC’s first Annual Franchise Tax Report is due by May 1, 2023.
Example 3: If your LLC went into existence on July 1, 2023, your LLC’s first Annual Franchise Tax Report is due by May 1, 2024.
How early can I file an Arkansas LLC Franchise Tax Report?
You can file your LLC Annual Franchise Tax Report as early as January 1st each year.
Again though, your first Franchise Tax filing year doesn’t start until the year after your LLC is approved.
Will my LLC get a reminder to file and pay the Annual Franchise Tax Report?
Postcard reminders are mailed to your LLC’s “Contact Person” for Franchise Tax. They are sent out every year in January.
(This Contact Person’s information was entered when your Articles of Organization was filed with the state.)
If the Contact Person entered an email address in the Articles of Organization, they will also receive an email reminder in January.
However, any reminder sent from the state is considered a “courtesy” reminder. Meaning, even if you don’t receive a reminder notice from the state, it’s still your responsibility to file and pay your LLC’s Franchise Tax every year.
For that reason, we recommend putting a repeating reminder on your phone, computer, and/or writing it out someplace you’ll see every year.
Here’s a video on how to use Google Calendar to create free Franchise Tax reminders:
Is there a penalty if my LLC doesn’t file the Annual Franchise Tax Report and pay the $150?
Yes, there are a few penalties for failure to file an LLC Annual Franchise Tax Report.
Penalty and interest:
Your LLC will be charged a penalty and interest for late filings or failure to file. The penalty is a one-time charge of $25. Then interest is charged at 10% per year on the entire outstanding balance. [Section 26-54-107(b)(1)(A)]
Revoking the LLC’s corporate charter:
If your LLC continues to ignore the Annual Franchise Tax Report requirement, the state will send you a final warning called the “Notice of Subject to Forfeiture”.
If the Annual Franchise Tax Report is still not filed, the state will revoke the LLC’s corporate charter and authority. This strips the LLC of its power, rights, and protections. [Section 26-54-111]
The LLC can’t file documents & Members can’t form another LLC:
If your LLC has past-due Franchise Tax, it can’t make any filings with the Arkansas Secretary of State.
Additionally, the LLC Members, LLC Managers, LLC Officers, or anyone “substantially connected” with the LLC cannot form a new Arkansas LLC or register a foreign LLC in the state of Arkansas. [Section 26-54-114]
Filing methods for Annual Franchise Tax Reports
Arkansas LLC Annual Franchise Tax Reports can be filed online or by mail.
The flat-rate tax of $150 is still the same regardless of which filing method you choose.
LLC University® recommendation:
We recommend the online filing as it’s faster and easier to complete.
Mail filing instructions:
If you prefer to file by mail (instead of online), you’ll need to:
- Visit the Arkansas Secretary of State: Franchise Tax / Annual Reports
- Scroll down to the table at the bottom of the page
- Look for “Limited Liability Company” and click “PDF” under the corresponding year
- Complete the PDF form
- Pay by check or money order ($150)
- Make payable to “Arkansas Secretary of State”
Mail the form and payment to:
Arkansas Secretary of State
Business and Commercial Services Division
PO Box 8014
Little Rock, AR 72203-8014
Instructions for filing Arkansas Annual Franchise Tax Online
- Visit the Business Entity Search page
- Enter your LLC name and click “Search”
- Click on the link for your LLC
- Scroll to the bottom and click the “Pay Franchise Tax for this corporation” link
- (I know it says “corporation” and it should say “LLC”, but it’s the correct link)
Enter your File Number:
This should be auto-filled.
Enter your Federal Tax ID:
Enter your LLC’s EIN Number.
(If your LLC doesn’t have an EIN yet, you can enter 9 zeroes.)
Show Available Filings:
Click the “Show Available Filings” button.
You’ll now see the current year’s Tax Form. Click the “Edit Form” icon/link to the far right.
(If you are behind on prior years, you’ll see those years as well.)
1a. Tax Person’s Contact Information
The Tax Contact Person is the person who is responsible for receiving tax reminders and paying the Annual Franchise Tax for your LLC.
Most people list themselves here. Review the information and if needed, make any changes or updates.
Because you’re entering a person’s name, you can leave the “Business Name” box blank.
1b. Registered Agent
If you don’t need to make any changes to your LLC’s Arkansas Registered Agent, skip this step and leave the box unchecked.
If you want to change your Arkansas Registered Agent, check the box and enter the new Registered Agent information.
2. Required Information
- Related article: Read Member-managed vs Manager-managed LLC
Managers or Members:
- If your LLC is Manager-managed, check off “Managers”.
- If your LLC is Member-managed, check off “Members”.
Then add the name (or business name) of each of your LLC’s Members or Managers.
Make sure to designate each person as a “Member” or “Manager” by using the drop down list on the left.
Type your full name in the “Signature” box and check off the box agreeing to the terms. Then click the “Next” button at the bottom.
You will be taken back to the beginning, but this time the form is ready for submission. Just click the “Next” button to proceed.
(If you see another page with late fees, you’ll need to click the “Next” button again.)
Select your method of payment and click “Continue”.
Enter your contact and billing information. An additional $3 – $5 processing fee will be added to your total. Click the “Confirm” button to submit your payment.
Congratulations! Your Annual LLC Franchise Tax Report has been filed.
On the next page you will be able to download/save your receipt. Your receipt will also be emailed to you. We recommend printing this receipt and keeping a copy with your business records.
There is nothing else you need to do after making payment. Just make sure to file and pay your Annual Franchise Tax Report each year going forward.
Calendar reminder for next year
Don’t forget to set a calendar reminder for next year’s Franchise Tax payment.
Arkansas Secretary of State Contact Info
If you have any questions about Annual Franchise Tax, you can contact the Arkansas Secretary of State at 501-682-3409.
Their hours are Monday through Friday, 8am – 4:30pm Central Time.
Arkansas Secretary of State: General Information and Definitions
Arkansas Secretary of State: Business Services FAQ
Arkansas Legislature: Arkansas Tax Reform Act of 2019
Arkansas Legislature: Senate Bill 561 (now Act 819)
Arkansas Code Annotated: Section 26-54-104
Arkansas Code Annotated: Section 26-54-105
Arkansas Code Annotated: Section 26-54-107
Arkansas Code Annotated: Section 26-54-111
Arkansas Code Annotated: Chapter 54