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Note: Our tax lesson is not as step-by-step as our other Arkansas LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.
You will likely need to hire a local tax professional to make sure you meet all your Arkansas tax obligations. We recommend using Thumbtack.
Annual Franchise Tax
All LLCs operating in Arkansas must file an annual report and pay a flat-rate tax of $150 each year. The $150 tax and the annual report together are known as the Annual LLC Franchise Tax Report.
We’ll walk you through how to file and pay this tax here: Arkansas LLC Annual Franchise Tax.
Register for Taxes with the AR Department of Finance and Administration
Because you are operating a business in Arkansas, you will need to register with the Department of Finance and Administration.
You can register by mail using the Combined Registration Form AR-1R or online using the Arkansas Taxpayer Access Point (ATAP).
Make sure you have your EIN Number from the IRS before registering.
Sales Tax Identification Number
A Sales Tax ID Number is used for the sale of goods and/or services in Arkansas.
This can be obtained by calling the Department of Finance and Administration at 501-682-1895. Make sure you have your Federal Tax ID Number (EIN) from the IRS before registering.
What other taxes/forms are due?
Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.
Some examples of other taxes and forms due are:
- Sales and use tax
- Income tax
- Income withholding tax
- Miscellaneous tax (timber, cigarettes, farming, real property, etc.)
- Individual estimated tax
- Partnership and LLC tax
- Motor fuel tax
- Motor carrier fuel tax
- Local taxes
- And more
For details on many of the taxes listed above, please read the Tax Guide for New Arkansas Businesses.
You can also contact the Department of Finance and Administration at 501-682-1895, or visit their website.
Our Recommendation
Calculating your tax obligations in Arkansas can be complicated and if done improperly can negatively impact your LLC.
We recommend that you get help from a tax professional once your LLC is formed. You can use Thumbtack or Yelp.
Hiring a tax professional will not only help you keep your Arkansas LLC in compliance, but it will also give you an advisor to go to for other business questions.
You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.
References
Arkansas Small Business and Technology Development Center: License, Permit, and Tax Requirements
Arkansas Department of Finance and Administration: Starting a New Business in Arkansas
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
ARKANSAS LLC GUIDE
Follow the lessons below to form your Arkansas LLC.