Arkansas Corporation Franchise Tax: 0.3% of Outstanding Capital Stock, $150 Minimum, $300 for Stockless Corporations, Due May 1
Arkansas Corporation Franchise Tax: 0.3% of Outstanding Capital Stock, $150 Minimum, $300 for Stockless Corporations, Due May 1
If your corporation is organized in Arkansas, or is a foreign corporation authorized to do business here, you owe the Arkansas corporation franchise tax every year. It is a yearly charge tied to the capital stock of the corporation, not a tax on profit. You report it to the Arkansas Secretary of State on the Annual Corporation Franchise Tax Report, which is due on or before May 1 with no extensions.
The amount depends on how your corporation is structured. A corporation with stock pays 0.3% of its outstanding capital stock, with a $150 minimum. A corporation without authorized stock pays a flat $300. This guide explains each category, shows how to calculate the figure, and lists what to confirm before you file.
The Short Answer by Entity Type
| Entity type | Annual franchise tax | Notes |
|---|---|---|
| Corporation with capital stock | 0.3% of outstanding capital stock, $150 minimum | You owe the greater of the two figures. |
| Corporation without authorized stock | $300 | A flat amount. Share counts do not change it. |
| Insurance corporation | $300 or $400 | The tier depends on company size. Confirm which tier applies with the Secretary of State. |
| Mortgage loan corporation | 0.3%, $300 minimum | You owe the greater of the two figures. |
| Limited liability company (LLC) or professional LLC (PLLC) | $150 flat | Filed on the Annual LLC Franchise Tax Report, due the same May 1 date. |
The 0.3% formula is for corporations and mortgage loan corporations. It does not apply to an LLC, which pays a flat $150 regardless of its capital.
Franchise Tax Is Not the Income Tax
The Arkansas corporation franchise tax is paid to the Arkansas Secretary of State, Business and Commercial Services Division. It is separate from the corporate income tax, which the Arkansas Department of Finance and Administration (DFA) administers. Each tax has its own filing and its own agency. Paying one does not satisfy the other, so a corporation can owe both.
Corporation With Stock: How the 0.3% Works
The 0.3% rate applies to outstanding capital stock, and two terms matter here:
- Authorized stock is the maximum number of shares your articles allow the corporation to issue. It is set in the formation documents, and it is not the tax base.
- Outstanding stock is the stock actually issued and held by shareholders. The Secretary of State's report form uses issued and outstanding stock, and that is the figure you report.
Authorized shares are often far higher than the shares you have issued. A corporation that authorized 1,000,000 shares but has issued 40,000 reports based on the 40,000 outstanding shares. The Articles of Incorporation for Domestic For-Profit Corporation (Form DN-01) asks for the number of authorized shares and the par value. It does not fill in a default share count, so enter the figures your corporation actually needs.
The Secretary of State values no-par shares at $25 each on the report. Three examples show how the calculation works:
- 40,000 outstanding no-par shares x $25 = $1,000,000 in capital stock. 0.3% of $1,000,000 = $3,000 in tax.
- $50,000 in outstanding capital stock x 0.3% = $150, which equals the minimum.
- $20,000 in outstanding capital stock x 0.3% = $60, which is raised to the $150 minimum.
Every corporation with stock pays at least $150, however small its capital. For par-value shares, confirm the valuation line on the current report form, because the form controls how each class of stock is entered.
Corporation Without Stock: The $300 Flat Tax
A corporation without authorized stock pays a flat $300 annual franchise tax. The 0.3% calculation does not apply, and the amount does not change with share count or par value. The $300 is due on the same May 1 date.
Confirm your category before you file. A corporation with authorized stock uses the 0.3% formula and the $150 minimum, not the $300 flat amount. Filing under the wrong category is an easy error to make when a corporation's charter language is unclear, so check your articles of incorporation first.
Other Corporation Types
Insurance corporations pay $300 or $400, depending on their size. The Secretary of State schedule sets the tier, so confirm which one applies to your company before filing. Mortgage loan corporations pay 0.3% with a $300 minimum. LLCs and PLLCs pay a flat $150 on the Annual LLC Franchise Tax Report, due May 1.
Foreign Corporations: Apportionment by Arkansas Assets
A foreign corporation is one organized under another state's law that is authorized to do business in Arkansas. It does not pay on its entire capital base. Instead, the tax is apportioned using the ratio of its Arkansas assets to its total assets.
For example, $2,000,000 in Arkansas assets out of $10,000,000 in total assets is a 20% ratio. The report forms show how that ratio is applied to the tax and how the minimum works with it. Confirm those steps against the current form with the Secretary of State, and consider a CPA if your Arkansas and out-of-state operations are complex.
The Deadline: May 1, No Extensions
The report is due on or before May 1 each year. It covers the year ending December 31 of the preceding year. Extensions are not available.
Your first report is due May 1 of the year after you form. A corporation formed at any point in 2026, for example, has its first report due May 1, 2027.
A late report adds a $25 penalty plus interest. Confirm how the interest is calculated with the Secretary of State before you file late.
How to File and How Long It Takes
You can file the report online through the Corporations Online Filing System, or by mail or in person. The Secretary of State lists anticipated processing of 3 to 5 business days for all filings, whether mailed, dropped off, or submitted online.
Its Business Services FAQ says the division completes most filings, such as articles of incorporation, amendments, mergers, or dissolutions, within two business days of receipt. The same FAQ says in-person drop-offs currently carry a 48-hour turnaround. The Secretary of State does not publish an expedited service or an expedite fee for business entity filings. Plan around the 3 to 5 business day window so you are not relying on a fast turnaround before May 1.
Preparing Your Report: A Checklist
- Confirm your entity type. Corporations, mortgage loan corporations, insurance corporations, and LLCs each follow a different rule.
- Pull your current issued and outstanding share count and par value from your corporate records, not from your authorized share number.
- Calculate 0.3% of outstanding capital stock. If the result is below $150, the minimum applies.
- For a foreign corporation, calculate the Arkansas asset ratio and apply it as the form directs.
- Confirm that your registered agent is current. Every registered entity must maintain one, and the agent must have a street address in Arkansas where the agent is located. A P.O. Box is not acceptable, and an incomplete filing will be returned for correction.
- File before May 1 and keep the confirmation with your corporate records.
If your registered agent changes, file the change with the Secretary of State. There is no fee for changing the registered agent.
Common Mistakes to Avoid
- Using authorized shares instead of outstanding shares when calculating the 0.3% figure.
- Applying the 0.3% formula to an LLC. An LLC pays a flat $150.
- Assuming the franchise tax covers income tax. The two are separate obligations with separate agencies.
- Assuming the DN-01 fills in a default share count. You enter the authorized shares and par value yourself.
- Missing May 1. The $25 penalty plus interest applies even if the corporation had little activity during the year.
- Using a P.O. Box as the registered agent address. The agent address must be a street address in Arkansas.
Corporate Income Tax Is a Separate Obligation
The DFA corporate income tax is graduated for tax years beginning on or after January 1, 2024. The rates are 1.0% on the first $3,000 of net income, 2.0% on the second $3,000, 3.0% on the next $5,000, and 4.3% on all net income over $11,000. The top rate drops to 4.1% for tax years beginning on or after January 1, 2027.
Do not treat the franchise tax report as a substitute for an income tax filing. Check your income tax obligation with DFA or a CPA.
Confirm These Details Before You File
- Arkansas Secretary of State, Business and Commercial Services Division: sos.arkansas.gov/business-commercial-services-bcs
- Corporations Online Filing System: ark.org/sos/corpfilings
- Business entity search: sos.arkansas.gov/corps/search_all.php
- Arkansas Department of Finance and Administration: dfa.arkansas.gov
- Arkansas Small Business and Technology Development Center: asbtdc.org
Verify the rates, the report form, and the penalty interest with the Secretary of State before you file, because those details can change.
Disclaimer
This guide is informational content, not legal or tax advice. Franchise and income tax treatment depends on your corporation's specific facts. Consult a qualified attorney or CPA for complex situations, including foreign corporations with mixed in-state and out-of-state assets, insurance corporations, mortgage loan corporations, and corporations with multi-state income.