LLC tax requirements arkansas [With Tutorial]



Last updated : Aug 11, 2022
Written by : Shaun Denmark
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LLC tax requirements arkansas

How is an LLC taxed in Arkansas?

State Business Tax By default, LLCs themselves do not pay federal income taxes, only their members do. However, as mentioned above, Arkansas imposes an annual $150 franchise tax on LLCs for the privilege of doing business in the state.

What is needed for a LLC in Arkansas?

To officially form your LLC in Arkansas, you'll need to file the Certificate of Organization with the Arkansas Secretary of State and pay a $50 filing fee ($45 online). First, you must choose your company name, designate a registered agent, and acquire an Employer Identification Number (EIN) from the IRS.

Do you have to file an annual report for an LLC in Arkansas?

§ 26-54-101 et al., also known as the “Arkansas Corporate Franchise Tax Act of 1979”, requires all Corporations, LLC's, Banks, and Insurance Companies registered in Arkansas to pay an annual franchise tax.

How do you avoid taxes with an LLC?

An LLC can help you avoid double taxation unless you structure the entity as a corporation for tax purposes. Business expenses. LLC members may take tax deductions for legitimate business expenses, including the cost of forming the LLC, on their personal returns.

What is the self employment tax rate for Arkansas?

The current self-employment tax rate is 15.3 percent. You'll be able to deduct some of your business expenses from your income when calculating how much self-employment tax you owe.

How much are business taxes in Arkansas?

Arkansas also has a 1.0 to 5.9 percent corporate income tax rate. Arkansas has a 6.50 percent state sales tax rate, a max local sales tax rate of 6.125 percent, and an average combined state and local sales tax rate of 9.47 percent. Arkansas's tax system ranks 44th overall on our 2022 State Business Tax Climate Index.

How much does an LLC cost in Arkansas?

How much does it cost to form an LLC in Arkansas? The Arkansas Secretary of State charges a $45 fee to file the Articles of Organization online and $50 if filed by mail. You can reserve your LLC name with the Arkansas SOS for $25 if filed by mail or $22.50 if filed online.

Does Arkansas recognize single member LLC?

Arkansas LLC Organizers: An Arkansas limited liability company can be formed by one (1) or more individuals. Arkansas LLC Members: Arkansas LLCs require 1 or more members.

Does Arkansas require a business license?

Along with many states, Arkansas does not require every business to obtain a generic business license at the state level. The only statewide permit or license applicable to most businesses is the Arkansas sales tax permit, often called a seller's permit, which registers your business for the Arkansas sales and use tax.

How much does it cost to file an annual report in Arkansas?

The specific costs of filing an annual report in Arkansas depends upon the type of company that is filing the report. The basic costs are as follows: Corporations – $150 with outstanding stock, $300 without stock. LLCs – $150.

What happens if you don't pay franchise tax Arkansas?

If you don't pay your Arkansas Franchise Tax for three years, your LLC will enter revoked status.

Who Must File Arkansas tax return?

Part year residents who received any gross income while an Arkansas resident must file a return (regardless of marital status, filing status, or amount). *Gross income is all income (before deductions) other than income specifically described as exempt on pages 9 and 10 “Exempt From Income Tax.”

What is the downside of an LLC?

Disadvantages of creating an LLC Cost: An LLC usually costs more to form and maintain than a sole proprietorship or general partnership. States charge an initial formation fee. Many states also impose ongoing fees, such as annual report and/or franchise tax fees. Check with your Secretary of State's office.

How much can an LLC write off?

If you have $50,000 or less in startup costs and are in your first year of business, the IRS allows you to deduct $5,000 in startup costs and $5,000 in organization costs from your taxes. If your startup expenses exceed $50,000, the total deduction will be reduced by however much your expenses exceed $50,000.

What can I write off as an LLC?

  1. Car expenses and mileage.
  2. Office expenses, including rent, utilities, etc.
  3. Office supplies, including computers, software, etc.
  4. Health insurance premiums.
  5. Business phone bills.
  6. Continuing education courses.
  7. Parking for business-related trips.

Is Arkansas doing away with state income tax?

Today, with the signing of the most recent tax cuts, the state income tax will be lowered to 4.9%, the lowest in Arkansas history. This tax cut bill comes just eight months after the largest income tax cut in state history in December 2021.

Is Arkansas a tax friendly state?

According to the Tax Foundation (opens in new tab), Arkansas has the third-highest average combined state and local sales tax rate in the nation. But, overall, Arkansas is a tax-friendly state for retirees.

Does Arkansas have a business income tax?

Arkansas has both a corporation franchise tax and a graduated corporate income tax. Your business may be subject to one, both, or neither of these taxes depending on its legal form.

How do I pay my business taxes in Arkansas?

New users sign up at www.atap.arkansas.gov or click on the ATAP link on our web site www.dfa.arkansas.gov. ATAP is a web-based service that allows taxpayers, or their designated representative, online access to their tax accounts and related information.

How do I pay sales tax for my business in Arkansas?

  1. File online – File online at the Arkansas Taxpayer Access Point (ATAP). You can remit your payment through their online system.
  2. File by mail – You can use Form ET-1 and file and pay through the mail.
  3. AutoFile – Let TaxJar file your sales tax for you.


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LLC tax requirements arkansas


Comment by Kenda Orser

hey my name is eric and in today's video we're going to talk about how to set up an llc in arkansas so one of the important things about this video though is we're going to be talking about more than just setting it up but how to make sure that your llc is legit and if you're not familiar with terms such as piercing the corporate veil registered agent or co-mingling funds you're going to want to watch this entire video because i'm going to walk through each of these items and explain why they're really important towards your llc to make sure that there are no cracks in it so one of the first things i want to do is go to the state website which you can see on the screen right here and one of the things that you're probably curious about is like what is the cost of setting up an llc so if we click here you can see that the online fee is 45 and the paper fee is 50. if you go to the paper fee right here it kind of lays everything out here for you this is what you'd be filling out but just know that that 45 50 bucks there's no way to get around that if you're going and hiring an attorney to set up your llc you're gonna spend that fifty dollars if you're doing yourself through the state website or an online legal tool you're gonna spend that 45 to 50 bucks to get set up but one of the things i wanted to highlight here you can see that you know there's a lot of questions on this uh pdf and one of the things they don't like about the state websites is they don't do the best job of explaining everything so a good example of that is number three it says the name and address of the registered agent of this company shall be and then there's no like context or information for what that is so what a registered agent is is a third party that exists within your state and they perform several different tasks and duties for your business now there's a nice article here on ink file if you're not familiar with ink file it's an online legal tool you can set up your llc on there as well but if we scroll down here they have a five bullet point list of what registered agent does so it's official letters and correspondence from your secretary of state a service or process notices so if you were to be sued making sure that you're showing up to court and getting all the proper documentation official federal government correspondence information and notifications tax forms and requests for payment and request to complete permits company filings or reports so what a registered agent does is basically helps you dot your eyes and cross your t's and making sure that you're compliant with your llc now the reason that's so important is what an llc actually does like if you can think of it in this terms your business has assets it might be you know the inventory the desk computers uh actual finances of your bank account you have business assets but when you create an llc you draw a division between your business and your personal assets because your personal assets you have your personal car home personal bank accounts now that division between the two that is what's called the corporate veil now if you remember at the beginning of this video we talked about piercing the corporate veil that is essentially legal jargon that means that if you were to be in the unfortunate circumstance that you were sued what the attorney is going to do trying to sue you is pierce the corporate veil and basically what they're trying to do is find cracks in your llc so if they're able to find a crack in your llc what they could potentially do is not only come after your business assets but also your personal assets so your personal car home and bank accounts so that's why your llc is really important but it's also really important to make sure that it is set up correctly so having that professional registered agent is going to help you make sure that you are doing things correctly with your llc because it's really really important so i want to take a moment to talk about when you would hire an attorney now this is just my personal opinion i am a small business owner who has had to go through a lot of these growing pains and frustrations that you're thinking about getting into and i can say when you get to the other side it's worth it because owning your own business is a tremendous thing and if you have a complicated system right this is the way it was explained to me by an attorney uh if your business is doing sales in and out of state you're going to have to get into things such as domestic and foreign llcs another thing you might want to consider is if your business is already netting over 50 000 of net profit right the reason that you might want to talk to an attorney in that situation is the business structure that you have you might be able to save on taxes at that point but for most people setting up an llc which is most people because 85 percent of all new business entities are llc's um they just go with the simple route of setting up an llc and as your business profits grow that's when you can kind of get creative with your structures and what you want to do to help save on taxes but for the most part most people are fine going the online route but again if you have a complex business or if you have a high amount of liability for your business so what i mean by that is if you were to open up a comic book store right and you're just going to sell comic books not a lot of liability in that situation but if somebody else was considering starting a tree trimming service right there's a ton of liability in that service there's your own employees that could get injured you could drop a tree on somebody's car house or whatever it may be so if you have a business that has a high amount of liability uh naturally with that business you may want to consult with an attorney as well so just think about how much money you're making today if it's over 50 000 of net income you might want to talk to an attorney who's also a tax specialist uh if your business has a lot of liability naturally you might want to talk to an attorney and then the third reason is if you're doing sales in and out of state already so what i want to talk about at this junction of the video is different ways that you can go about setting up your llc as i mentioned if you go through the state website which all the links that i'm mentioning will be in the description below including this one uh you can get set up through the state but one of the things that i like about going through a service like ink file is if you take a look at your state filing fees here and you scroll down you'll see arkansas 50 bucks so it's the same as if you were to do the pdf filing with arkansas but the really neat thing is if you go back to the home page you can see here they've started over 500 000 businesses since 2004 if you click start my business is you can put in llc and then your state of formation so we're down to arkansas but if you look in the silver package the starter package here you can see that it's just 50 so there's no package fee whatsoever so you might be wondering like i was like why would they have a package that actually has


Thanks for your comment Kenda Orser, have a nice day.
- Shaun Denmark, Staff Member


Comment by Raphael

hello my beautiful people issue girl kg and I am back yet again with another video today I'm going to be dropping this gym on what's needed in order for you to start your very own business and one of the things that's needed is you have to file your business with the state that you live in as well as apply for your employee identification number but with that being said we're gonna get straight into the video and I'm going to explain to you how it's done so if you were to go to Google and just say put in how to file an LLC and whatever state you live in and I currently reside in the state of Arkansas you'll notice that you have all of these different third-party websites that will literally charge you one two three hundred dollars for something that would cost you about fifteen I don't know about you but I like to save money so I just wanted to do all that because they will try to get your money if you let them and so I do not have to go do a party to open a business you can do it yourself so since I currently reside in the state of Arkansas what I did was I just go to Arkansas dot-gov is there and bring you to this website and make sure when you're going to these different websites that you pay attention to the suffix at the end of the website that is very important so you're going to scroll down to business and Arkansas it's like to bring me to this screen this is starting a new business you want to click here on this hyperlink that says the Arkansas Secretary of State and it's going to redirect you to another page you want to click on oops you want to click up at the top where it says business God says over the top Arkansas Secretary of State John Thurston and the pre I'm sorry the sub fix at the end says go if you want to scroll down you can read all of this information entry to discussion basically what it's saying is due to the coronavirus any inquiry is that you may have have to be submitted via phone by calling this phone number or emailing you're not able to just walk down to the Capitol and go in and ask any question that you have okay so you're gonna go down to where it says form and penis and depending on what type of business you're opening best describes what kind of form that you're gonna be filling out you have to open up corporations or S corporation partnership sole proprietorships but for the sake of this video I'm going to be showing you all how to open an LLC I believe it's the most common for small business owners you have any questions about the different types or you're not sure which type it is that you're trying to open but you can click on these people yes and it'll give you more information that you may have you could always research so you choose one is better for you so you click on LLC and scroll down you see where it says article of organizations for a domestic limited liability company or LLC and domestic means that it only operates in the state of Arkansas it gives you the option to do it online or submit a PDF it is five dollars more if you want to print it out and send in a money order for payment so we're going to click here online it's going to redirect me to yet another screen and it says domestic for property and domestic for non property I believe either for opening charities don't hold me on that we're looking for domestic LLC you click on start form and it brings you to this screen as filing at it's already pre-selected if you know specifically that you need to file a different act you do have the option of changing this I don't know what this means so I'm not gonna get into it but the one that I'm looking for is pre-selected and then you're going to continue scrolling and they ask you to enter in your business name when you enter in the business name basically what it's saying here in this here in the small print is that you need to put the words LLC so say if you were to open up dogs and puppies it just has to have LLC at the end notice how company name has an asterisk where his manager statement is there is no ash-tree meaning this is required in order to complete the form whereas this is optional as we continue to scroll don't let any of this like information that is asking you to it's enter confuse you because depending on how many people are help you operate your business or solely if it's just you you're literally just re-entering in your information multiple times so since I'm the only one that is in my business I'm the only employee I'm the boss and the employee I would enter in my information here with asking for principal information it says you can either enter your entity name which means the name of your business or your first name but you do not need to put both and then I asked me for an address if you're using your home address which I did that's perfectly fine or you have a business office you can enter it in here I don't have one as a yes I just put up my home address and asked you for the registered agent you can read what this means it's just basically like if they have to send important documents who is going to so I put my information here again if there are different officers who help you run the business you would put in their information and then click save officer and it'll let you enter in more than one the submitter information where I enter in yet again my information and I would just like to say as a disclosure make sure you need to make sure the whole form is filled out correct but especially here where it's asking you for your phone number and your email address because they are gonna email you the certificate and I would suggest strongly that you put in your business email address so that you have a specific place or your business information versus your personal information then as we continue to scroll it asked for the angular report contact information if you have a bookkeeper or a accountant this would be where you entering their information but yet again since I'm the only one I put in my information and then like if I need to go to someone personally and have them follow my business taxes for me I can and then it's gonna ask you to sign and agree the date is already selected today's date and then you put it out here understand and make sure that it's legit because you don't want to be fine or ended up in prison so you sign and you hit submit and then it's gonna redirect you to a page where you can submit your payment be a credit card or debit card and so once you complete that I believe they quote three to five business days for you to receive the certificate I received mine the very next day I did it on a Friday and then I received it only Tuesday you see where it says articles of organization rich girl vibe loc this was filed in this office on this state we have his John Thurston's name and signature and so after you've done that the next thing you're gonna do need to do is file for an employee identification number or a EIN number and that's what you need if you're interested in opening up a bank account a business bank account or save you wholesale like clothes or something like that when you go to certain websites they will request that you put i


Thanks Raphael your participation is very much appreciated
- Shaun Denmark


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