Every year, LLC company owners are required by the Arkansas State law to file for their LLC Annual Franchise Tax Report.
In this case, filing an LLC Annual Franchise Tax Report is essential for compliance and maintaining a good record with the government. Likewise, another reason for this is to avoid the dissolution of your LLC company. The Annual Franchise tax helps the Arkansas Government to generate revenue from state businesses.
With that said, this article will guide you through the steps of filing your Annual Franchise Tax report in Arkansas.
When to File Your LLC’s Annual Franchise Tax Report?
The Annual Franchise Tax Report should be filed every year from the time you filed your LLC initial report. The Annual Franchise Tax Report must be submitted by the 1st of May of every year. To avoid forgetting your Annual Franchise Tax Report filing, you must always include it on your calendar of activities.
For example, you can create a reminder on your phone or calendar to help you remember around one to two months before the due date to avoid missing the filing.
On the other hand, if it’s your first year to file for LLC Annual Franchise Tax Reports, it’s due the following year after the approval of your LLC application.
For example, suppose your company was established and certified on September 9, 2020. In that case, your first LLC Annual Franchise Tax Report is considered due on May 1, 2021.
Similarly, if you want to double-check the date when the state approved your LLC, it’s best to check your LLC’s Certificate of Formation. You can also check the filled date in the business entity search of the State of Arkansas.
The State of Arkansas provides a mailed postcard reminder to the address of the LLC contact person as it is written in the LLC Articles of Organization. This reminder is a courtesy reminder of the Franchise Tax.
What Are the Requirements You Need to Prepare?
Before you file, make sure that you have these documents or information prepared. Preparing these documents beforehand can help prevent any delays during the process.
- State-issued LLC entity number
- Date of organization
- Arkansas Business EIN (entity identification number)
- Other important details about your company, such as:
- Your registered agent
- Its registered office address
- Officers/directors or partners updated contact information
- Insurance policy information including your proof of insurance, the insurance company’s name, the insurer’s name, and the policy date.
- Your signature and title if you are the one filing the report.
- 150 USD filing fee, this cost is a constant for all businesses regardless of if you make a profit or not, or if you perform business activities or not.
What Will Happen If I Don’t File My Company’s LLC Annual Franchise Tax Report?
Not filing your company’s LLC Annual Franchise Tax Report in Arkansas will result in the administrative dissolution (by revoking the Corporate Charter of your LLC) of your company by the State of Arkansas. However, you’ll be penalized with a one-time fee of $25 and then the interest is calculated at 10 percent for each year on all of the remaining balance as outlined in this section of the Arkansas Law.
Where to File the LLC Annual Franchise Tax Report?
Fortunately, filing your company’s LLC Annual Franchise Tax Report is now easier. You can file your LLC Annual Franchise Tax Report online with the Arkansas Secretary of State. The state also allows for the submission of hardcopy through the mail. For this, you will download the forms on the Secretary of the State of Arkansas Franchise tax/Annual report webpage. Complete the LLC PDF form, pay through money order or check (payable to the Arkansas Secretary of State) and then mail the proof of payment and the completed forms to the address:
Arkansas Secretary of State, Business and Commercial Services Division, PO Box 8014, Little Rock, AR 72203-8014.
How to File Your LLC Annual Franchise Tax Report: A Step-by-Step Guide
To help you file your company’s LLC Annual Franchise Tax Report online, this article has outlined the steps of the process. Check them out below.
Step 1: Go to the Arkansas Business Entity webpage and search for your LLC name and then choose the Pay for the Franchise Tax for this Corporation option at the bottom of the page
Step 2: Input your LLC Entity number (which should have been auto-filled) and your Federal EIN (you can input 9 zeros if you don’t have one yet) click on the “show available filings” option.
Step 3: Choose the appropriate year for which you want to file the Franchise tax report. Make any other changes if needed like the LLC members, registered agent, etc.
Step 4: choose if your LLC is manager or member-managed. Enter the name of all the members and managers and designate each name as appropriate. After this, enter your name in full and sign in the signature box to agree to the terms. Then you can scroll to the bottom and click the next button
Step 5: After this, you’ll be taken back to the beginning to review the information you have given. You can go back to make edits or you can proceed to the payment section
Step 6: Once you’re done, you need to enter your billing information, phone number, email address and then click “Continue” to make the payment. Note that an additional $3 to $5 fee may be added to your total as the processing fee. Click on the Confirm option to submit the payment.
Your Annual Franchise Tax Report will be submitted after you have successfully made the payment and you will see a message congratulating you on filing your biennial LLC report in Arkansas after paying. You can download a copy of your receipt on this page and keep it for your business record. Another copy of the receipt will be sent to your email for record purposes.
What Is the Difference Between an LLC Annual Franchise Tax Report and LLC Partner Tax?
Most company owners mistake LLC Annual Franchise Tax Report and LLC Partner Tax as being the same. Due to this misconception, they either miss filing one or the other. If you have multi-member LLCs, which means you have two or more owners, you must file for LLC Partner Tax.
Other Transactions You Can Do Under the Annual Franchise Tax Reports and Change Services
Aside from filing your company’s LLC Annual Franchise Tax Report, here are the other business documents that can be generated through the Annual Franchise Tax Reports and Change Services:
- Changing of registered agent/office
- Reinstating a business entity
- Closing a business
There are two possible reasons you might want to change your LLC’s assigned registered agent. First, you are dissatisfied with your existing agent and would like to change services. Second, you are your own agent and would like to get the services of a registered agent.
Regardless of the reason, you’ll need a registered agent for your company. This is because an LLC licensed agent plays a vital role in every company. In this case, your registered agent is the official representative of your company.
For example, suppose the state needs to contact your company for some legal matters. In that case, there should be an authorized representative where they can send legal documents.
- Reinstating a business entity
One reason for filing a reinstatement is that your LLC faced dissolution due to non-filing of the Annual Franchise Tax Report or paying taxes.
Of course, aside from these, some of the other tasks you can perform in the Annual Franchise Tax Reports and Change Services:
- File an amendment
- Business name search
- Change tax/Employer registration record
Finally, you now know how to file your company’s LLC Annual Franchise Tax Report in Arkansas. Making sure you comply with this requirement is essential to avoid penalties or the dissolution of your company.
In this case, to avoid forgetting your Annual Franchise Tax Reporting, it’s best to organize your calendar. In fact, it’s recommended to set a reminder two months before your date of filing.
After all, as a business owner, it’s your responsibility to abide by the government’s ordinance to avoid penalties for your company.