Arkansas
Taxes and business formation • USA 2025–2026
TL;DR
Arkansas at a glance — 2026 figures
State filing fees and tax position for individuals and companies registered in Arkansas.
| Parameter | Value |
|---|---|
| Personal income tax | See the income tax section below |
| LLC formation fee | $150.00 |
| LLC annual report fee | $50.00 |
| LLC annual report deadline | May 1 |
| LLC dissolution fee | |
| Corporation formation fee | $150.00 (minimum) |
| Corporation annual report fee | $50.00 |
State filing fees are set by the Secretary of State and change without notice — the official source is linked in each section below. Federal figures for tax year 2026 are on the 2026 tax cheat sheet.
Updated: August 2026
Corporation in Arkansas
Tax system of Arkansas
Income Tax
Arkansas uses a progressive personal income tax with several brackets. For 2025, rates range from 2% to 4.4% depending on income level. Since 2023 the state has been gradually reducing its tax burden, moving toward a simpler structure. All major types of income are taxed: wages, investments, capital gains, and rental income.
Sales Tax
The base sales tax rate in Arkansas is 6.5%. Cities and counties can add local surcharges, so the combined rate can reach up to 11.625% — one of the highest combined rates in the U.S. The tax applies to the sale of most goods, digital products, commercial property rentals, and a number of services, including telecommunications and construction. Groceries are taxed at a reduced rate. Determining the taxable base and the correct sales tax rate can be quite complex and requires a professional approach and knowledge of state law. Our firm provides services for obtaining a Sales Tax Certificate and for preparing and filing the Sales and Use Tax Return. We advise business owners on all matters related to this tax, including registration, calculation, and reporting.
Property Tax
Arkansas does not levy a property tax at the state level — it is the prerogative of counties and school districts. The average effective rate is about 0.61% of market value, which is below the national average.
Business Taxes
C-corporations are subject to a progressive corporate income tax ranging from 1% to 5.3% (the top rate applies to profits above $25,000). Arkansas also levies a Franchise Tax that applies to all corporations and LLCs registered in the state. The amount depends on the capital structure and entity type but is no less than $150 per year. An Annual Report is mandatory for corporations and LLCs and is filed with the Secretary of State, due each year by May 1. Businesses are also required to file tangible personal property returns if asset values exceed the threshold. Our firm provides services for LLC and corporation registration in Arkansas, Annual Report preparation, Franchise Tax calculation, and selection of the optimal tax structure for the business.
Excise Taxes
Arkansas levies excise taxes on alcohol, tobacco, gasoline, diesel, car rentals, and gaming machines.
Favorable Tax Conditions
Arkansas offers moderate and straightforward conditions for individuals and small businesses: • Low property tax, • A moderate personal income tax that is trending downward, • A relatively low corporate tax, • No estate tax, • A fairly simple filing regime for Annual Reports and tax returns.
Compared to Other States
• Sales Tax is among the highest in the country on a combined basis (up to 11.625%), • The personal income tax is lower than in California or New York but higher than in Florida or Texas (which have none), • Property tax is lower than in most states, • A Franchise Tax is mandatory, as in Delaware and Texas, • The Annual Report is mandatory but relatively simple in form.
Frequently asked questions
Does Arkansas have a personal income tax?+
Yes. Arkansas levies a personal income tax on residents. The current rates and brackets are set out in the income tax section on this page, with a link to the state tax authority — rates are revised by the legislature, so always check the official source before filing.
How much does it cost to register an LLC in Arkansas?+
The state filing fee in Arkansas is $150.00. On top of that you need a registered agent with a physical address in the state, and FinTaxes charges from $299 for the formation service itself.
When is the annual report due for a Arkansas LLC?+
The Arkansas annual report fee is $50.00, due May 1. Missing it typically triggers a late penalty and, if left unresolved, administrative dissolution of the company.
Do I need to live in Arkansas to open an LLC there?+
No. You do not need to live in Arkansas — or in the United States at all — to own an LLC registered there. Non-residents can form and own a US LLC; what the state requires is a registered agent with a physical in-state address. Your own tax residency is a separate question and decides which returns you file.
Can FinTaxes file my Arkansas state return remotely?+
Yes. FinTaxes prepares and e-files federal and Arkansas state returns entirely remotely, for clients anywhere in the US or abroad, as an Authorized IRS e-file Provider.
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