Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 207 3
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By: Senator B. Johnson 5
By: Representative Richmond 6
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For An Act To Be Entitled 8
AN ACT TO MODIFY THE ARKANSAS CORPORATE F RANCHISE TAX 9
ACT OF 1979; AND FOR OTHER PURPOSES. 10
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Subtitle 13
TO MODIFY THE ARKANSAS CORPORATE 14
FRANCHISE TAX ACT OF 1979. 15
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 18
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SECTION 1. Arkansas Code § 4 -27-1622(a)(4), concerning the location of 20
a corporation's principal office for annual franchise tax reports under the 21
Arkansas Business Corporation Act of 1987, is amended to read as follows: 22
(4) the address of its principal office, as defined in § 4-27-23
140, wherever it is located; 24
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SECTION 2. Arkansas Code § 26 -54-102(a), concerning the definition of 26
"corporation" used in the Arkansas Corporate Franchise Tax Act of 1979, is 27
amended to read as follows: 28
(a) As used in this chapter, “corporation” means any corporation or 29
limited liability company , domestic and foreign, active and inactive, which 30
is organized in or qualified under the laws of the State of Arkansas and 31
includes, but is not limited to, any person or group of persons, any 32
association, joint-stock company, business trust, or other organizations with 33
or without charter constituting a separate legal entity of relationship with 34
the purpose of obtaining some corporate privilege or franchise which is not 35
allowed to them as individuals and which is exercising, or attempting to 36 SB207
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exercise, corporate-type acts, whether or not existing by virtue of a 1
particular statute. 2
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SECTION 3. Arkansas Code § 26 -54-104 is amended to read as follows: 4
26-54-104. Annual franchise tax. 5
(a) Unless exempted under § 26 -54-105, every corporation shall file an 6
annual franchise tax report and pay an annual franchise tax as follows: 7
(1)(A) Each life, fire, accident, surety, liability, steam 8
boiler, tornado, health, or other kind of insurance company of whatever 9
nature, having an outstanding capital stock of less than five hundred 10
thousand dollars ($500,000) shall pay three hundred dollars ($300). 11
(B) Each company having an outstanding capital stock of 12
five hundred thousand dollar s ($500,000) or more shall pay four hundred 13
dollars ($400); 14
(2)(A) Each legal reserve mutual insurance corporation having 15
assets of less than one hundred million dollars ($100,000,000) shall pay 16
three hundred dollars ($300). 17
(B) Each corporation hav ing assets of one hundred million 18
dollars ($100,000,000) or more shall pay four hundred dollars ($400); 19
(3) Each mutual assessment insurance corporation shall pay three 20
hundred dollars ($300); 21
(4)(A) Each mortgage loan corporation shall pay an amount 22
equivalent to three-tenths of one percent (0.3%) of that proportion of the 23
par value of its outstanding capital stock that its aggregate outstanding 24
loans made in Arkansas bears to the total aggregate outstanding loans made in 25
all states. 26
(B) No corporation shall pay an annual tax of less than 27
three hundred dollars ($300); 28
(5) Each corporation, other than those in subdivisions (2) -(4) 29
of this section, without authorized capital stock shall pay three hundred 30
dollars ($300); 31
(6)(A) Each corporation , other than those in subdivisions (1) -32
(5) of this section, shall pay an amount equivalent to three -tenths of one 33
percent (0.3%) of that proportion of the par value of its outstanding capital 34
stock that the value of its real and personal property in Arkans as bears to 35
the total value of the real and personal property of the corporation. 36 SB207
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(B) No corporation shall pay an annual tax of less than 1
one hundred fifty dollars ($150); 2
(7) Each corporation actually and actively in the process of 3
liquidation and which does not rent or lease its property but which retains 4
its corporate charter or authority for the sole purpose of winding up its 5
affairs shall pay an annual tax as provided in subdivision (6) of this 6
section or an amount equivalent to three -tenths of one percent (0.3%) of the 7
value of its real and tangible personal property in Arkansas, whichever is 8
smaller, but in no instance shall the tax be less than one hundred fifty 9
dollars ($150); and 10
(8) An organization formed pursuant to the Uniform Limited 11
Liability Company Act, § 4 -38-101 et seq., shall pay the minimum franchise 12
tax. 13
(b)(1) In addition to the filing fees prescribed by law, the Secretary 14
of State shall collect a processing fee for each document required under this 15
chapter when delivered by electronic means. 16
(2) The processing fee collected by the Secretary of State under 17
subdivision (b)(1) of this section shall be: 18
(A) Four dollars ($4.00) when the filing fee is fifty 19
dollars ($50.00) or less; 20
(B) Five dollars ($5.00) when the fi ling fee is between 21
fifty-one dollars ($51.00) and one hundred sixty -seven dollars ($167.00); and 22
(C) Three percent (3%) of the total amount of the filing 23
fee if the filing fee is more than one hundred sixty -seven dollars ($167.00). 24
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SECTION 4. Arkansas Code § 26-54-105(a)-(c), concerning the filing of 26
a franchise tax report under the Arkansas Corporate Franchise Act of 1979, is 27
amended to read as follows: 28
(a)(1) The Secretary of State shall furnish report forms notice to 29
each corporation subject to this chapter by mailing or emailing them the 30
notice to the corporation's current agent for service or other person 31
identified by the corporation. 32
(2) When filing the franchise tax report, a corporation may 33
state who is to receive a franchise tax form t he following year if that 34
person is different from the agent for service on file for the corporation at 35
that time. 36 SB207
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(b) A corporation that fails to receive the report forms the notice 1
under subdivision (a)(1) of this section by March 20 of the reporting y ear 2
shall make written request for them the notice to the Secretary of State on 3
or before March 31. 4
(c)(1) Each corporation subject to the requirements of this chapter 5
shall file a franchise tax report with the Secretary of State that shows the 6
condition and status of the corporation as of the close of business on the 7
last day of the corporation's preceding fiscal year calendar year and other 8
information required by the Secretary of State. 9
(2)(A) The franchise tax as computed on the report shall be 10
remitted with the franchise tax report. 11
(B) The franchise tax as computed on the report shall be 12
remitted with the franchise tax report on or before May 1 of the reporting 13
year for franchise tax due. 14
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SECTION 5. Arkansas Code § 26 -54-105(g) and (h), concerning the 16
requirements of a franchise tax report under the Arkansas Corporate Franchise 17
Act of 1979, is amended to read as follows: 18
(g)(1) Every franchise tax report shall contain the following 19
statement: 20
“I declare, under the penalties of perjury, that the foregoing statements are 21
true to the best of my knowledge and belief.” 22
(2) The statement shall be signed by the president, vice 23
president, secretary, treasurer, or controller of the corporation or any 24
other authorized person individual as determined by the Secretary of State . 25
(h)(1) All information contained in a franchise tax report shall be 26
confidential and not available for public inspection, except for the 27
following Only the following information contained in a franchise tax report 28
shall be available for public inspection : 29
(A) The name and address of the corporation; 30
(B) The name of the corporation's president, vice 31
president, secretary, treasurer, and controller; 32
(C) The total authorized capital stock with par value; 33
(D) The total issued and outstanding capital stock with 34
par value; and 35
(E) The state of incorporation. 36 SB207
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(2) In the case of a franchise tax report filed by an 1
organization formed under the Uniform Limited Liability Company Act, § 4 -38-2
101 et seq., the names of members, except those designated in the 3
organizations' franchise tax report as a manager, president, vice president, 4
secretary, treasurer, or controller of the organization, shall be 5
confidential and not available for public inspection unless the organ ization 6
has no registered agent for service of process. 7
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SECTION 6. Arkansas Code § 26 -54-107(b)(2), concerning the penalty for 9
failure to file and remit a franchise tax report under the Arkansas Corporate 10
Franchise Tax Act of 1979, is amended to read as follows: 11
(2) On or before November 1 of each year, the Secretary of State 12
shall mail notice to the corporation at its last known address stating that 13
the corporation is subject to forfeiture revocation of its corporate charter 14
under § 26-54-111 for the failure to pay corporate franchise tax. 15
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SECTION 7. Arkansas Code § 26 -54-111 is amended to read as follows: 17
26-54-111. Charter forfeiture revocation for failure to pay tax — 18
Procedure. 19
(a) On or before January 31 of each year, the Secretary of State shall 20
proclaim as forfeited revoked the corporate charters or authorities of all 21
corporations, both domestic and foreign, that according to the Secretary of 22
State's records are delinquent in the payment o f the annual franchise tax for 23
a prior year. 24
(b)(1) A copy of the proclamation under subsection (a) of this 25
section, or applicable portion thereof, shall be furnished to each other 26
official or agency of the state that is authorized to issue corporation 27
charters or authorities. 28
(2) Upon their receipt of the proclamation, the several 29
officials shall at once correct their respective records in accordance with 30
the proclamation. 31
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SECTION 8. Arkansas Code § 26 -54-112 is amended to read as follows: 33
26-54-112. Reinstatement of corporations. 34
(a)(1)(A)(i) A corporation whose charter or permit authority to do 35
business in the state has been declared forfeited revoked by proclamation of 36 SB207
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the Governor or the Secretary of State may be reinstated to all its rights, 1
powers, and property. 2
(ii) Reinstatement shall be retroactive to the time 3
that the corporation's authority to do business in the state was declared 4
forfeited revoked. 5
(B) The reinstatement shall be made after the filing of 6
all delinquent franchise tax reports satisfactory to the Secretary of State 7
and the payment of all taxes and penalties due for each year of delinquency. 8
(2) However, reinstatement is not allowed after seven (7) five 9
(5) years from the date the charter or permit author ity to do business in the 10
state if the corporation was is declared: 11
(A) forfeited Revoked by proclamation of the Governor or 12
the Secretary of State ; and 13
(B) A forfeited charter . 14
(b) If the Secretary of State issued the original corporate charter, 15
permit, or authority, the Secretary of State shall reinstate the corporation 16
upon payment by the corporation of all amounts due, as provided in subsection 17
(a) of this section. 18
(c)(1) If the original corporate charter, permit, or authority was 19
issued by an official other than the Secretary of State, the official shall 20
reinstate the corporation upon the corporation's filing with the official the 21
receipt of the Secretary of State showing payment of all amounts due, as 22
provided in subsection (a) of this sect ion. 23
(2) Thereafter, the corporation shall stand in all respects as 24
though its name had never been declared forfeited revoked. 25
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SECTION 9. Arkansas Code § 26 -54-114 is amended to read as follows: 27
26-54-114. Nonpayment of franchise taxes — Definitions. 28
(a) A corporation or limited liability company is not allowed to file 29
any forms or documentation related to that corporation or limited liability 30
company if the corporation or limited liability company owes owing past-due 31
franchise taxes to the Secret ary of State may not: 32
(1) File forms or documents related to that corporation or 33
limited liability company; 34
(2) Create a new legal entity in this state; or 35
(3) Obtain authority to do business in this state . 36 SB207
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(b) A person or individual is not allowed to file any initial forms or 1
documentation with the Secretary of State to create any legal entity in the 2
State of Arkansas or to obtain authority to do business in the State of 3
Arkansas if that person is substantially connected to any corporation or 4
limited liability company that owes past -due franchise taxes to the Secretary 5
of State may not: 6
(1) File forms or documents related to that corporation or 7
limited liability company; 8
(2) Create a new legal entity in this state; or 9
(3) Obtain authority to do business in this state . 10
(c) As used in this section: 11
(1) “Past-due franchise taxes” means only those taxes owed three 12
(3) years prior to the year in which the current filing is presented; 13
(2) “Past officer or director” means a person or individual who 14
was associated with the corporation or limited liability company during the 15
at any time that its charter was revoked during its charter that the 16
corporation or limited liability company was r esponsible for nonpayment of 17
franchise taxes; and 18
(3) “Substantially connected” means a present officer , or 19
director, member, or manager or a past officer, or director, member, or 20
manager of a corporation. 21
(d) An individual who is an incorporator or o rganizer of a corporation 22
or limited liability company shall not be considered to be substantially 23
connected to a corporation or limited liability company that owes past -due 24
franchise taxes to the Secretary of State. 25
(e) Each corporation, subject to this chapter, shall file with its 26
original articles of incorporation or certificate of organization the name of 27
at least one (1) individual who is substantially connected to the corporation 28
and is responsible for payment of franchise taxes. 29
(f) Any current or past officer or director that has been added to a 30
corporation without their permission shall be removed as an officer or 31
director of the corporation by the Secretary of State and not held 32
responsible for past -due franchise taxes, if the officer or direct or submits: 33
(1) A copy of a report filed with a local, state, or federal law 34
enforcement entity that states the officer or director has been fraudulently 35
added to the corporation; and 36 SB207
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(2) A statement, prescribed by the Secretary of State, signed by 1
the officer or director, that states the officer or director was added to the 2
corporation without their permission, with the following declaration: 3
"I declare, under the penalties of perjury, that the foregoing statements are 4
true to the best of my knowledg e and belief." 5
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SECTION 10. Arkansas Code Title 26, Chapter 54, Subchapter 1, is 7
amended to add an additional section to read as follows: 8
26-54-116. Powers of Secretary of State. 9
The Secretary of State is authorized to perform any of the duties that 10
are required of him or her under this chapter. 11
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