Stricken language would be deleted from and underlined language would be added to present law.
Act 459 of the Regular Session
*ANS117* 03-15-2023 09:42:48 ANS117
State of Arkansas As Engrossed: H3/15/23 1
94th General Assembly A Bill 2
Regular Session, 2023 SENATE BILL 207 3
4
By: Senator B. Johnson 5
By: Representative Richmond 6
7
For An Act To Be Entitled 8
AN ACT TO MODIFY THE ARKANSAS CORPORATE F RANCHISE TAX 9
ACT OF 1979; TO CREA TE THE SECRETARY OF STATE 10
BUSINESS AND COMMERC IAL SERVICES ELECTRO NIC FILING 11
SYSTEM SPECIAL FUND; AND FOR OTHER PURPOSES. 12
13
14
Subtitle 15
TO MODIFY THE ARKANSAS CORPORATE 16
FRANCHISE TAX ACT OF 1979; AND TO CREATE 17
THE SECRETARY OF STATE BUSINESS AND 18
COMMERCIAL SERVICES ELECTRONIC FILING 19
SYSTEM SPECIAL FUND. 20
21
22
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 23
24
SECTION 1. Arkansas Code § 4 -27-1622(a)(4), concerning the location of 25
a corporation's principal office for annual franchise tax reports under the 26
Arkansas Business Corporation Act of 1987, is amended to read as follows: 27
(4) the address of its principal office, as defined in § 4-27-28
140, wherever it is located; 29
30
SECTION 2. Arkansas Code § 19 -6-301, concerning the enumeration 31
of special revenues, is amended to add an additional subsection to read as 32
follows: 33
(274) Processing fees colle cted under § 26-54-104(b)(1). 34
35
SECTION 3. Arkansas Code Title 19, Chapter 6, Subchapter 8, is amended 36 As Engrossed: H3/15/23 SB207
2 03-15-2023 09:42:48 ANS117
to add an additional section to read as follows: 1
19-6-844. Secretary of State Business and Commercial Services 2
Electronic Filing System Fund. 3
(a) There is created on the books of the Treasurer of State, the 4
Auditor of State, and the Chief Fiscal Officer of the State a special revenue 5
fund to be known as the "Secretary of State Business and Commercial Services 6
Electronic Filing System Fund". 7
(b) The fund shall consist of: 8
(1) The processing fees collected under § 26-54-104(b)(1); and 9
(2) Any other revenues as may be authorized by law. 10
(c) The fund shall be used by the Secretary of State to pay for the 11
maintenance and support of the business and commercial services electronic 12
filing system of the Secretary of State. 13
(d) The fund may be used by the Secretary of State to issue refunds 14
and reimbursements of processing fees collected for the annual franchise tax. 15
16
SECTION 4. Arkansas Code § 26-54-102(a), concerning the definition of 17
"corporation" used in the Arkansas Corporate Franchise Tax Act of 1979, is 18
amended to read as follows: 19
(a) As used in this chapter, “corporation” means any corporation or 20
limited liability company , domestic and foreign, active and inactive, which 21
is organized in or qualified under the laws of the State of Arkansas and 22
includes, but is not limited to, any person or group of persons, any 23
association, joint-stock company, business trust, or other organizations with 24
or without charter constituting a separate legal entity of relationship with 25
the purpose of obtaining some corporate privilege or franchise which is not 26
allowed to them as individuals and which is exercising, or attempting to 27
exercise, corporate-type acts, whether or not existing by virtue of a 28
particular statute. 29
30
SECTION 5. Arkansas Code § 26 -54-104 is amended to read as follows: 31
26-54-104. Annual franchise tax. 32
(a) Unless exempted under § 26 -54-105, every corporation shall file an 33
annual franchise tax report and pay an annual franchise tax as follows: 34
(1)(A) Each life, fire, accident, surety, liability, steam 35
boiler, tornado, health, or other kind of insurance c ompany of whatever 36 As Engrossed: H3/15/23 SB207
3 03-15-2023 09:42:48 ANS117
nature, having an outstanding capital stock of less than five hundred 1
thousand dollars ($500,000) shall pay three hundred dollars ($300). 2
(B) Each company having an outstanding capital stock of 3
five hundred thousand dollars ($500,000 ) or more shall pay four hundred 4
dollars ($400); 5
(2)(A) Each legal reserve mutual insurance corporation having 6
assets of less than one hundred million dollars ($100,000,000) shall pay 7
three hundred dollars ($300). 8
(B) Each corporation having assets of one hundred million 9
dollars ($100,000,000) or more shall pay four hundred dollars ($400); 10
(3) Each mutual assessment insurance corporation shall pay three 11
hundred dollars ($300); 12
(4)(A) Each mortgage loan corporation shall pay an amount 13
equivalent to three-tenths of one percent (0.3%) of that proportion of the 14
par value of its outstanding capital stock that its aggregate outstanding 15
loans made in Arkansas bears to the total aggregate outstanding loans made in 16
all states. 17
(B) No corporation shal l pay an annual tax of less than 18
three hundred dollars ($300); 19
(5) Each corporation, other than those in subdivisions (2) -(4) 20
of this section, without authorized capital stock shall pay three hundred 21
dollars ($300); 22
(6)(A) Each corporation, other tha n those in subdivisions (1) -23
(5) of this section, shall pay an amount equivalent to three -tenths of one 24
percent (0.3%) of that proportion of the par value of its outstanding capital 25
stock that the value of its real and personal property in Arkansas bears to 26
the total value of the real and personal property of the corporation. 27
(B) No corporation shall pay an annual tax of less than 28
one hundred fifty dollars ($150); 29
(7) Each corporation actually and actively in the process of 30
liquidation and which does not rent or lease its property but which retains 31
its corporate charter or authority for the sole purpose of winding up its 32
affairs shall pay an annual tax as provided in subdivision (6) of this 33
section or an amount equivalent to three -tenths of one percent (0.3%) of the 34
value of its real and tangible personal property in Arkansas, whichever is 35
smaller, but in no instance shall the tax be less than one hundred fifty 36 As Engrossed: H3/15/23 SB207
4 03-15-2023 09:42:48 ANS117
dollars ($150); and 1
(8) An organization formed pursuant to the Uniform Limited 2
Liability Company Act, § 4-38-101 et seq., shall pay the minimum franchise 3
tax. 4
(b)(1) In addition to the filing fees prescribed by law, the Secretary 5
of State shall collect a processing fee for each document required under this 6
chapter when delivered by electronic means. 7
(2) The processing fee collected by the Secretary of State under 8
subdivision (b)(1) of this section shall be: 9
(A) Four dollars ($4.00) when the filing fee is fifty 10
dollars ($50.00) or less; 11
(B) Five dollars ($5.00) when the filing fee is between 12
fifty-one dollars ($51.00) and one hundred sixty -seven dollars ($167.00); and 13
(C) Three percent (3%) of the total amount of the filing 14
fee if the filing fee is more than one hundred sixty -seven dollars ($167.00). 15
16
SECTION 6. Arkansas Code § 26-54-105(a)-(c), concerning the filing of 17
a franchise tax report under the Arkansas Corporate Franchise Act of 1979, is 18
amended to read as follows: 19
(a)(1) The Secretary of State shall furnish report forms notice to 20
each corporation subject to this chapter by mailing or emailing them the 21
notice to the corporation's current agent for service or other person 22
identified by the corporation. 23
(2) When filing the franchise tax report, a corporation may 24
state who is to receive a franchise tax form the following year if that 25
person is different from the agent for service on file for the corporation at 26
that time. 27
(b) A corporation that fails to receive the report forms the notice 28
under subdivision (a)(1) of this section by March 20 of the reporting year 29
shall make written request for them the notice to the Secretary of State on 30
or before March 31. 31
(c)(1) Each corporation subject to the requirements of this chapter 32
shall file a franchise tax report with the Secretary of State that shows the 33
condition and status of the corporation as of the close of business on the 34
last day of the corporation's preceding fiscal year calendar year and other 35
information required by the Secretary of State. 36 As Engrossed: H3/15/23 SB207
5 03-15-2023 09:42:48 ANS117
(2)(A) The franchise tax as comp uted on the report shall be 1
remitted with the franchise tax report. 2
(B) The franchise tax as computed on the report shall be 3
remitted with the franchise tax report on or before May 1 of the reporting 4
year for franchise tax due. 5
6
SECTION 7. Arkansas Code § 26-54-105(g) and (h), concerning the 7
requirements of a franchise tax report under the Arkansas Corporate Franchise 8
Act of 1979, is amended to read as follows: 9
(g)(1) Every franchise tax report shall contain the following 10
statement: 11
“I declare, under the penalties of perjury, that the foregoing statements are 12
true to the best of my knowledge and belief.” 13
(2) The statement shall be signed by the president, vice 14
president, secretary, treasurer, or controller of the corporation or any 15
other authorized person individual as determined by the Secretary of State . 16
(h)(1) All information contained in a franchise tax report shall be 17
confidential and not available for public inspection, except for the 18
following Only the following information contained in a franchise tax report 19
shall be available for public inspection : 20
(A) The name and address of the corporation; 21
(B) The name of the corporation's president, vice 22
president, secretary, treasurer, and controller; 23
(C) The total authorized capital sto ck with par value; 24
(D) The total issued and outstanding capital stock with 25
par value; and 26
(E) The state of incorporation. 27
(2) In the case of a franchise tax report filed by an 28
organization formed under the Uniform Limited Liability Company Act, § 4-38-29
101 et seq., the names of members, except those designated in the 30
organizations' franchise tax report as a manager, president, vice president, 31
secretary, treasurer, or controller of the organization, shall be 32
confidential and not available for publi c inspection unless the organization 33
has no registered agent for service of process. 34
35
SECTION 8. Arkansas Code § 26 -54-107(b)(2), concerning the penalty for 36 As Engrossed: H3/15/23 SB207
6 03-15-2023 09:42:48 ANS117
failure to file and remit a franchise tax report under the Arkansas Corporate 1
Franchise Tax Act of 1979, is amended to read as follows: 2
(2) On or before November 1 of each year, the Secretary of State 3
shall mail notice to the corporation at its last known address stating that 4
the corporation is subject to forfeiture revocation of its corporate charter 5
under § 26-54-111 for the failure to pay corporate franchise tax. 6
7
SECTION 9. Arkansas Code § 26 -54-111 is amended to read as follows: 8
26-54-111. Charter forfeiture revocation for failure to pay tax — 9
Procedure. 10
(a) On or before January 31 of each year, the Secretary of State shall 11
proclaim as forfeited revoked the corporate charters or authorities of all 12
corporations, both domestic and foreign, that according to the Secretary of 13
State's records are delinquent in the payment o f the annual franchise tax for 14
a prior year. 15
(b)(1) A copy of the proclamation under subsection (a) of this 16
section, or applicable portion thereof, shall be furnished to each other 17
official or agency of the state that is authorized to issue corporation 18
charters or authorities. 19
(2) Upon their receipt of the proclamation, the several 20
officials shall at once correct their respective records in accordance with 21
the proclamation. 22
23
SECTION 10. Arkansas Code § 26 -54-112 is amended to read as follows: 24
26-54-112. Reinstatement of corporations. 25
(a)(1)(A)(i) A corporation whose charter or permit authority to do 26
business in the state has been declared forfeited revoked by proclamation of 27
the Governor or the Secretary of State may be reinstated to all its rights , 28
powers, and property. 29
(ii) Reinstatement shall be retroactive to the time 30
that the corporation's authority to do business in the state was declared 31
forfeited revoked. 32
(B) The reinstatement shall be made after the filing of 33
all delinquent franchi se tax reports satisfactory to the Secretary of State 34
and the payment of all taxes and penalties due for each year of delinquency. 35
(2) However, reinstatement is not allowed after seven (7) five 36 As Engrossed: H3/15/23 SB207
7 03-15-2023 09:42:48 ANS117
(5) years from the date the charter or permit authority to do business in the 1
state if the corporation was is declared: 2
(A) forfeited Revoked by proclamation of the Governor or 3
the Secretary of State ; and 4
(B) A forfeited charter . 5
(b) If the Secretary of State issued the original corporate charter, 6
permit, or authority, the Secretary of State shall reinstate the corporation 7
upon payment by the corporation of all amounts due, as provided in subsection 8
(a) of this section. 9
(c)(1) If the original corporate charter, permit, or authority was 10
issued by an official other than the Secretary of State, the official shall 11
reinstate the corporation upon the corporation's filing with the official the 12
receipt of the Secretary of State showing payment of all amounts due, as 13
provided in subsection (a) of this secti on. 14
(2) Thereafter, the corporation shall stand in all respects as 15
though its name had never been declared forfeited revoked. 16
17
SECTION 11. Arkansas Code § 26 -54-114 is amended to read as follows: 18
26-54-114. Nonpayment of franchise taxes — Definitions. 19
(a) A corporation or limited liability company is not allowed to file 20
any forms or documentation related to that corporation or limited liability 21
company if the corporation or limited liability company owes owing past-due 22
franchise taxes to the Secret ary of State may not: 23
(1) File forms or documents related to that corporation or 24
limited liability company; 25
(2) Create a new legal entity in this state; or 26
(3) Obtain authority to do business in this state . 27
(b) A person or individual is not allowed to file any initial forms or 28
documentation with the Secretary of State to create any legal entity in the 29
State of Arkansas or to obtain authority to do business in the State of 30
Arkansas if that person is substantially connected to any corporation or 31
limited liability company that owes past -due franchise taxes to the Secretary 32
of State may not: 33
(1) File forms or documents related to that corporation or 34
limited liability company; 35
(2) Create a new legal entity in this state; or 36 As Engrossed: H3/15/23 SB207
8 03-15-2023 09:42:48 ANS117
(3) Obtain authority to do business in this state . 1
(c) As used in this section: 2
(1) “Past-due franchise taxes” means only those taxes owed three 3
(3) years prior to the year in which the current filing is presented; 4
(2) “Past officer or director” means a person or individual who 5
was associated with the corporation or limited liability company during the 6
at any time that its charter was revoked during its charter that the 7
corporation or limited liability company was responsible for nonpayment of 8
franchise taxes; and 9
(3) “Substantially connected” means a present officer , or 10
director, member, or manager or a past officer, or director, member, or 11
manager of a corporation. 12
(d) An individual who is an incorporator or organizer of a corporation 13
or limited liability company shall not be considered to be substantially 14
connected to a corporation or limited liability company that owes past -due 15
franchise taxes to the Secretary of State. 16
(e) Each corporation, subject to this chapter, shall file with its 17
original articles of incorporation or certificate of organization the name of 18
at least one (1) individual who is substantially connected to the corporation 19
and is responsible for payment of franchise taxes. 20
(f) Any current or past officer or director that has been added to a 21
corporation without their permission shall be removed as an officer or 22
director of the corporation by the Secretary of State and not held 23
responsible for past -due franchise taxes, if the officer or director submits: 24
(1) A copy of a report filed wit h a local, state, or federal law 25
enforcement entity that states the officer or director has been fraudulently 26
added to the corporation; and 27
(2) A statement, prescribed by the Secretary of State, signed by 28
the officer or director, that states the officer or director was added to the 29
corporation without their permission, with the following declaration: 30
"I declare, under the penalties of perjury, that the foregoing statements are 31
true to the best of my knowledge and belief." 32
33
SECTION 12. Arkansas Code Tit le 26, Chapter 54, Subchapter 1, is 34
amended to add an additional section to read as follows: 35
26-54-116. Powers of Secretary of State. 36 As Engrossed: H3/15/23 SB207
9 03-15-2023 09:42:48 ANS117
The Secretary of State is authorized to perform any of the duties that 1
are required of him or her under this chapter. 2
3
/s/B. Johnson 4
5
6
APPROVED: 4/4/23 7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36