Stricken language would be deleted from and underlined language would be added to present law.
*JLL322* 03/28/2025 4:07:16 PM JLL322
State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1932 3
4
By: Representatives McCollum, Underwood, Lundstrum, Ray 5
By: Senator J. Boyd 6
7
For An Act To Be Entitled 8
AN ACT TO AMEND LAWS CONCERNING THE CORPORATE 9
FRANCHISE TAX; TO REPEAL THE ARKANSAS CORPORATE 10
FRANCHISE TAX ACT OF 1979; TO REQUIRE AN ANNUAL 11
REPORT FOR CORPORATIONS; TO MAKE CONFORMING CHANGES; 12
AND FOR OTHER PURPOSES. 13
14
15
Subtitle 16
TO AMEND LAWS CONCERNING THE CORPORATE 17
FRANCHISE TAX; TO REPEAL THE ARKANSAS 18
CORPORATE FRANCHISE TAX ACT OF 1979; AND 19
TO REQUIRE AN ANNUAL REPORT FOR 20
CORPORATIONS. 21
22
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 23
24
SECTION 1. Arkansas Code Title 4, Chapter 25, Subchapter 1, is amended 25
to add an additional section to read as follows: 26
4-25-111. Annual report for corporations — List of corporations — 27
Definition. 28
(a)(1) As used in this section, “corporation” means any corporation or 29
limited liability company, domestic or foreign, active or inactive, that is 30
organized in or qualified under the laws of the State of Arkansas and 31
includes without limitation any person or group of persons, association, 32
joint-stock company, business trust, or other organizations with or without 33
charter constituting a separate legal entity of relationship with the purpose 34
of obtaining some corporate privilege or franchise that is not allowed to 35
them as individuals and that is exercising, or attempting to exercise, 36 HB1932
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corporate-type acts, whether or not existing by virtue of a particular 1
statute. 2
(2) “Corporation” does not include: 3
(A) Nonprofit corporations; 4
(B) Corporations that are organizations exempt from the 5
federal income tax; or 6
(C) Organizations formed under or governed by the Uniform 7
Partnership Act (1996), § 4 -46-101 et seq., or the Uniform Limited 8
Partnership Act (2001), § 4 -47-101 et seq. 9
(b)(1) The Secretary of State shall furnish annual report forms to 10
each corporation subject to this section by mailing the annual report forms 11
to the corporation's current agent for service or other person identified by 12
the corporation. 13
(2) When filing the annual report, a corporation may state who 14
is to receive an annual report form the following year if that person is 15
different from the agent for service on file for the corporation at that 16
time. 17
(c) A corporation that fails to receive the annual report forms by 18
March 20 of the reporting year shall make written request for the annual 19
report forms to the Secretary of State on or before March 31. 20
(d) Each corporation subject to the requirements of this section shall 21
file an annual report with the Secretary of State that shows the condition 22
and status of the corporation as of the close of business on the last day of 23
the corporation's preceding fiscal year and other information required by the 24
Secretary of State. 25
(e) A newly formed corporation is not required to file an annual 26
report until the calendar year immediately following the calendar year of 27
incorporation. 28
(f) When the par value of the shares of a corporation is required to 29
be stated in an annual report and the shares of the corporation are without 30
par value, the number of shares shall be stated. 31
(g)(1) Every annual report shall contain the following statement: 32
“I declare, under the penalties of perjury, that the 33
foregoing statements are true to the best of my knowledge and belief.” 34
(2) The statement required under subdivision (g)(1) of this 35
section shall be signed by the president, vice president, secretary, 36 HB1932
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treasurer, or controller of the corporation or other authorized person. 1
(h)(1) All information contained in an annual report shall be 2
confidential and not available for public inspection, except for the 3
following: 4
(A) The name and address of the corporation; 5
(B) The name of the corporation's president, vice 6
president, secretary, treasurer, and controller; 7
(C) The total authorized capital stock with par value; 8
(D) The total issued and outstanding capital stock with 9
par value; and 10
(E) The state of incorporation. 11
(2) In the case of an annual report filed by an organization 12
formed under the Uniform Limited Liability Company Act, § 4 -38-101 et seq., 13
the names of members, except those designated in the organizations' franchise 14
tax report as a manager, president, vice president, secretary, treasurer, or 15
controller of the organization, shall be confidential and not available for 16
public inspection unless the organization has no registered agent for service 17
of process. 18
(i)(1)(A) The Bank Commissioner, the Insurance Commissioner, and any 19
other officer or agency of the state authorized to issue corporate permits or 20
authorities to do business in this state shall prepare and maintain a correct 21
list of all corporations organizing or qualifying through their respective 22
offices or agencies. 23
(B) Each official or agency shall file with the Secretary 24
of State a monthly report showing: 25
(i) The name and address of each new corporation 26
organized or qualified; 27
(ii) The authorized and outstanding capital stock; 28
(iii) The name changes, mergers, charter 29
forfeitures, or withdrawals; 30
(iv) The name and address of each corporation that 31
has provided official notification regarding the dissolution of the 32
corporation; and 33
(v) All other information concerning the corporation 34
required by the Secretary of State. 35
(2) Upon request of the Secretary of State, each official or 36 HB1932
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agency shall prepare and certify to the Secretary of State a complete list of 1
the names and addresses of all corporations that have organized or qualified 2
through their respective office or agency and that are subject to the 3
provisions of this section. 4
(3) Officials or agencies of the state, county, or 5
municipalities authorized to issue permits shall notify each corporation 6
receiving a permit of the requirements to register the corporation with the 7
Secretary of State before conducting business in Arkansas. 8
(4)(A) A corporation filing instruments providing for the 9
organization of any common law or statutory trust or similar organization 10
with any county clerk, or other clerk of the various counties of this state, 11
shall file them in duplicate. 12
(B) The clerk receiving the documents for filing or 13
recordation shall file mark them and forward the file -marked duplicate to the 14
Secretary of State. 15
16
SECTION 2. Arkansas Code § 4 -27-128(b)(4), concerning the certificate 17
of existence for a domestic corporation, is amended to read as follows: 18
(4) that its most recent annual franchise tax report required by 19
§ 4-27-1622 has been delivered to the Secretary of State; 20
21
SECTION 3. Arkansas Code § 4 -27-1601(e)(7), concerning corporate 22
records, is amended to read as follows: 23
(7) its most recent annual franchise tax report delivered to the 24
Secretary of State under § 4 -27-1622. 25
26
SECTION 4. Arkansas Code § 4 -27-1622 is amended to read as follows: 27
4-27-1622. Annual franchise tax report for Secretary of State. 28
(a) Each domestic corporation, and each foreign corporation authorized 29
to transact business in this state, shall deliver to the Secretary of State 30
for filing an annual franchise tax report that sets forth: 31
(1) the name of the corporation; 32
(2) the jurisdiction under which the corporation is 33
incorporated; 34
(3) the information required by § 4-20-105(a); 35
(4) the address of its principal office, as defined in § 4-27-36 HB1932
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140, wherever it is located; 1
(5) the names of its principal officers; 2
(6) the total number of authorized shares, itemized by class and 3
series, if any, within each class; 4
(7) the total number of issued and outstanding shares, itemized 5
by class and series, if any, within each class; and 6
(8) such other information as the Secretary of State may specify 7
in a form promulgated under § 4-27-121(a). 8
(b) The requirements as to the applicability, use, and filing of the 9
annual franchise tax report shall be as set forth in the Arkansas Corporate 10
Franchise Tax Act of 1979, § 26-54-101 et seq § 4-25-111. 11
12
SECTION 5. Arkansas Code § 4 -36-401(a)(1), concerning the annual 13
reports due under the Arkansas Benefit Corporation Act, is amended to read as 14
follows: 15
(a)(1) A benefit corporation shall prepare an annual benefit report 16
and an annual franchise tax report under § 26-54-104 § 4-25-111. 17
18
SECTION 6. Arkansas Code § 4 -36-401(b), concerning the annual reports 19
due under the Arkansas Benefit Corporation Act, is amended to read as 20
follows: 21
(b) A benefit corporation shall send a benefit report to each 22
shareholder annually: 23
(1) Before the stated due date of an annual franchise tax under 24
§ 26-54-104 May 1; or 25
(2) When the benefit corporation delivers an annual financial 26
report to its shareholders. 27
28
SECTION 7. Arkansas Code § 4 -37-205(a), concerning the certificate of 29
good standing for a protected series under the Uniform Protected Series Act, 30
is amended to read as follows: 31
(a) On request of any person, the Secretary of State shall issue a 32
certificate of good standing for a protected series of a series limited 33
liability company or a certificate of registration for a foreign protected 34
series if: 35
(1) in the case of a protected series: 36 HB1932
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(A) no statement of dissolution, termination, or 1
relocation pertaining to the protected series has been filed; and 2
(B) the company has delivered to the Secretary of State 3
for filing the most recent annual report required by § 26-54-105 § 4-25-111 4
and the report includes the name of the protected series, unless: 5
(i) when the company delivered the report for 6
filing, the protected series designation pertaining to the protected series 7
had not yet taken effect; or 8
(ii) after the company delivered the report for 9
filing, the company delivered to the Secretary of State for filing a 10
statement of designation change changing the name of the protected series; or 11
(2) in the case of a foreign protected series, it is registered 12
to do business in this state. 13
14
SECTION 8. Arkansas Code § 4 -37-206(a), concerning the information 15
required in the annual report of a limited liability company, is amended to 16
read as follows: 17
(a) In the annual report required by § 26-54-105 § 4-25-111, a series 18
limited liability company shall include the name of each protected series of 19
the company: 20
(1) for which the company has previously delivered to the 21
Secretary of State for filing a protected series designation; and 22
(2) which has not dissolved and completed winding up. 23
24
SECTION 9. Arkansas Code § 4 -38-212(f), concerning a limited liability 25
company's annual report for the Secretary of State, is amended to read as 26
follows: 27
(f) A limited liability company has satisfied the annual report 28
requirements under this section if the requirements under the Arkansas 29
Corporate Franchise Tax Act of 1979, § 26-54-101 et seq., § 4-25-111 have 30
been met. 31
32
SECTION 10. Arkansas Code § 19 -5-1227(b), concerning the Educational 33
Adequacy Fund, is amended to read as follows: 34
(b) After the Treasurer of State has made deductions from the revenues 35
under § 19-5-203(b)(2)(A), the Educational Adequacy Fund shall consist of: 36 HB1932
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(1) All net revenues collected due to enactments of the Eighty -1
Fourth General Assembly meeting in Second Extraordinary Session, unless a 2
different distribution of those additional net revenues is otherwise provided 3
in the act creating those additional net revenues; 4
(2) The revenues credited to the Educational Adequacy Fund under 5
§ 26-54-113(b)(2); 6
(3) The revenues generated by § 26 -52-302(d), § 26-52-316, § 26-7
52-317(c)(1)(C), § 26-52-319(a)(2)(C), § 26-53-107(d), § 26-53-145(c)(1)(C), 8
§ 26-53-148(a)(2)(C), § 26-56-224(c)(3), and § 26-57-1002(d)(1)(A)(ii); and 9
(4)(3) Other revenues as provided by law. 10
11
SECTION 11. Arkansas Code § 19 -6-201(3), concerning the enumeration of 12
general revenues, is repealed. 13
(3) Corporation franchise taxes, as enacted by Acts 1979, 14
No. 889, known as the “Arkansas Corporate Franchise Tax Act of 1979”, and all 15
laws amendatory thereto, § 26 -54-101 et seq.; 16
17
SECTION 12. Arkansas Code Title 26, Chapter 54, is repealed. 18
Chapter 54 — Arkansas Corporate Franchise Tax Act of 1979 19
20
26-54-101. Title. 21
This chapter shall be known and may be cited as the “Arkansas Corporate 22
Franchise Tax Act of 1979”. 23
24
26-54-102. Definition. 25
(a) As used in this chapter, “corporation” means any corporation or 26
limited liability company, domestic and foreign, active and inactive, which 27
is organized in or qualified under the laws of the State of Arkansas and 28
includes, but is not limited to, any person or group of persons, any 29
association, joint-stock company, business trust, or other organizations with 30
or without charter constituting a separate legal entity of relationship with 31
the purpose of obtaining some corporate privilege or franchise which is not 32
allowed to them as individuals and which is exercising, or attempting to 33
exercise, corporate-type acts, whether or not existing by virtue of a 34
particular statute. 35
(b) However, “corporation” does not include: 36 HB1932
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(1) Nonprofit corporations; 1
(2) Corporations which are organizations exempt from the federal 2
income tax; or 3
(3) Organizations formed under or governed by the Uniform 4
Partnership Act (1996), § 4 -46-101 et seq., or the Uniform Limited 5
Partnership Act (2001), § 4 -47-101 et seq. 6
7
26-54-103. Effect upon prior rights, etc. 8
This chapter does not affect rights or duties that matured, liabilities 9
or penalties that were incurred, or proceedings begun before January 1, 1980. 10
11
26-54-104. Annual franchise tax. 12
(a) Unless exempted under § 26 -54-105, every corporation shall file an 13
annual franchise tax report and pay an annual franchise tax as follows: 14
(1)(A) Each life, fire, accident, surety, liability, steam 15
boiler, tornado, health, or other kind of insurance company of whatever 16
nature, having an outstanding capital stock of less than five hundred 17
thousand dollars ($500,000) shall pay three hundred dollars ($300). 18
(B) Each company having an outstanding capital stock of 19
five hundred thousand dollars ($500,000) or more shall pay four hundred 20
dollars ($400); 21
(2)(A) Each legal reserve mutual insurance corporation having 22
assets of less than one hundred million dollars ($100,000,000) shall pay 23
three hundred dollars ($300). 24
(B) Each corporation having assets of one hundred million 25
dollars ($100,000,000) or more shall pay four hundred dollars ($400); 26
(3) Each mutual assessment insurance corporation shall pay three 27
hundred dollars ($300); 28
(4)(A) Each mortgage loan corporation shall pay an amount 29
equivalent to three-tenths of one percent (0.3%) of that proportion of the 30
par value of its outstanding capital stock that its aggregate outstanding 31
loans made in Arkansas bears to the total aggregate outstanding loans made in 32
all states. 33
(B) No corporation shall pay an annual tax of less than 34
three hundred dollars ($300); 35
(5) Each corporation, other than those in subdivisions (2) -(4) 36 HB1932
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of this section, without authorized capital stock shall pay three hundred 1
dollars ($300); 2
(6)(A) Each corporation, other than those in subdivisions (1) -3
(5) of this section, shall pay an amount equivalent to three -tenths of one 4
percent (0.3%) of that proportion of the par value of its outstanding capital 5
stock that the value of its real and personal property in Arkansas bears to 6
the total value of the real and personal property of the corporation. 7
(B) No corporation shall pay an annual tax of less than 8
one hundred fifty dollars ($150); 9
(7) Each corporation actually and actively in the process of 10
liquidation and which does not rent or lease its property but which retains 11
its corporate charter or authority for the sole purpose of winding up its 12
affairs shall pay an annual tax as provided in subdivision (6) of this 13
section or an amount equivalent to three -tenths of one percent (0.3%) of the 14
value of its real and tangible personal property in Arkansas, whichever is 15
smaller, but in no instance shall the tax be less than one hundred fifty 16
dollars ($150); and 17
(8) An organization formed pursuant to the Uniform Limited 18
Liability Company Act, § 4 -38-101 et seq., shall pay the minimum franchise 19
tax. 20
(b)(1) In addition to the filing fees prescribed by law, the Secretary 21
of State shall collect a processing fee for each document required under this 22
chapter when delivered by electronic means. 23
(2) The processing fee collected by the Secretary of State under 24
subdivision (b)(1) of this section shall be: 25
(A) Four dollars ($4.00) when the filing fee is fifty 26
dollars ($50.00) or less; 27
(B) Five dollars ($5.00) when the filing fee is between 28
fifty-one dollars ($51.00) and one hundred sixty -seven dollars ($167); and 29
(C) Three percent (3%) of the total amount of the filing 30
fee if the filing fee is more than one hundred sixty -seven dollars ($167). 31
32
26-54-105. Franchise tax reports. 33
(a)(1) The Secretary of State shall furnish notice to each corporation 34
subject to this chapter by mailing or emailing the notice to the 35
corporation's current agent for service or other person identified by the 36 HB1932
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corporation. 1
(2) When filing the franchise tax report, a corporation may 2
state who is to receive a franchise tax form the following year if that 3
person is different from the agent for service on file for the corporation at 4
that time. 5
(b) A corporation that fails to receive the notice under subdivision 6
(a)(1) of this section by March 20 of the reporting year shall make written 7
request for the notice to the Secretary of State on or before March 31. 8
(c)(1) Each corporation subject to the requirements of this chapter 9
shall file a franchise tax report with the Secretary of State that shows the 10
condition and status of the corporation as of the close of business on the 11
last day of the corporation's preceding calendar year and other information 12
required by the Secretary of State. 13
(2)(A) The franchise tax as computed on the report shall be 14
remitted with the franchise tax report. 15
(B) The franchise tax as computed on the report shall be 16
remitted with the franchise tax report on or before May 1 of the reporting 17
year for franchise tax due. 18
(d)(1) Every corporation that dissolves shall be required to pay at 19
the time of dissolution the franchise tax for the prior calendar year and pay 20
at the time of dissolution the minimum franchise tax for the year in which 21
dissolved or withdrawn. 22
(2) Any newly formed corporation shall not be required to file a 23
franchise tax report until the calendar year immediately following the 24
calendar year of incorporation. 25
(e)(1) When the par value of the shares of a corporation is required 26
to be stated in any franchise tax report and the shares of the corporation 27
are without par value, the number of shares shall be stated. 28
(2) For the purpose of computing the franchise tax prescribed by 29
this chapter, shares of no par value shall be considered to be of the par 30
value of twenty-five dollars ($25.00) per share. 31
(f) Each corporation which pays its tax computed by the full 32
assessment of capital stock or property shall not be required to report the 33
value of its real and personal property within or without this state. 34
(g)(1) Every franchise tax report shall contain the following 35
statement: 36 HB1932
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“I declare, under the penalties of perjury, that the foregoing 1
statements are true to the best of my knowledge and belief.” 2
(2) The statement shall be signed by the president, vice 3
president, secretary, treasurer, or controller of the corporation or any 4
other authorized person individual as determined by the Secretary of State. 5
(h)(1) Only the following information contained in a franchise tax 6
report shall be available for public inspection: 7
(A) The name and address of the corporation; 8
(B) The name of the corporation's president, vice 9
president, secretary, treasurer, and controller; 10
(C) The total authorized capital stock with par value; 11
(D) The total issued and outstanding capital stock with 12
par value; and 13
(E) The state of incorporation. 14
(2) In the case of a franchise tax report filed by an 15
organization formed under the Uniform Limited Liability Company Act, § 4 -38-16
101 et seq., the names of members, except those designated in the 17
organizations' franchise tax report as a manager, president, vice president, 18
secretary, treasurer, or controller of the organization, shall be 19
confidential and not available for public inspection unless the organization 20
has no registered agent for service of process. 21
22
26-54-107. Computation of tax — Penalty — Relief. 23
(a) Using the information reported on the franchise tax report under § 24
26-54-105 and any other information received by him or her bearing upon the 25
subject, the Secretary of State shall compute the amount of tax of each 26
corporation at the rate or rates provided by this chapter. 27
(b)(1)(A) If the taxpayer fails to comply with the filing and 28
remittance requirements under § 26 -54-105(c), the Secretary of State shall 29
assess the corporation a penalty of twenty -five dollars ($25.00) plus 30
interest on the tax and penalty from the date due until paid at the rate of 31
ten percent (10%) per year. 32
(B) However, the franchise tax, penalty, and interest for 33
any tax year shall not exceed two (2) times the corporation's tax owed. 34
(2) On or before November 1 of each year, the Secretary of State 35
shall mail notice to the corporation at its last known address stating that 36 HB1932
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the corporation is subject to revocation of its corporate charter under § 26 -1
54-111 for the failure to pay corporate franchise tax. 2
(c) The Secretary of State or his or her designee may agree to settle 3
or compromise a dispute concerning interest or penalties associated with 4
corporate franchise taxes if the taxpayer: 5
(1) Disputes the proposed amount; or 6
(2) Is insolvent or bankrupt. 7
(d)(1) The Secretary of State may waive any accrued interest or 8
assessed penalties imposed on a taxpayer due to a failure to remit corporate 9
franchise taxes under § 26 -54-105(c), if: 10
(A) The taxpayer is reasonably mistaken about the 11
application of this chapter or the computation of the franchise tax to the 12
corporation; or 13
(B) A taxpayer cannot pay the accrued interest or assessed 14
penalties because of the taxpayer's insolvency or bankruptcy. 15
(2) The Secretary of State may waive any fees that a taxpayer 16
owes if the taxpayer desires to dissolve the corporation. 17
(3) If a taxpayer demonstrates that a corporation was not doing 18
business in the state for the period for which penalties and interest are 19
owed under this section, the Secretary of State shall waive the amount due 20
under this section if the taxpayer demonstrates that the taxpayer intends to 21
dissolve the corporation. 22
(e) If the parties cannot resolve the dispute, the parties may pursue 23
any other remedy available to them, including without limitation remedies 24
available under the Arkansas Administrative Procedure Act, § 25 -15-201 et 25
seq. 26
(f) The Secretary of State shall develop guidelines to assist a 27
taxpayer in resolving a corporate franchise tax dispute. 28
29
26-54-108. Taxes and penalties as lien. 30
The taxes and penalties required to be paid by this chapter shall be a 31
first lien on all property of the corporation, whether or not the property is 32
employed by the corporation in the prosecution of its business or is in the 33
hands of an assignee, receiver, or trustee. 34
35
26-54-109. Lists of corporations to be prepared. 36 HB1932
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(a)(1) The Bank Commissioner, Insurance Commissioner, and any other 1
officer or agency of the state authorized to issue corporate permits or 2
authorities to do business in this state shall prepare and maintain a correct 3
list of all corporations organizing or qualifying through their respective 4
offices or agencies. 5
(2) Each official or agency shall file with the Secretary of 6
State a monthly report showing: 7
(A) The name and address of each new corporation organized 8
or qualified; 9
(B) The authorized and outstanding capital stock; 10
(C) The name changes, mergers, charter forfeitures, or 11
withdrawals; 12
(D) The name and address of each corporation that has 13
provided official notification regarding the dissolution of the corporation; 14
and 15
(E) All other information concerning the corporation 16
required by the Secretary of State. 17
(b) Upon request of the Secretary of State, each official or agency 18
shall prepare and certify to the Secretary of State a complete list of the 19
names and addresses of all corporations that have organized or qualified 20
through their respective office or agency and that are subject to the 21
provisions of this chapter. 22
(c) Officials or agencies of the state, county, or municipalities 23
authorized to issue permits shall notify each corporation receiving a permit 24
of the requirements to register the corporation with the Secretary of State 25
before conducting business in Arkansas. 26
(d)(1) A corporation filing instruments providing for the organization 27
of any common law or statutory trust or similar organization with any county 28
clerk, or other clerk of the various counties of this state, shall file them 29
in duplicate. 30
(2) The clerk receiving the documents for filing or recordation 31
shall file mark them and forward the file -marked duplicate to the Secretary 32
of State. 33
(e)(1) The Secretary of the Department of Finance and Administration 34
shall provide the Secretary of State a list of corporations doing business in 35
this state and filing tax reports with the Department of Finance and 36 HB1932
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Administration. 1
(2) However, the Secretary of the Department of Finance and 2
Administration shall not include any information deemed confidential by any 3
other law. 4
5
26-54-110. Dissolution or withdrawal by corporations. 6
Applications for dissolution or withdrawal by a corporation, 7
association, or organization cannot be accepted by the authority that 8
initially authorized or granted an authority to the corporation to do 9
business in Arkansas until receipt of a statement verified by the Secretary 10
of State that the franchise tax due has been paid. 11
12
26-54-111. Charter revocation for failure to pay tax — Procedure. 13
(a) On or before January 31 of each year, the Secretary of State shall 14
proclaim as revoked the corporate charters or authorities of all 15
corporations, both domestic and foreign, that according to the Secretary of 16
State's records are delinquent in the payment of the annual franchise tax for 17
a prior year. 18
(b)(1) A copy of the proclamation under subsection (a) of this 19
section, or applicable portion thereof, shall be furnished to each other 20
official or agency of the state that is authorized to issue corporation 21
charters or authorities. 22
(2) Upon their receipt of the proclamation, the several 23
officials shall at once correct their respective records in accordance with 24
the proclamation. 25
26
26-54-112. Reinstatement of corporations. 27
(a)(1)(A)(i) A corporation whose charter or permit authority to do 28
business in the state has been declared revoked by proclamation of the 29
Governor or the Secretary of State may be reinstated to all its rights, 30
powers, and property. 31
(ii) Reinstatement shall be retroactive to the time 32
that the corporation's authority to do business in the state was declared 33
revoked. 34
(B) The reinstatement shall be made after the filing of 35
all delinquent franchise tax reports satisfactory to the Secretary of State 36 HB1932
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and the payment of all taxes and penalties due for each year of delinquency. 1
(2) However, reinstatement is not allowed after five (5) years 2
from the date the charter or permit authority to do business in the state if 3
the corporation is declared: 4
(A) Revoked by proclamation of the Governor or the 5
Secretary of State; and 6
(B) A forfeited charter. 7
(b) If the Secretary of State issued the original corporate charter, 8
permit, or authority, the Secretary of State shall reinstate the corporation 9
upon payment by the corporation of all amounts due, as provided in subsection 10
(a) of this section. 11
(c)(1) If the original corporate charter, permit, or authority was 12
issued by an official other than the Secretary of State, the official shall 13
reinstate the corporation upon the corporation's filing with the official the 14
receipt of the Secretary of State showing payment of all amounts due, as 15
provided in subsection (a) of this section. 16
(2) Thereafter, the corporation shall stand in all respects as 17
though its name had never been declared revoked. 18
19
26-54-113. Disposition of funds. 20
(a) All taxes and penalties collected under the provisions of this 21
chapter each month shall be deposited into the State Treasury to the credit 22
of the Revenue Holding Fund Account of the State Apportionment Fund. 23
(b)(1) On or before the fifth day of the following month, the 24
Treasurer of State shall allocate and transfer the taxes and penalties 25
collected to the General Revenue Fund Account of the State Apportionment Fund 26
until a total of eight million dollars ($8,000,000) has been transferred 27
during a fiscal year. 28
(2) After the transfers required by subdivision (b)(1) of this 29
section have been made, the taxes and penalties collected under this chapter 30
during the remainder of the fiscal year shall be special revenues, and the 31
Treasurer of State shall transfer the taxes and penalties collected to the 32
Educational Adequacy Fund after making the deductions required by § 19 -5-33
203(b)(2). 34
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26-54-114. Nonpayment of franchise taxes — Definitions. 36 HB1932
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(a) A corporation or limited liability company owing past -due 1
franchise taxes to the Secretary of State may not: 2
(1) File forms or documents related to that corporation or 3
limited liability company; 4
(2) Create a new legal entity in this state; or 5
(3) Obtain authority to do business in this state. 6
(b) A person or individual substantially connected to any corporation 7
or limited liability company that owes past -due franchise taxes to the 8
Secretary of State may not: 9
(1) File forms or documents related to that corporation or 10
limited liability company; 11
(2) Create a new legal entity in this state; or 12
(3) Obtain authority to do business in this state. 13
(c) As used in this section: 14
(1) “Past-due franchise taxes” means only those taxes owed three 15
(3) years prior to the year in which the current filing is presented; 16
(2) “Past officer or director” means a person or individual who 17
was associated with the corporation or limited liability company at any time 18
during its charter that the corporation or limited liability company was 19
responsible for nonpayment of franchise taxes; and 20
(3) “Substantially connected” means a present officer, director, 21
member, or manager or a past officer, director, member, or manager of a 22
corporation. 23
(d) An individual who is an incorporator or organizer of a corporation 24
or limited liability company shall not be considered to be substantially 25
connected to a corporation or limited liability company that owes past -due 26
franchise taxes to the Secretary of State. 27
(e) Each corporation, subject to this chapter, shall file with its 28
original articles of incorporation or certificate of organization the name of 29
at least one (1) individual who is substantially connected to the corporation 30
and is responsible for payment of franchise taxes. 31
(f) Any current or past officer or director that has been added to a 32
corporation without his or her permission shall be removed as an officer or 33
director of the corporation by the Secretary of State and not held 34
responsible for past -due franchise taxes, if the officer or director submits: 35
(1) A copy of a report filed with a local, state, or federal law 36 HB1932
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enforcement entity that states the officer or director has been fraudulently 1
added to the corporation; and 2
(2) A statement, prescribed by the Secretary of State, signed by 3
the officer or director, that states the officer or director was added to the 4
corporation without his or her permission, with the following declaration: 5
“I declare, under the penalties of perjury, that the foregoing 6
statements are true to the best of my knowledge and belief.” 7
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
12
SECTION 13. DO NOT CODIFY. Applicability and effect. 13
This act: 14
(1) Applies only to franchise taxes imposed on or after the 15
effective date of this act; and 16
(2) Does not affect a taxpayer's liability for any franchise 17
taxes that are due or delinquent as of the effective date of this act. 18
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