The bill seeks to repeal the Arkansas Corporate Franchise Tax Act of 1979, addressing the burdensome nature of the corporate franchise tax, which is levied on capital stock regardless of a business's profitability. This tax disproportionately impacts new and low-profit-margin businesses, and Arkansas is noted as one of the few states that still impose such a tax. Key provisions include the repeal of requirements for corporations to file annual franchise tax reports and the associated penalties for non-compliance, as well as conforming changes to other laws, such as the Arkansas Benefit Corporation Act, to eliminate references to the franchise tax report.

Additionally, the bill introduces amendments that clarify the responsibilities of the Secretary of State regarding tax computation, penalty assessment, and notification of potential charter revocation due to unpaid taxes. It establishes guidelines for resolving disputes related to corporate franchise taxes and allows for the waiver of penalties under certain conditions, such as taxpayer insolvency. The bill also restricts corporations with outstanding franchise taxes from filing documents or creating new entities in the state and defines "past-due franchise taxes." It empowers the Secretary of State to relieve individuals fraudulently added as officers or directors from liability for these taxes, aiming to streamline tax compliance and provide relief for financially struggling corporations.

Statutes affected:
Old version HB1750 Original - 3-12-2025 09:47 AM: 4-27-128(b), 4-27-1601(e), 4-27-1622, 4-20-105(a), 4-27-121(a), 26-54-101, 4-36-401(a), 4-36-401(b), 4-37-205(a), 4-37-206, 26-54-105, 4-38-212(f), 19-5-1227(b), 19-6-201(3)
Old version HB1750 V2 - 3-17-2025 11:42 AM: 4-27-128(b), 4-27-1601(e), 4-27-1622, 4-20-105(a), 4-27-121(a), 26-54-101, 4-36-401(a), 4-36-401(b), 4-37-205(a), 4-37-206, 26-54-105, 03-17-2025, 4-38-212(f), 19-5-1227(b), 19-6-201(3)
HB 1750: 4-27-128(b), 4-27-1601(e), 4-27-1622, 4-20-105(a), 4-27-121(a), 26-54-101, 4-36-401(a), 4-36-401(b), 4-37-205(a), 4-37-206, 26-54-105, 4-38-212(f), 19-5-1227(b), 19-6-201(3)