This bill seeks to repeal the Arkansas Corporate Franchise Tax Act of 1979, addressing the burdensome nature of the corporate franchise tax, which is based on capital stock rather than revenue or profit. The General Assembly recognizes that this tax disproportionately affects new and low-profit-margin businesses, particularly during economic downturns, and notes that Arkansas is one of only sixteen states that still impose such a tax. To simplify the corporate tax structure, the bill includes several deletions from existing law, removing sections related to annual franchise tax report requirements, the certificate of existence and good standing for corporations, and references to the annual franchise tax report in the Arkansas Benefit Corporation Act.

In addition to repealing the franchise tax, the bill outlines the responsibilities of the Secretary of State regarding tax computation, penalty assessments, and notifications to corporations about potential charter revocation due to unpaid taxes. It establishes guidelines for resolving disputes related to franchise taxes and allows for the waiver of penalties under certain conditions, such as taxpayer insolvency. The bill also stipulates that corporations with outstanding franchise taxes are prohibited from filing documents or creating new entities in the state, while defining "past-due franchise taxes" and clarifying the responsibilities of individuals associated with corporations regarding tax payments. Overall, the legislation aims to streamline tax compliance and enforcement while providing relief options for financially struggling corporations.

Statutes affected:
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)
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)
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)