Corporate Income Tax

Rates


Corporations doing business in Arkansas are subject to tax on net income at the following rates:
  • First $3,000: 1.0%
  • Next $3,000: 2.0%
  • Next $5,000: 3.0%
  • Next $14,000: 5.0%
  • Next $75,000: 6.0%
  • Over $100,000: 6.5%
The portion of income that exceeds each category is taxed at the next higher rate. For example, if a business has corporate net income of $125,000, the first $3,000 is taxed at 1%, the next $3,000 is taxed at 2% and so on. Only the $25,000 in excess of $100,000 is taxed at the maximum rate of 6.5%.

Affiliated Groups


Corporations that are members of an affiliated group that file a federal consolidated corporate income tax return may elect to file an Arkansas consolidated corporate income tax return. Only those corporations in the federal affiliated group that have gross taxable income from sources within Arkansas are eligible.

Arkansas has adopted the provisions of Subchapter S of the Federal Internal Revenue Code of 1986 (Title 26, U.S.C., Sections 1361 through 1379).