HB1932
To Amend Laws Concerning The Corporate Franchise Tax; To Repeal The Arkansas Corporate Franchise Tax Act Of 1979; And To Require An Annual Report For Corporations.
Last Action (May 5, 2025): Died in House Committee at Sine Die adjournment.
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AI-Generated Summary
House Bill 1932 seeks to repeal the Arkansas Corporate Franchise Tax Act of 1979 and streamline corporate filing requirements in the state. It introduces a new requirement for corporations to file an annual report directly with the Secretary of State, replacing the existing franchise tax reporting system. The bill defines which entities are classified as corporations and establishes the administrative procedures for the annual report, including confidentiality rules for certain data. It makes various conforming changes to existing Arkansas statutes to replace references to the old franchise tax act with the new annual reporting requirement. The bill mandates that state agencies and officials provide the Secretary of State with information on new and existing corporate entities. Additionally, it repeals the specific chapter of the Arkansas Code that previously governed the corporate franchise tax, effectively eliminating that tax obligation. The measure also updates terminology and internal reporting deadlines across multiple related business statutes.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries are corporations, limited liability companies, and other business entities operating in Arkansas. These entities benefit by the elimination of the corporate franchise tax, which reduces their overall tax burden and compliance costs associated with calculating and paying that specific tax. Additionally, businesses may benefit from a more consolidated and simplified administrative process for filing their required annual reports with the Secretary of State.
Who Might Suffer?
The primary entity negatively impacted is the State of Arkansas government, specifically the state budget, as the repeal of the corporate franchise tax results in a direct loss of tax revenue that was previously collected from these businesses. This may necessitate adjustments in state funding, as the franchise tax revenue was historically a component of state general revenues, including allocations to the Educational Adequacy Fund.
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