StructureCost2026

Arkansas: what each business structure costs a year

At $100,000 profit, an LLC taxed as an S corp costs $4,784 a year less than a sole proprietorship in Arkansas. All figures are 2026 tax and fees.

$4,784 a year

less as an LLC taxed as an S corp than as a sole proprietorship in Arkansas, at these numbers. That includes the state's pass-through entity tax election.

More settings revenue, salary, filing status, payroll costs, PTET

Arkansas, 2026: $100,000 profit, single filer

StructureYearly costvs yoursTo set up
Sole proprietorship yours $25,632 $0
Itemized: $25,632
Self-employment taxirs.gov, 2026 rates$14,130
Federal income taxirs.gov, 2026 rates$8,235
State income taxdfa.arkansas.gov, checked Oct 23, 2026$3,267
Yearly cost$25,632
Single-member LLC $25,730 +$98 $45
Itemized: $25,730
Arkansas LLC franchise taxsos.arkansas.gov, checked Oct 23, 2026$150
Self-employment taxirs.gov, 2026 rates$14,108
Federal income taxirs.gov, 2026 rates$8,210
State income taxdfa.arkansas.gov, checked Oct 23, 2026$3,262
Yearly cost$25,730
LLC taxed as an S corp lowest $20,848 −$4,784 $45
Itemized: $20,848
Payroll tax on your salaryirs.gov, 2026 rates$6,302
Payroll service and tax return (estimate)$1,800
Arkansas LLC franchise taxsos.arkansas.gov, checked Oct 23, 2026$150
Arkansas pass-through entity tax, paid by the company (elected)dfa.arkansas.gov, checked Oct 23, 2026$2,028
Federal income taxirs.gov, 2026 rates$9,259
State income tax, after the PTET exclusiondfa.arkansas.gov, checked Oct 23, 2026$1,309
Yearly cost$20,848
S corporation $20,848 −$4,784 $45
Itemized: $20,848
Payroll tax on your salaryirs.gov, 2026 rates$6,302
Payroll service and tax return (estimate)$1,800
Arkansas corporation franchise taxsos.arkansas.gov, checked Oct 23, 2026$150
Arkansas pass-through entity tax, paid by the company (elected)dfa.arkansas.gov, checked Oct 23, 2026$2,028
Federal income taxirs.gov, 2026 rates$9,259
State income tax, after the PTET exclusiondfa.arkansas.gov, checked Oct 23, 2026$1,309
Yearly cost$20,848
C corporation $29,442 +$3,810 $45
Itemized: $29,442
Payroll tax on your salaryirs.gov, 2026 rates$6,302
Payroll service and tax return (estimate)$2,000
Arkansas corporation franchise taxsos.arkansas.gov, checked Oct 23, 2026$150
State corporate income taxdfa.arkansas.gov, checked Oct 23, 2026$2,115
Federal corporate income tax (21%)irs.gov, 2026 rates$11,024
Federal income taxirs.gov, 2026 rates$5,008
State income taxdfa.arkansas.gov, checked Oct 23, 2026$2,843
Yearly cost$29,442
What these figures count
  • State income tax, and state taxes on the business itself: franchise, LLC, S corp, gross receipts and excise taxes.
  • Social Security and Medicare on both sides of an owner salary, federal unemployment tax and the state's new-employer rate.
  • The 20% qualified business income deduction with its income limits and the professional-service rule.
  • Yearly report fees, and a cost you can change for payroll and the business tax return.

Many S corp calculators leave out state taxes and the QBI deduction, which can make the election look better than it is.

When an S corp election pays in Arkansas

Electing S corp tax treatment for an LLC starts to pay in Arkansas at about $50,000 of profit, with the default salary and $1,800 a year for payroll and the extra tax return.

An S corp in Arkansas can elect to pay the state's income tax itself, a pass-through entity tax of 3.7%, and the owner gets that income left out of the personal return. The company deducts it on the federal return, so it is not held to the SALT cap. The calculator uses it when it lowers the totaldfa.arkansas.gov.

ProfitSole propLLCLLC as S corpC corp
$30,000$6,041$6,154$7,543$7,963
$50,000$11,280$11,391$11,097$13,284
$75,000$17,903$18,013$14,333$20,083
$100,000$25,632$25,730$20,848$29,442
$150,000$42,594$42,693$34,974$49,612
$200,000$60,136$60,249$49,892$68,967
$300,000$102,482$102,531$82,292$109,115

Single filer, no other income, revenue taken as 1.5 times profit, default salary. The lowest cost in each row is marked.

State fees and taxes in Arkansas

LLCCorporation
Filing to form$45Certificate of Organization (Form LL-01)$45Articles of Incorporation (Form DN-01)sos.arkansas.gov
Yearly reportAnnual LLC Franchise Tax Report, no feeAnnual Corporation Franchise Tax Report, no feesos.arkansas.gov
Report dueMay 1, starting the year after formationMay 1, starting the year after formation
Arkansas LLC franchise tax$150yesnosos.arkansas.gov
Arkansas corporation franchise tax$150noyessos.arkansas.gov

Not in the calculator: Arkansas cities and counties do not levy local income taxes. Some cities charge business license fees.

Switching calculators for Arkansas

By profession in Arkansas

Questions

Is an S corp worth it in Arkansas?

On these figures, from about $50,000 of profit. At $100,000 an LLC taxed as an S corp costs $20,848 a year against $25,730 for a plain LLC, $4,882 less. The saving comes from paying Social Security and Medicare tax on a salary instead of on all profit.

How much does an LLC cost per year in Arkansas?

The state charges Annual LLC Franchise Tax Report, no fee. LLCs can also owe Arkansas LLC franchise tax. Forming one costs $45.

Does Arkansas recognise the S corp election?

Yes. The federal election carries over with no separate state form. Since 2018 the federal S election is deemed made for Arkansas; Form AR1103 is no longer needed.

What income tax does Arkansas charge?

Arkansas taxes personal income in 2 brackets, from 2% to 3.7% (2026, single filer). C corporations pay 1% to 4.3% of net income.

How this page models Arkansas (2)

Sources checked 2026-10-23. Each figure links to the state or IRS page it comes from.

Other states