Business Overview
Arkansas boasts a diverse economy with strengths in agriculture, manufacturing, logistics, and retail. Home to corporate giants like Walmart and Tyson Foods, the state offers low business costs, a central location, and comprehensive workforce training programs to support business growth and development.
Key Facts & Figures
| Category | Details |
| Capital | Little Rock |
| Major Cities | Little Rock, Fort Smith, Fayetteville, Springdale |
| State Sales Tax Rate | 6.50% |
| Local Sales Tax Rate | Up to 5.125% additional (city, county, and special districts) |
| Corporate Income Tax | 4.9% flat rate |
| Physical Nexus Threshold | Physical presence including employees, offices, warehouses, or representatives |
| Economic Nexus Threshold | $100,000 or 200 transactions annually |
Did you know?
Arkansas is home to Walmart’s global headquarters and hosts a robust agricultural technology sector, particularly in rice, soybean, and poultry production.
Setup & Compliance
Arkansas offers a clear pathway for business formation with moderate regulatory requirements.
Setting Up Your Arkansas Business:
- Select Your Business Entity: Evaluate tax and liability considerations for your specific business needs.
- Register Your Business: File with the Arkansas Secretary of State’s office (Corporations, LLCs) or county clerk (sole proprietorships, partnerships).
- Obtain Required Licenses: Secure state and local business licenses, plus industry-specific permits if needed.
- Register for Tax Accounts: Register with the Arkansas Department of Finance and Administration for sales tax and withholding.
- Meet Employer Requirements: Register for unemployment insurance and workers’ compensation if hiring employees.
Ongoing Compliance Considerations:
- Franchise Tax: Arkansas LLCs and corporations must file annual franchise tax reports.
- Sales Tax Obligations: Collect and remit state sales tax (6.5%) plus applicable local taxes.
- Annual Reports: Most business entities must file annual reports with the Secretary of State.
- Industry Regulations: Certain industries face additional regulatory oversight and licensing requirements.
Hiring & Payroll
Arkansas has specific employment regulations that businesses must understand and follow.
Arkansas Payroll Requirements:
- Unemployment Insurance: Rates range from 0.1% to 14.1% on first $10,000 of wages.
- State Income Tax Withholding: Required for all employers.
- Workers’ Compensation Insurance: Mandatory for employers with 3+ employees.
Employment Regulations:
- Minimum Wage: $11.00 per hour.
- Arkansas follows federal overtime regulations (time-and-a-half for hours over 40 per week).
- New hire reporting required within 20 days.
- Final wages must be paid on next regular payday.
- Arkansas is an at-will employment state with right-to-work laws.
State Incentives
Arkansas offers targeted economic incentives to promote business growth and job creation.
Key Business Incentives:
- Create Excellent Schools Today (CREATE) Tax Credit: Supports educational improvement projects.
- Quick Action Closing Fund: Provides financial assistance for major business investments.
- Investment Tax Credit: Reduces tax liability for significant capital investments.
Small Business & Startup Support:
- Arkansas Small Business Development Center: Provides comprehensive business advisory services.
- Rural Development Grants: Support for businesses in rural communities.
- Technology and Innovation Matching Grants: Supports emerging tech businesses.
Regulatory Considerations
Arkansas provides a regulatory framework balancing business flexibility with public protection.
Key Business Regulations:
- Data Privacy: Laws governing the protection and secure handling of personal information.
- Environmental Compliance: Regulations specific to agricultural and industrial operations.
- Professional Licensing: State-mandated licensing for various professional services.
Additional Regulatory Areas:
- Agricultural Compliance: Special regulations for farming and food production businesses.
- Small Business Reporting: Specific documentation requirements for small enterprises.
Business Overview
Arkansas boasts a diverse economy with strengths in agriculture, manufacturing, logistics, and retail. Home to corporate giants like Walmart and Tyson Foods, the state offers low business costs, a central location, and comprehensive workforce training programs to support business growth and development.
Key Facts & Figures
| Category | Details |
| Capital | Little Rock |
| Major Cities | Little Rock, Fort Smith, Fayetteville, Springdale |
| State Sales Tax Rate | 6.50% |
| Local Sales Tax Rate | Up to 5.125% additional (city, county, and special districts) |
| Corporate Income Tax | 4.9% flat rate |
| Physical Nexus Threshold | Physical presence including employees, offices, warehouses, or representatives |
| Economic Nexus Threshold | $100,000 or 200 transactions annually |
Did you know?
Arkansas is home to Walmart’s global headquarters and hosts a robust agricultural technology sector, particularly in rice, soybean, and poultry production.
Setup & Compliance
Arkansas offers a clear pathway for business formation with moderate regulatory requirements.
Setting Up Your Arkansas Business:
- Select Your Business Entity: Evaluate tax and liability considerations for your specific business needs.
- Register Your Business: File with the Arkansas Secretary of State’s office (Corporations, LLCs) or county clerk (sole proprietorships, partnerships).
- Obtain Required Licenses: Secure state and local business licenses, plus industry-specific permits if needed.
- Register for Tax Accounts: Register with the Arkansas Department of Finance and Administration for sales tax and withholding.
- Meet Employer Requirements: Register for unemployment insurance and workers’ compensation if hiring employees.
Ongoing Compliance Considerations:
- Franchise Tax: Arkansas LLCs and corporations must file annual franchise tax reports.
- Sales Tax Obligations: Collect and remit state sales tax (6.5%) plus applicable local taxes.
- Annual Reports: Most business entities must file annual reports with the Secretary of State.
- Industry Regulations: Certain industries face additional regulatory oversight and licensing requirements.
Hiring & Payroll
Arkansas has specific employment regulations that businesses must understand and follow.
Arkansas Payroll Requirements:
- Unemployment Insurance: Rates range from 0.1% to 14.1% on first $10,000 of wages.
- State Income Tax Withholding: Required for all employers.
- Workers’ Compensation Insurance: Mandatory for employers with 3+ employees.
Employment Regulations:
- Minimum Wage: $11.00 per hour.
- Arkansas follows federal overtime regulations (time-and-a-half for hours over 40 per week).
- New hire reporting required within 20 days.
- Final wages must be paid on next regular payday.
- Arkansas is an at-will employment state with right-to-work laws.
State Incentives
Arkansas offers targeted economic incentives to promote business growth and job creation.
Key Business Incentives:
- Create Excellent Schools Today (CREATE) Tax Credit: Supports educational improvement projects.
- Quick Action Closing Fund: Provides financial assistance for major business investments.
- Investment Tax Credit: Reduces tax liability for significant capital investments.
Small Business & Startup Support:
- Arkansas Small Business Development Center: Provides comprehensive business advisory services.
- Rural Development Grants: Support for businesses in rural communities.
- Technology and Innovation Matching Grants: Supports emerging tech businesses.
Regulatory Considerations
Arkansas provides a regulatory framework balancing business flexibility with public protection.
Key Business Regulations:
- Data Privacy: Laws governing the protection and secure handling of personal information.
- Environmental Compliance: Regulations specific to agricultural and industrial operations.
- Professional Licensing: State-mandated licensing for various professional services.
Additional Regulatory Areas:
- Agricultural Compliance: Special regulations for farming and food production businesses.
- Small Business Reporting: Specific documentation requirements for small enterprises.
