1) Arkansas Tax Registration
When opening a small business in the state of Arkansas, you should first search and apply for licenses, permits or identification numbers that correspond with the types of services you are offering. Some taxes that are commonly applied to businesses include withholding tax, sales and use tax and unemployment insurance tax. Depending on the nature of your business, addition taxes, such as franchise tax and motor fuel tax, may also apply. Visit the Arkansas Department of Finance and Administration’s Income Tax page for more information. The page includes news releases, a calendar of tax-related events and contact information for offices that may assist you with your tax concerns.
You can only visit the Tax Center page of Arkansas.gov, which includes county specific information on tax payments.
2) Business Licenses
The state of Arkansas requires occupations and businesses to acquire relevant permits and licenses before providing services. The cost and type of license that you need will depend on the nature of your business. For example, landscape architects, barbers, pharmacy technicians, athletic trainers and social workers will need to obtain different professional licenses. Visit the Professional Licensing page of Arkansas.gov for a list of possible licenses. You can search for specific licenses and then choose to apply or renew.
3) Local Permits
The local government in your area, such as that of your city or county, may require specific permits and licenses. Each municipality may have its own unique regulations. Here are some of the most common licenses and permits you may need.
4) Incorporation Filing
Arkansas businesses that operate as corporations, non-profit organizations, limited liability companies and partnerships must register with the Arkansas Secretary of State. Electronic forms and general information on incorporation filing are available on the Business and Commercial Services page of the Arkansas Secretary of State website.
If you want your business to take the form of a sole proprietorship, you are not required by law to register with the Secretary of State. However, in a sole proprietorship, the business’s name takes the form of the owner’s personal name and the owner must take personal liability for business-related debts and claims.
5) Doing Business As
A sole proprietorship or general partnership that intends to use a name other than the owner’s personal name must file for a fictitious name through a process that is called Doing Business As. You can file a Doing Business Under an Assumed Name Certificate at any local county clerk office.
In addition to registering with the county clerk, domestic corporations must also register fictitious names with the Arkansas Secretary of State.
6) Withholding Income Taxes
After the filing process of the 4th quarter of the year, Arkansas employers should keep records of employment tax information for the next four years or longer. Here are a few examples of items that should be included in your records:
The IRS website presents a more extensive list of items worthy of your record books. Review the list to ensure that your business continues to operate smoothly as it grows and progresses.
W-4 and W-2 Forms
Arkansas employees must present employers with a filled out copy of Form W-4, the withholding exemption certificate. The employer can then send the form to the IRS for documentation.
In addition to the withholding exemption certificate, Arkansas employers must also send Form W-2 to the Social Security Administration by the end of February. This should be done annually. Form W-2 holds information about the withheld taxes and paid wages of the business’s employees. When submitting this information electronically, the due date is extended to the end of March. Employers must ensure employees receive copies of Form W-2 by the end of the following January.
These links will provide information and electronic applications necessary for filing W-2 and W-4 forms:
7) Employee Eligibility Verification (Form I-9)
Within three days of beginning employment, new employees are responsible for completing Form I-9 and returning it to the employer. The form stands as proof of eligibility to work within the country. Each form should be kept on file by the employer.
Form I-9 can be found on the official site of the United States Citizenship and Immigration Services.
8) New Hire Reporting
Employers must collect and report information concerning new and returning employees within 20 days of beginning employment. This compiled information will include the employee’s name, contact information, social security number and health benefits. The employer will also have to disclose some personal information. This information should be sent to the Arkansas New Hire Reporting Center. You can register and submit information on the Reporting Center’s website.
9) Insurance Requirements
If your Arkansas-based business requires employees, you must address several additional tax expenses, including workers’ compensation and unemployment insurance taxes.
Workers’ compensation tax goes toward helping workers who are injured on the job. Information concerning this tax can also be found on the Arkansas Workers’ Compensation Commission’s website.
Unemployment insurance tax aids people who are willing and able to work yet still unemployed. Visit the Employers page of the Arkansas Department of Workforce Services website for more information.