Updated September 4, 2026. Quick answer: Arkansas requires no separate S-corp election of its own: a valid federal election is automatically deemed made for Arkansas too, and a federal S-corp may not file as a C-corp here. What does differ is the franchise tax that comes with the corporate form S status requires: it scales with capital-stock value, while an Arkansas LLC pays a flat $150 no matter its size.
Does this state require its own election
No separate Arkansas filing exists to obtain S-corp status; the federal election controls. Arkansas does not require its own S-corp election. ACA 26-51-409(b) deems a valid federal Subchapter S election made for Arkansas income tax purposes too, and a corporation that has elected federal S status may not elect C-corp treatment for Arkansas purposes. This is a change from the law before 2018, which required a separate state election, Form AR1103, with every shareholder’s written consent; Act 434 of 2017 amended ACA 26-51-409(b) and repealed ACA 26-51-413(b), the old consent-filing provision, effective for tax years beginning on or after January 1, 2018.
“ACA 26-51-409(b) states that an election made under Subchapter S for federal income tax purposes is deemed to have been made for Arkansas income tax purposes. It also states that a corporation that has elected to be Sub S for federal purposes shall not elect to be treated as a C corporation for Arkansas income tax purposes.”
Arkansas Department of Finance and Administration, 2025 Sub-Chapter S Corporation Income Tax Instructions
What it costs at the entity level
Arkansas’s annual franchise tax, administered by the Secretary of State, taxes corporations on a capital-stock formula; an LLC instead pays a flat $150 no matter its size. This tracks corporate legal form generally rather than the S election specifically, but S status requires the corporate form, so the two travel together in practice.
| What Arkansas charges | Figure |
|---|---|
| Rate | 0.3% of Arkansas-apportioned par value of outstanding capital stock (corporations); flat $150 (LLCs) |
| Minimum | $150 for both, but a corporation’s bill rises with capital stock value while an LLC’s cannot |
“MINIMUM TAX DUE $150 … IF LESS THAN $150 PAY $150 … CORPORATIONS WITHOUT AUTHORIZED STOCK PAY $300 … Arkansas Capital Stock X .003”
Arkansas Secretary of State, Annual Corporation Franchise Tax Report 2026
The comparison against a plain LLC
An Arkansas LLC files nothing extra and pays a flat $150 a year no matter its size. An Arkansas S-corp files no separate election either, since the federal one is deemed made here too, but its annual franchise tax can run above $150 as capital stock value rises, a scaling an LLC’s flat fee never does.
What this does not model
This page does not model the dollar franchise-tax gap at any specific capital-stock level; it is $150 up to a threshold and rises from there, and the exact break point was not computed this session. It also does not model the $300 flat fee Arkansas charges a corporation with no authorized stock, a narrower edge case an LLC never faces at all.
No federal tax modelling is repeated here; see the federal S-corp election calculator for the payroll-tax and QBI mechanics this page assumes but does not recompute. No personal Arkansas income tax on the pass-through income itself is modelled either.
Sources
Every figure on this page is read from the text quoted above, fetched directly from the state’s own site or code, as read on September 4, 2026.
| What it establishes | Source |
|---|---|
| Whether Arkansas requires its own S-corp election | Arkansas Department of Finance and Administration, 2025 Sub-Chapter S Corporation Income Tax Instructions |
| What Arkansas charges an S-corp at the entity level | Arkansas Secretary of State, Annual Corporation Franchise Tax Report 2026 |
General consumer information, not financial, tax or legal advice. State rules are as published by the cited source on September 4, 2026 and change; your own facts govern, and an S-corporation election is a decision to take with a tax professional who has seen your books.