(January 2015) Fiscal action taken by the 90th General Assembly has focused on income and capital gains tax rates,1 while ignoring Arkansas’ non-competitive top corporate tax rate, among the highest in the region.


Arkansas’ top2 corporate tax rate is in the top tier of states in the region:3


Louisiana        8.5%
Arkansas        6.5%
Tennessee        6.5%
West Virginia        6.5%
Alabama4        6.5%
Georgia        6.0%
Kentucky        6.0%
North Carolina        6.0%
Virginia        6.0%
Florida5        5.5%
Mississippi        5.0%
South Carolina        5.0%
Texas6          —


Other States with Lower Corporate Rates


Eleven7 other states also have lower corporate rates.  These include Nevada, South Dakota, Washington and Wyoming, which do not impose a corporate income tax.


–Greg Kaza

1  The income tax rate was cut for those earning between $21,000 and $75,000.  A capital gains tax exemption was reduced from 50 to 40%.

2  Federation of State Tax Administrators.  Arkansas has six brackets, with the top rate starting at $100,001.

3  Federation of State Tax Administrators, “Range of State Corporate Income Tax Rates,” as of January 1, 2014. http://www.taxadmin.org/fta/rate/corp_inc.pdf

4  Alabama imposes a flat rate on corporate income.

5  Florida also has a $50,000 exemption.

6  Texas imposes a franchise tax on entities with more than $1,030,000 total revenues at a 1.0% rate, or 0.5% “for entities primarily engaged in retail or wholesale trade, on lesser of 70% of total revenues or 100% of gross receipts after deductions for either compensation or cost of goods sold.

7  Federation of State Tax Administrators: Colorado (4.63%), Hawaii (6.4%), Kansas (4.0%), Michigan (6.0%), Missouri (6.25%), Nevada (0), North Dakota (4.53%), Oklahoma (6.0%), South Dakota (0), Washington (0), and Wyoming (0).