Arkansas Business License

Are you looking to open a small business in Arkansas? If so, you should find out what type of occupational licenses, business permits, or identification numbers are needed for the type of operation you propose. A few that Arkansas business owners often encounter include sales tax, use tax, income withholding tax, and state unemployment insurance tax. Some businesses could be subject to additional taxes such as the franchise tax or motor fuel tax. To find out which taxes may apply to you, review the Arkansas Department of Finance and Administration’s Income Tax page. On this page, you will find news releases and calendars that spell out tax-related events. Contact information for individuals who can provide assistance with tax concerns is available there as well.

For information on tax payments that is specific to your county, visit the Arkansas.gov and then go to the Tax Center page.

New business owners as well as those involved in certain occupations are required by the state of Arkansas to obtain the relevant permits and licenses. These must be acquired before you can begin providing goods or services. Some individuals who may be required to obtain a professional license include barbers, landscape architects, athletic trainers, pharmacy technicians, and social workers. To learn the requirements, visit the Professional Licensing page located at Arkansas.gov to view a list. While there, you can search for a specific license, apply for a new one, or request a renewal.

Some cities and counties in Arkansas have their own laws regarding permits and licenses. As such, you should check with your local government to find out what its regulations are. Some of the most common local licenses and permits an Arkansas business owner may need include:

• Business License

• Tax Permit

• Zoning Permit

• Alarm Permit

• Building Permit

• Health Permit

• Occupational Permit

• Signage Permit

Any Arkansas business that operates as a corporation, Limited Liability Company (LLC), non-profit organization, or partnership must first register their entity with the Arkansas Secretary of State’s office. You may do this electronically by navigating to the Business and Commercial Services page, which is found on the Arkansas Secretary of State’s website. There you will find the necessary electronic forms as well as some general information on how to go about filing.

Things are a little easier if you operate a sole proprietorship in Arkansas. By running a sole proprietorship, you will not be required to register your business with the Arkansas Secretary of State. Keep in mind that in order to bypass registration, you will need to operate the business under your own name. You must also be willing to take personal responsibility for any debts and claims you may incur that are related to your business.

There may be times when a sole proprietor wishes to use a business name other than his or her own. In those cases, individuals must request a fictitious name via a process that is referred to as “Doing Business As” or DBA. To do this, you can complete a Doing Business Under an Assumed Name certificate at your local clerk’s office.

Once you have registered with your country clerk, you will then need to register your fictitious business name with the Arkansas Secretary of State.

Employer Requirements

After filing taxes during the fourth quarter of each year, Arkansas employers should retain employment tax records for at least four more years. To ensure these records are as complete and accurate as possible, include the following information in your files:

• Personal information concerning your employees

• Employer Identification Number (EIN)

• Any other relevant employer information

• Wage, pension and annuity data

These are only a few things that may be required in your tax records. To see an extensive list, please visit the IRS website, where you will find more detailed information. Review the list and keep it handy so you can remain in compliance with these regulations as your business continues to grow.

IRS W-4 and W-2 Forms

When beginning employment, Arkansas workers must provide their employers with a completed copy of the W-4 form. The W-4 form is an exemption certificate and is used to determine the amount of tax withholding. Upon receiving this form, submit it to the IRS for their own records.

Aside from the W-4 form, Arkansas employers are also required to submit a W-2 form for each employee directly to the Social Security Administration (SSA). The W-2 form contains information about the amount of wages an employee has earned and the amount of taxes that were withheld.

This form should be submitted no later than the last day of February each year. If you are submitting the form electronically, the deadline for receipt is the end of March. Ensure that all your employees receive a copy of their own personal W-2 form no later than the last day of January each year.

Keeping up with all the requirements needed to file W-2 and W-4 forms can be strenuous. Use these links to assist you with filing and to ensure you are up to date with all the latest information.

• The SSA’s page on Employer W-2 Filing

• Employer Tax Guide provided by the IRS

Arkansas employees are also required to provide proof that they are eligible to work in the United States. They do this by providing their employers with an I-9 form no later than three days after beginning a new job. The employer keeps this form on file, and it serves as proof that an individual is eligible to seek employment in this country.

Visit the United States Citizenship and Immigration Services’ official website in order to obtain a copy of the I-9 form.

No later than 20 days after beginning employment, Arkansas employers must collect certain information and then report it to the state’s New Hire Reporting Center. Some of the information that will be transmitted include the employee’s full name, Social Security number, contact information, and whether or not that individual has health benefits. There will be some additional information that you as the employer will have to disclose as well. To register your business and submit information electronically, visit the Reporting Center’s website.

For Arkansas-based businesses that hire employees, several other tax expenses must be addressed as well. These include at a minimum worker’s compensation tax and unemployment insurance taxes.

The purpose of worker’s compensation tax is to help individuals who become injured while on the job. To find out more information about this tax, visit the Arkansas Worker’s Compensation Commission’s website.

On the other hand, unemployment insurance tax assists those who become unemployed due to no fault of their own. To benefit, individuals must be able to work and actively seeking employment. Visit the Arkansas Department of Workforce Service’s Employer’s page to find out more information on unemployment tax in this state.