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26-51-919. Pass-through entities — Definitions.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-919. Pass-through entities — Definitions.
(a) As used in this section:
(1) “Lower-tier pass-through entity” means a member of a pass-through entity that is itself a pass-through entity;
(2) “Member” means a shareholder of a Subchapter S corporation, a partner in a general partnership, a partner in a limited partnership, a partner in a limited liability partnership, a member of a limited liability company, or a beneficiary of a trust;
(3) “Nonresident” means:
(A) An individual who is not a resident of or domiciled in Arkansas during any part of the tax year;
(B) A business entity that does not have its commercial domicile in Arkansas during any part of the tax year; or
(C) A trust not organized in Arkansas; and
(4) “Pass-through entity” means a business entity that for the applicable tax year is:
(A) A corporation treated as a Subchapter S corporation under § 26-51-409, a general partnership, limited partnership, limited liability partnership, limited liability company, or a trust; and
(B) Not taxed as a corporation for federal or Arkansas income tax purposes.
(b)(1)(A)(i) A pass-through entity shall withhold Arkansas income tax at the highest income tax rate levied under §§ 26-51-201, 26-51-202, and 26-51-205 on the share of income of the pass-through entity that is derived from or attributable to sources within this state and distributed to each nonresident member.
(ii) The pass-through entity is liable to the Secretary of the Department of Finance and Administration for the payment of the tax required to be withheld and is not liable to the member for the amount withheld and paid to the secretary.
(B)(i) A lower-tier pass-through entity shall withhold and pay income tax on the share of income distributed by the lower-tier pass-through e
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-919
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:26-51-919
Source file: gov.ar.code.title.26.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 9aaeca5269c3f3d7f077d3463e27be868512e822b5b9c61bb22fe5b254ee246f
Source location: content.xml paragraph 15021
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26-51-919. Pass-through entities — Definitions.
(a) As used in this section:
(1) “Lower-tier pass-through entity” means a member of a pass-through entity that is itself a pass-through entity;
(2) “Member” means a shareholder of a Subchapter S corporation, a partner in a general partnership, a partner in a limited partnership, a partner in a limited liability partnership, a member of a limited liability company, or a beneficiary of a trust;
(3) “Nonresident” means:
(A) An individual who is not a resident of or domiciled in Arkansas during any part of the tax year;
(B) A business entity that does not have its commercial domicile in Arkansas during any part of the tax year; or
(C) A trust not organized in Arkansas; and
(4) “Pass-through entity” means a business entity that for the applicable tax year is:
(A) A corporation treated as a Subchapter S corporation under § 26-51-409, a general partnership, limited partnership, limited liability partnership, limited liability company, or a trust; and
(B) Not taxed as a corporation for federal or Arkansas income tax purposes.
(b)(1)(A)(i) A pass-through entity shall withhold Arkansas income tax at the highest income tax rate levied under §§ 26-51-201, 26-51-202, and 26-51-205 on the share of income of the pass-through entity that is derived from or attributable to sources within this state and distributed to each nonresident member.
(ii) The pass-through entity is liable to the Secretary of the Department of Finance and Administration for the payment of the tax required to be withheld and is not liable to the member for the amount withheld and paid to the secretary.
(B)(i) A lower-tier pass-through entity shall withhold and pay income tax on the share of income distributed by the lower-tier pass-through entity to each of its nonresident members.
(ii) The secretary shall apply the tax withheld and paid by a pass-through entity on distributions to a lower-tier pass-through entity to the withholding required of that lower-tier pass-through entity.
(2)(A) On or before the due date for the pass-through entity's composite income tax return described in subsection (d) of this section, a pass-through entity shall file an annual return with the secretary showing the total amount of income distributed or credited to its nonresident members and the amount of tax withheld and shall remit the amount of tax withheld.
(B) The annual return shall be in an electronic format prescribed by the secretary.
(3) A pass-through entity shall annually furnish a nonresident member of the pass-through entity with a record of the amount of tax withheld on behalf of the nonresident member no later than the fifteenth day of the fourth month following the end of the pass-through entity's tax year.
(c) A pass-through entity is not required to withhold tax for a nonresident member if:
(1) The nonresident member has a pro rata or distributive share of income of the pass-through entity from doing business in or deriving income from sources within this state of less than one thousand dollars ($1,000) per year;
(2) The secretary has determined that the nonresident member's income is not subject to withholding;
(3) The nonresident member elects to have the tax due paid as part of a composite return filed by the pass-through entity under subsection (d) of this section;
(4) The pass-through entity:
(A) Is a publicly traded partnership as defined by 26 U.S.C. § 7704(b), as in effect on January 1, 2005, that is treated as a partnership for the purposes of federal income taxation; and
(B) Has agreed to file an annual information return reporting the name, address, and taxpayer identification number of each member with an annual Arkansas income greater than five hundred dollars ($500) along with any other information requested by the secretary;
(5)(A) The pass-through entity has filed with the secretary on forms prescribed by the secretary the nonresident member's signed agreement to timely file an Arkansas corporation, nonresident individual, or trust income tax return, to pay any tax due on the return, and to be subject to the jurisdiction of the Department of Finance and Administration in the courts of this state for the purpose of determining and collecting any Arkansas income tax together with interest and penalties owed by the nonresident member.
(B)(i) The department may revoke the exception from the withholding requirement in subdivision (c)(5)(A) of this section if it is determined that the nonresident member is not abiding by the terms of the agreement.
(ii) At the time of revocation, the department shall notify the pass-through entity that withholding is required for future distributions to the nonresident member whose exception is revoked; or
(6) The income received by the nonresident member is exempt from Arkansas income tax pursuant to § 26-51-202(e).
(d)(1) A pass-through entity may file a composite income tax return on behalf of electing nonresident members reporting and paying Arkansas income tax at the highest income tax rate under §§ 26-51-201, 26-51-202, and 26-51-205 on the nonresident member's pro rata or distributive shares of income of the pass-through entity from doing business in or deriving income from sources within this state.
(2) A nonresident member whose only source of income within this state is from one (1) or more pass-through entities may elect to be included in a composite return filed pursuant to this section.
(3) A nonresident member who has been included in a composite return may file an income tax return and shall receive credit for income tax paid on the nonresident member's behalf by the pass-through entity.
(4) On or before the fifteenth day of the fourth month following the end of the pass-through entity's tax year, a pass-through entity shall file an annual composite return with the secretary showing the total amount of income distributed or credited to its nonresident members and the amount of tax withheld and shall remit the tax due on the composite income tax return.
(e) The secretary may promulgate rules necessary to administer this section.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** For purposes of this title, except as provided in subsection (c), a publicly traded partnership shall be treated as a corporation.
**(b) Publicly traded partnership** For purposes of this section, the term “publicly traded partnership” means any partnership if—
(1) interests in such partnership are traded on an established securities market, or
(2) interests in such partnership are readily tradable on a secondary market (or the substantial equivalent thereof).
**(c) Exception for partnerships with passive-type income**
(1) **In general** — Subsection (a) shall not apply to any publicly traded partnership for any taxable year if such partnership met the gross income requirements of paragraph (2) for such taxable year and each preceding taxable year beginning after December 31, 1987, during which the partnership (or any predecessor) was in existence. For purposes of the preceding sentence, a partnership shall not be treated as being in existence during any period before the 1st taxable year in which such partnership (or a predecessor) was a publicly traded partnership.
(2) **Gross income requirements** — A partnership meets the gross income requirements of this paragraph for any taxable year if 90 percent or more of the gross income of such partnership for such taxable year consists of qualifying income.
(3) **Exception not to apply to certain partnerships which could qualify as regulated investment companies** — This subsection shall not apply to any partnership which would be described in section 851(a) if such partnership were a domestic corporation. To the extent provided in regulations, the preceding sentence shall not apply to any partnership a principal activity of which is the buying and selling of commodities (not described in section
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 7704
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 7704. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 4039
TITLE 26—INTERNAL REVENUE CODE
§ 7704
Pub. L. 108–311, set out as a note under section 2 of this
title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100–647 effective, except as
otherwise provided, as if included in the provision of
the Tax Reform Act of 1986, Pub. L. 99–514, to which
such amendment relates, see section 1019(a) of Pub. L.
100–647, set out as a note under section 1 of this title.
EFFECTIVE DATE
Section applicable to bonds issued after Aug. 15, 1986,
except as otherwise provided, see sections 1311 to 1318 of
Pub. L. 99–514, set out as an Effective Date; Transi-
tional Rules note under section 141 of this title.
§ 7704. Certain publicly traded partnerships
treated as corporations
(a) General rule
For purposes of this title, except as provided
in subsection (c), a publicly traded partnership
shall be treated as a corporation.
(b) Publicly traded partnership
For purposes of this section, the term ‘‘pub-
licly traded partnership’’ means any partnership
if—
(1) interests in such partnership are traded
on an established securities market, or
(2) interests in such partnership are readily
tradable on a secondary market (or the sub-
stantial equivalent thereof).
(c) Exception for partnerships with passive-type
income
(1) In general
Subsection (a) shall not apply to any pub-
licly traded partnership for any taxable year if
such partnership met the gross income re-
quirements of paragraph (2) for such taxable
year and each preceding taxable year begin-
ning after December 31, 1987, during which the
partnership (or any predecessor) was in exist-
ence. For purposes of the preceding sentence,
a partnership shall not be treated as being in
existence during any period before the 1st tax-
able year in which such partnersh
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 7704
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 7704. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-201. Individuals, trusts, and estates — Definition.
(a) For tax years beginning on and after January 1, 2014, a tax is imposed upon, and with respect to, the entire income of every resident, individual, trust, or estate. The tax shall be levied, collected, and paid annually upon the entire net income as defined and computed in this chapter at the following rates, giving effect to the tax credits provided hereafter, in the manner set forth:
(1) On the first four thousand two hundred ninety-nine dollars ($4,299) of net income or any part thereof, nine-tenths percent (0.9%);
(2) On the next four thousand one hundred dollars ($4,100) of net income or any part thereof, two and five-tenths percent (2.5%);
(3) On the next four thousand two hundred dollars ($4,200) of net income or any part thereof, three and five-tenths percent (3.5%);
(4) On the next eight thousand four hundred dollars ($8,400) of net income or any part thereof, four and five-tenths percent (4.5%);
(5) On the next fourteen thousand one hundred dollars ($14,100) of net income or any part thereof, six percent (6%);
(6) On net income of thirty-five thousand one hundred dollars ($35,100) and above, seven percent (7%);
(7) Every resident, individual, trust, or estate having net income greater than or equal to twenty-two thousand two hundred dollars ($22,200), but less than or equal to seventy-nine thousand three hundred dollars ($79,300), shall determine the amount of income tax due under this subsection in accordance with the table set forth below:
From Less Than or Equal To Rate $0 $4,499 0.75% $4,500 $8,899 2.5% $8,900 $13,399 3.5% $13,400 $22,199 4.5% $22,200 $37,199 5% $37,200 $79,300 5.9%
Click to view table.
(8) Every resident, individual, trust, or estate having net
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-201
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-201. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-202. Nonresidents — Definitions.
(a) A tax is imposed and shall be assessed, levied, collected, and paid annually at the rates specified in § 26-51-201 upon and with respect to the entire net income as defined in this chapter, except as provided in this section, from all property owned and from every business, trade, or occupation carried on in this state by individuals, corporations, partnerships, trusts, or estates not residents of the State of Arkansas.
(b)(1) Each nonresident as defined in § 26-51-102 shall file income tax returns with the State of Arkansas and pay the tax without distinction, or incident to the laws of the nonresident's resident state.
(2) It is the specific intention of the General Assembly that the tax shall be collected from property owned and from the conduct of every business, trade, or occupation, whether or not the individuals, corporations, partnerships, trusts, or estates are qualified to do business in the State of Arkansas and whether or not such business, trade, or occupation shall be conducted in interstate commerce.
(c) However, the payment of the tax shall be based upon net income properly allocated as net income arising from the ownership of property and the conduct of a business, trade, or occupation in the State of Arkansas.
(d) Additionally, no income tax shall be due the State of Arkansas from a nonresident beneficiary on income received from a trust or estate being administered by a resident trustee or personal representative except on income derived by the trust or estate from:
(1) Lands situated in this state, including gains from any sale of the lands situated in this state;
(2) Any interest in land situated in this state, including, without limitation, chattels real, including gains from any sale of an i
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-202
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-202. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-205. Corporations — Work Force 2000 Development Fund. [Effective until January 1, 2021.]
(a) Every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of the State of Arkansas, received by such corporation during the income year, on the following basis:
(1) On the first $3,000 of net income or any part thereof 1%
On the second $3,000 of net income or any part thereof 2%
On the next $5,000 of net income or any part thereof 3%
On the next $14,000 of net income or any part thereof 5%
On the next $75,000 of net income or any part thereof, but not exceeding $100,000 6%
(2) On net income exceeding one hundred thousand dollars ($100,000), a flat rate of six and one-half percent (6½%) shall be applied to the entire net income.
(b) Every foreign corporation doing business within the jurisdiction of this state shall pay annually an income tax on the proportion of its entire net income as now determined by the income tax laws of Arkansas, on the following basis:
(1) On the first $3,000 of net income or any part thereof 1%
On the second $3,000 of net income or any part thereof 2%
On the next $5,000 of net income or any part thereof 3%
On the next $14,000 of net income or any part thereof 5%
On the next $75,000 of net income or any part thereof, but not exceeding $100,000 6%
(2) On net income exceeding one hundred thousand dollars ($100,000), a flat rate of six and one-half percent (6½%) shall be applied to the entire net income.
(c)(1)(A) There is created on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-205
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-205. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-205. Corporations — Work Force 2000 Development Fund. [Effective January 1, 2021.]
(a)(1) Every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of the State of Arkansas, received by the corporation during the income year, on the following basis:
(A) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
(B) On the second three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
(C) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
(D) On the next fourteen thousand dollars ($14,000) of net income or any part thereof, five percent (5%);
(E) On the next seventy-five thousand dollars ($75,000) of net income or any part thereof, but not exceeding one hundred thousand dollars ($100,000), six percent (6%); and
(F) On net income exceeding one hundred thousand dollars ($100,000), six and five-tenths percent (6.5%).
(2) For the tax year beginning January 1, 2021, every corporation organized under the laws of this state shall pay annually an income tax with respect to carrying on or doing business on the entire net income of the corporation, as now defined by the laws of this state, received by the corporation during the income year, on the following basis:
(A) On the first three thousand dollars ($3,000) of net income or any part thereof, one percent (1%);
(B) On the next three thousand dollars ($3,000) of net income or any part thereof, two percent (2%);
(C) On the next five thousand dollars ($5,000) of net income or any part thereof, three percent (3%);
(D) On the next fourteen tho
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-205
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-205. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-409. Federal Subchapter S adopted.
(a) Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., as in effect on January 1, 2019, regarding small business corporations, is adopted for the purpose of computing Arkansas income tax liability.
(b)(1)(A) A corporation shall be treated as a Subchapter S corporation for Arkansas income tax purposes if the corporation has elected Subchapter S treatment for federal income tax purposes for the same tax year.
(B) An election made under Subchapter S of the Internal Revenue Code, 26 U.S.C. § 1361 et seq., for federal income tax purposes is deemed to have been made for Arkansas income tax purposes.
(2) A corporation that has elected to be treated as a Subchapter S corporation for federal income tax purposes shall not elect to be treated as a Subchapter C corporation for Arkansas income tax purposes.
(3) When filing an Arkansas Subchapter S income tax return, a corporation shall attach to its Arkansas Subchapter S income tax return a complete copy of the corporation's federal Subchapter S income tax return filed with the Internal Revenue Service for that taxable year.
(c)(1) However, all nonresident shareholders of Subchapter S corporations receiving a prorated share of income, loss, deduction, or credit pursuant to the provisions of this section must file a properly executed state income tax return with the Secretary of the Department of Finance and Administration and remit the applicable state income tax due.
(2) Failure to so report and remit on the part of any nonresident shareholder shall be grounds upon which the secretary may revoke the corporation's Subchapter S election and collect the tax from the corporation by any manner authorized by the Income Tax Act of 1929, § 26-51-101 et seq.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-409
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-409. This identifies an authority to review, not proof of applicability.