(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).
