Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 65 - ELECTIVE PASS-THROUGH ENTITY TAX ACT (§§ 26-65-101 — 26-65-108) › Section 26-65-107 - Required annual payment - Definition

(a)
As used in this section, "required annual payment" means the lesser of:
(1)
Ninety percent (90%) of the tax due under this chapter for the taxable year; or
(2)
If the affected business entity filed a return for the preceding taxable year, one hundred percent (100%) of the tax due under this chapter as reported on that return.
(b)
(1)
An affected business entity that is required to pay tax under this chapter shall make a required annual payment each taxable year in four (4) estimated installments on the fifteenth day of the:
(A)
Fourth month of the taxable year;
(B)
Sixth month of the taxable year;
(C)
Ninth month of the taxable year; and
(D)
First month of the next-succeeding taxable year.
(2)
An affected business entity may elect to pay a required installment payment under this subsection before the date specified in subdivision (b)(1) of this section.
(3)
Except as otherwise provided in this section, the amount of each installment payment required under this subsection shall be twenty-five percent (25%) of the required annual payment.
(c)
(1)
If an affected business entity establishes that the affected business entity's annualized income installment calculated under subdivision (c)(3) of this section is less than the required annual payment, the required installment payment under this section is the annualized income installment.
(2)
However, an affected business entity shall recapture a reduction in a required installment payment resulting under subdivision (c)(1) of this section by increasing:
(A)
The amount of the next required installment payment by the amount of the reduction; and
(B)
Subsequent required installment payments to the extent the reduction was not previously recaptured under this subsection.
(3)
The annualized income installment under this section is the difference between:
(A)
The product of:
(i)
The tax imposed under this chapter for the taxable year that would be due if income subject to the tax imposed under this chapter for the months in the taxable year ending before the due date of the installment were annualized; and
(ii)
The following percentage:
(a)
For the first required installment payment, twenty-two and five-tenths percent (22.5%);
(b)
For the second required installment payment, forty-five percent (45%);
(c)
For the third required installment payment, sixty-seven and five-tenths percent (67.5%); and
(d)
For the fourth required installment payment, ninety percent (90%); and
(B)
The aggregate amount of any prior required installments for the taxable year.
(d)
(1)
Except as otherwise provided in this section, if an affected business entity makes an underpayment of estimated tax under this section, the penalties and interest provided for under §
26-18-208
shall be added to the tax imposed under this chapter.
(2)
The amount of an underpayment under this subsection is the amount by which the required installment exceeds the amount, if any, of the installment paid on or before the due date of the installment.
(3)
A payment of estimated tax under this section shall be credited against unpaid or underpaid required installments in the order in which the installments are required to be paid.
(e)
Payment of the estimated tax under this section or any required installment of estimated tax is a payment on account of the tax imposed under this chapter.
Added by Act 2021, No. 362,§ 2, eff. for tax years beginning on or after 1/1/2022..