Because there is extensive cost in time, fees and red tape involved, obtaining licenses, permits, and tax requirements may be one of the last steps to take before opening a business. There are different requirements at the city, county, state and federal levels that apply to different aspects of businesses. This information is arranged by level of government. Local concerns pertain to the Little Rock/North Little Rock metro area. Inquire with local municipalities if the business is located outside of this area.
An agency or board specific to a given discipline regulates many occupations and/or businesses. Make sure that the business or job function you perform is properly licensed by the appropriate regulatory agency. It is impossible to list all legal requirements for any business. This handout offers guidelines only. This is why it is so important to have experience in or knowledge of the particular business. Business research should be thorough and ongoing to keep up with regulatory changes as they occur. Ask a lot of questions.
Before applying for a business license, first verify that the type of business & its physical location complies with local zoning regulations. Although there is no fee associated with verifying zoning compliance, permit application fees to change zoning status vary.
Zoning laws vary significantly throughout the state. Where zoning laws apply, they are strictly enforced.
Generally, zoning approval is a one-time occurrence.
Zoning offices can supply business license applications.
If the proposed business site is not in compliance, you must apply for a permit to change the current zoning.
Home-based businesses must apply for a home occupation permit. Certain limitations apply.
Signage for your business requires a sign permit.
If you plan to build a new building or to alter an existing building, apply for a building permit.
Please contact:
City of Little Rock
Zoning Registration & Complaint
723 W. Markham Street
(501) 371-4844
http://littlerock.org/citydepartments/planninganddevelopment/City of North Little Rock
Planning Department
120 Main Street
(501) 975-8835
http://northlr.org/departments/community-planning-permits.asp
To learn more about signage for your business:
http://www.sba.gov/starting/signage/
After verifying zoning compliance, the next step is to apply for a business license. The application fee for obtaining a business license will vary between $50 to over $1,000 depending on the type of business and amount and kind of inventory.
Some cities and counties do not issue business licenses.
Generally, business licenses are renewed annually.
Apply for a business license in the city in which the business is physically located. If located outside of the city limits, contact the county collector or clerk's office.
If the business has a physical location in other cities, inquire about a business license for these cities.
Businesses located outside the city limits may still need a business license to operate within the city limits.
Depending on the type of business, there may be additional licenses & fees.(Refer to page 5)
Please contact:
City of Little Rock
Collector's Office, Room 100
500 Markham Street (City Hall)
(501) 371-4566
http://littlerock.org/citydepartments/finance/divisions/treasury.aspxCity of North Little Rock
Business Licenses
120 Main Street
(501) 975-8895
http://www.northlr.org/city-services/
To learn more about "Starting a Business in Arkansas":
http://asbdc.ualr.edu/training/start.asp
Sole proprietors and general partnerships operating their business under a fictitious or assumed name must apply for a DBA certificate with the county in which the business is physically located. Contact the local county courthouse.
In Pulaski County, a DBA application fee is $25 and generally, a one-time occurrence.
A business name change, ownership change or business closure, will require filing an amendment at this office.
The county clerk's office will conduct a complimentary name search for the business.
Inquire about a DBA application if a business is incorporated, but operating under another business name.
A DBA does not protect or reserve a business name.
Please contact:
Pulaski County Clerk's Office
401 W Markham St, Suite 100
Little Rock, AR 72201-2659
(501)340-8500
http://pulaskiclerk.com/
Contact the AR Secretary of State's Office to incorporate or register a state trademark. A business is not required to incorporate. SOS employees will not give any legal advice regarding the pros and cons of incorporating.
There is a one-time, $50 filing fee to incorporate. Thereafter, a corporation will pay an annual franchise fee minimum of $150.
Incorporating a business offers individuals a safeguard in protecting personal assets from liability.
Incorporating ensures a business name will not be used by other incorporated businesses within the state. However, a trademark offers the best name protection.
The Secretary of State's Office can conduct a complimentary name or trademark search for the business. (See Internet address to perform a search.)
Please contact:
Secretary of State's Office
Business/Commercial Services Division
1401 W Capitol Ave, Suite 250
Little Rock, AR 72201
(501)682-3409
http://www.sos.ar.gov/
Be sure to research and discuss the specific advantages and disadvantages of each form of ownership with a qualified accountant or attorney before you finalize your decision.
If incorporating, contact the Arkansas Secretary of State's office. Incorporating can be done using the Secretary of State's on-line services, as well as by searching their database of incorporated businesses to see if the business name is available. (Use the URL address referenced in the " Incorporating Your Business" section.) If a business files and never does business as a corporation, the business is still responsible for annual franchise taxes. The fee to dissolve a corporation is $50 plus the current year's franchise taxes.
A business owner must assess the property of the business (building, equipment and furnishings, but not land). The deadline for assessing is May 31. Be sure to assess immediately if purchasing an existing business (to avoid liability, make sure there are no back taxes before buying a business). Taxes can be paid the 1st working day of March through October 10th without a penalty. There is a 10 percent penalty for missing the assessment deadline.
After having completed a worksheet listing the business property by category, the assessor will generate an invoice based on the business' amount, age, and type of equipment. Don't forget to itemize leased equipment, however the owner of the equipment is the one taxed.
Please contact:
Pulaski County Assessor's Office
201 S. Broadway, Suite 310
Little Rock, AR 72201
Phone: 501.340.6170
http://www.pulaskicountyassessor.net
Employer Identification Numbers, also known as Federal Employer Identification Numbers, are used to report withholding taxes and should be applied for 6-8 weeks prior to hiring. Apply for an EIN application (SS-4) if hiring employees, incorporating or operating a partnership, administering a Keogh plan, filing excise, alcohol, tobacco & firearms tax returns, or opening a bank account in the name of the business. A web site below is a link to downloading the SS-4 application.
The application can be faxed to the IRS, see below.
Some vendors or suppliers will ask for a business' EIN.
Requesting an EIN will not necessarily trigger an IRS audit or place scrutiny on the business.
Once issued an EIN, the IRS will forward a booklet and materials for remitting federal withholding taxes on a monthly or semi-weekly basis and submitting tax reporting on a quarterly basis.
Please contact:
Internal Revenue Service (IRS)
Tax Payer Education
Federal Building, 1st Floor
700 West Capitol
Little Rock, AR 72201
Phone: 501.324.5111 OR
Business Speciality Tax Line: 800.829.4933
Contact the U.S. Dept. of Labor if the business' sales are over $500,000 and there are greater than 4 employees. Ask questions about child labor laws, minimum wage, Occupational Safety & health Administration, the Americans with Disabilities Act and the Family Medical Leave Act.
To learn more about OSHA requirements & workplace safety:
To learn more about the ADA:
(800) 514-0301 to receive materials & publications.
Immigration
Employees must complete Form I-9, "Employment Eligibility Verification Form."
To learn more about immigration:
(800) 375-5283 "Ask Immigration"
Please contact:
U.S. Department of Labor
10421 West Markham
Little Rock, AR 72205
Phone: (501) 324-5436
FUTA works with state unemployment systems (see page 4). Currently, the tax rate is 6.2% and is applied to the first $7,000 in wages paid to each employee during the year. Employers may take a credit against the FUTA tax for amounts paid into state unemployment funds. If entitled to the maximum credit, the FUTA tax rate is .8%. Employers utilizing independent contractors do not pay FUTA tax on these individuals. FUTA tax deposits occur quarterly, using Form 940 or 940-EZ.
Please contact:
Arkansas Employment Security Department
Phone: (501)682-3268
State labor laws apply to those employing 4 or more people and gross sales under $500,000. If sales are over $500,000, the Federal labor laws apply. Phone the Department of Labor's Little Rock office with questions concerning minimum wage, overtime, and child labor laws. Also, use the web site listed below.
Please contact:
Arkansas Department of Labor
10421 West Markham, 1st Floor
Little Rock, AR 72205
Phone: (501) 682-4500
http://www.state.ar.us/labor
If the business has employees and has already received an Employer Identification Number, register with the state for a state withholding information packet. Use Form AR4ER, obtained from the office or web site below.
The EIN issued by the IRS will be the same number used by Arkansas for the purposes of state withholding.
Upon receipt of the request, the Department of Finance and Administration will forward materials to the business for remitting state income tax on a monthly basis, and submitting tax reports on a quarterly basis.
Please contact:
Department of Finance and Administration
Ledbetter Revenue Building
7th and Wolfe, Room 225,
P. O. Box 9941
Little Rock, AR 72201
Phone: (501) 682-2212
http://www.dfa.arkansas.gov
To apply for a permit, submit an application along with a $50 non-refundable fee to the location referenced below. For more information on sales and use tax, or to download the booklet "Starting a New Business in Arkansas"(included in this Guide), log onto the web sites listed below.
This department will issue a sales & use tax permit number. It is not the same number as the EIN.
All retail businesses, including e-retailers, and some service businesses should have a sales and use tax permit. Use Tax is paid on goods if purchased out of state and the seller does not collect sales tax.
Taxes are paid monthly. If the business collects $25 or less, taxes are reported quarterly or semiannually.
Check on the status of tax liability when buying an existing business. Sellers should provide buyers with a current statement from the Sales and Use Tax office.
Please contact:
Department of Finance and Administration
Revenue Department
7th & Wolfe Street
Little Rock, AR 72201
Phone: (501) 682-7104 (taxpayer assistance)
http://www.dfa.arkansas.gov/offices/exciseTax/salesanduse/Pages/default.aspx
http://www.dfa.arkansas.gov/offices/policyAndLegal/Documents/starting_a-new_business.pdf
There are more than 275 local taxes in Arkansas. Local municipalities (cities & counties) define their respective tax rates, so it's a good idea to become familiar with local taxing authorities. To learn more, log onto: http://www.dfa.arkansas.gov/offices/policyAndLegal/Documents/moving_2_arkansas.pdf
Depending on their location, restaurants and lodging facilities may be required to collect an additional sales tax (sometimes referred to as a "hamburger" tax) that is remitted to local advertising & promotion commissions.
Please contact:
Little Rock Advertising & Promotion Commission
426 Statehouse Plaza, #7,
Markham & Broadway Sts.
Little Rock, AR 72201
Phone: 501.370.3201
http://littlerock.org/CityCommissions/Detail.aspx?ID=3North Little Rock City Clerk's Office
300 Main Street
NLR, AR 72114
Phone: 501.340.5496
http://northlittlerock.ar.gov/business/business-in-nlr.asp
Call the Arkansas Department of Workforce Services to register the business' Employer Identification Number.
Arkansas unemployment insurance tax rates currently range from 0.8% to a maximum rate of 6.7%.
Please contact:
Arkansas Department of Workforce Services
#2 Capitol Mall
Little Rock, AR 72201
Phone: 501.682.3798
http://www.state.ar.us/esd
Applies to businesses with 3 or more employees, less depending on the type of business. Proprietors and partners do not count as employees; however, all members of corporations do count as employees. Contact a registered insurance agent.
Employers must post a sign in a conspicuous place informing employees how to handle a workplace injury.
Please contact:
Arkansas Worker's Compensation Commission
324 Spring Street
P. O. Box 950
Little Rock, AR 72203-0950
Phone: 501.682.3930
http://www.awcc.state.ar.us
To research the regulations that apply to specific occupations in Arkansas, refer to the Directory of Licensed Occupations, available at the ASBTDC Research Center. Search a database of Arkansas occupations using the web site listed below.
Please contact:
Arkansas Department of Workforce Services
Phone: 501.682.3798
http://www.acinet.org/acinet/lois_start.asp
Contact the state or the county sanitarian, an on-site inspector of restaurants and food preparation facilities. Anyone in food services, such as food processing, restaurants, caterers, mobile food units, convenience stores and bed and breakfasts must have their kitchen plans approved before establishing these businesses. These rules also apply to home-based businesses.
Please contact:
Division of Environmental Health Protection
Arkansas Department of Health
4815 West Markham
Little Rock, AR 72205
Phone: 501.661.2171 (state sanitarian)
http://www.healthyarkansas.com
The Alcoholic Beverages Control Division (ABC) conducts a 4-hour educational seminar twice monthly. Applicants are required to attend before a permit is issued. Plan to attend even if buying a business with an existing permit. Permit fees range from $40 to $1000, plus a federal occupational tax of approximately $250.
Please contact:
Arkansas Department of Finance and Administration
Alcoholic Beverage Control Division
1515 Building
1515 W 7th St, Ste 503
Little Rock, AR 72201
Phone: 501.682.1105
http://www.dfa.arkansas.gov/offices/abc/Pages/default.aspx
Call to apply for special permits to sell these types of goods or to operate amusement or vending machines.
Please contact:
Miscellaneous Tax Section
Ledbetter Revenue Building
7th & Wolfe
Little Rock, AR 72203
Phone: 501.682.7187
http://www.dfa.arkansas.gov/offices/exciseTax/MiscTax/Pages/default.aspx
Call to receive packet of regulations.
Please contact:
Arkansas Department of Human Services
Office of Long Term Care
P.O. Box 8059, Slot 408
Little Rock, AR 72203
Phone: 501.682.8468
http://www.state.ar.us/dhs
http://www.medicaid.state.ar.us
Call to receive packet of regulations.
Please contact:
Division of Child Care & Early Childhood Education
700 Main Street Slot S-140
Little Rock, AR 72201
Phone: 501.682.8590
http://www.state.ar.us/childcare/
