Arkansas Sales Tax License Revocation / Business
Shutdown Checklist
A sales tax permit revocation in Arkansas is a formal action taken by the Arkansas Department of Finance and Administration when a business fails to comply with sales tax filing or payment requirements. This revocation means the state has officially cancelled your authority to collect and remit sales tax, and your business is no longer legally permitted to operate as a sales tax collector in Arkansas.
Operating without a valid permit exposes your business to penalties, enforcement actions, and potential civil or criminal liability. Ignoring a revocation notice or continuing to collect sales tax after revocation can lead to additional penalties, interest charges, and escalated enforcement.
What This Issue Means
A sales tax permit revocation is the formal cancellation of your authority to operate as a registered sales tax collector in Arkansas. When this occurs, you no longer have state permission to collect sales tax from customers or file sales tax returns.
Why the State Issued This or Requires This
The Arkansas Department of Finance and Administration revokes a sales tax permit for specific compliance failures under Arkansas Code Title 26. Common triggers include failing to file required sales tax returns for multiple periods, failing to remit collected sales tax to the state, or repeatedly missing filing or payment deadlines.
Arkansas Code section 26-18-601 authorizes the Secretary of the Department of Finance and
Administration to cancel or refuse to reinstate a permit when a taxpayer has failed to comply with state tax law concerning timely reporting and payment of state tax within the last three years. Revocations protect tax revenue and enforce compliance with Arkansas sales and use tax permits requirements.
What Happens If This Is Ignored
Continuing to operate or collect sales tax after revocation can result in additional penalties and enforcement action. The state may pursue collection efforts for unpaid sales tax, penalties, and
interest through various methods, and operating without a valid permit may expose the business and its owners to further legal or enforcement consequences.
What This Does NOT Mean
A sales tax permit revocation does not mean your business is automatically closed or that you have lost all business licenses. Revocation does not automatically result in criminal charges, though continued operation without compliance could lead to civil penalties.
Checklist: What to Do After Receiving a Permit
Revocation Notice
Follow these steps to address the revocation and understand your options
1. Read the entire revocation notice carefully and identify the specific reason for revocation, any deadline mentioned, and the department contact information provided.
2. Locate and gather all sales tax documentation, including sales tax returns, payment records, correspondence from the state, and records of sales tax collected from customers during the period in question.
3. Calculate any unpaid sales tax owed by reviewing your sales records and any returns filed to determine whether sales tax was collected but not remitted to the state.
4. Contact the Arkansas Department of Finance and Administration at (501) 682-7104 to ask specific questions about the revocation and what steps are available next.
5. Ask whether the permit can be reinstated and inquire about the conditions, process, and timeline for reinstating your sales tax permit if you address the compliance issues.
6. Request a copy of all outstanding compliance issues and ask the department to provide a clear summary of unfiled returns, unpaid tax, penalties, and interest owed.
7. Determine whether you owe back delinquent state tax by working with the department to establish the total amount of sales tax, penalties, and interest due, if any.
8. Ask about payment options or plans and inquire whether the department offers installment agreements or other arrangements for settling outstanding sales tax debt.
9. Document all communications with the state by keeping records of phone calls, emails, letters, and in-person meetings with the department, including names, dates, and details discussed.
10. Determine your business’s operational status and clarify with the department whether you can continue operating without collecting sales tax or whether the revocation affects other aspects of your business license.
11. Consult relevant records for any unfiled returns by reviewing your business accounting or banking records to identify periods when sales tax returns should have been filed but were not.
12. Prepare to provide documentation if requested by gathering bank statements, sales records, and accounting documents that the department may request to verify sales and sales tax calculations.
13. Follow up in writing if needed by sending a follow-up email or letter summarizing what was discussed to create a documented record if you receive verbal information from the department.
What Happens After This Is Completed
After completing these steps, the Arkansas Department of Finance and Administration will review your compliance status and determine the next steps. Under Arkansas Code section
26-18-601, the DFA must follow statutory procedures for permit cancellation or reinstatement.
Following a hearing, the DFA or Arkansas Tax Appeals Commission must issue a written decision within twenty days explaining whether reinstatement is granted and what conditions apply. Outstanding sales tax debt may require payment or a payment agreement before the state considers reinstatement.
Common Mistakes to Avoid
Missing deadlines in follow-up notices can result in further enforcement if the department sets a deadline for payment, paperwork, or other actions. Providing incomplete or inaccurate
information delays resolution and raises additional compliance concerns if the state requests documentation or information.
Ignoring communication from the state typically escalates enforcement action because notices or requests from the department require a response. Continuing to collect sales tax after revocation exposes your business to additional penalties and enforcement.
Not documenting communications with the department leaves you unprotected if disputes arise about what was discussed or agreed to. Assuming the revocation will resolve on its own is a mistake because a revocation notice requires active steps to address the underlying compliance issues.
Frequently Asked Questions
Can I still operate my business if my sales tax permit is revoked?
The revocation affects only your authority to collect and remit sales tax. Operating the business itself may be possible, but you cannot legally collect sales tax from customers.
How long does it take to get a permit reinstated?
Arkansas law does not specify a standard processing time for reinstatement, but Arkansas
Code section 26-18-601 requires that decisions on permit reinstatement must be issued within twenty days after the conclusion of the hearing. The actual reinstatement timeline depends on compliance with all requirements set by the DFA.
Will reinstating my permit require me to pay all back sales tax immediately?
This depends on the amount owed and the department’s policies. Some businesses may qualify for payment plans, so ask the department about payment options when discussing reinstatement.
What if I disagree with the revocation?
Taxpayers have a statutory right to appeal permit revocations to the Arkansas Tax Appeals
Commission. Under Arkansas Code section 26-18-601, you have twenty days from receipt of the DFA’s decision to request a hearing, and appeals of permit cancellation or revocation are expedited cases under the Independent Tax Appeals Commission Act.
Can a revocation affect my personal credit or legal liability?
A revocation is a business tax action. Whether it affects personal credit or creates personal liability depends on your business structure and the specific circumstances.
Contact Information
Arkansas Department of Finance and Administration
Phone: (501) 682-7104
Website: dfa.arkansas.gov
Mailing Address: P.O. Box 3566, Little Rock, AR 72203
Physical Address: Ledbetter Building, 1816 W 7th St, Rm 1330, Little Rock, AR 72201
For sales tax-specific inquiries, ask to be directed to the Sales Tax Section.
Facing State Enforcement or Payroll Tax Issues?
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