Arkansas Unfiled Sales Tax Returns Checklist
Understanding Unfiled Sales Tax Returns
An unfiled sales tax return occurs when a registered vendor fails to submit a required return to the Arkansas Department of Finance and Administration for a specific reporting period. This situation differs from a late payment because the state has received no filed return form at all, regardless of whether taxes were paid.
Sales tax returns document gross sales, taxable sales, tax collected, and exemptions, which the state uses to verify compliance and manage revenue. The absence of a filed return creates a gap in the state’s tax records and can trigger penalty assessments, collection notices, and enforcement actions that accumulate over time.
Missing returns suggest either a registration issue, a filing system problem, or ongoing noncompliance. State law requires all registered sales tax vendors to file a return for each reporting period, even when no taxable sales occurred.
Consequences of Unfiled Returns
Unresolved, unfiled returns lead to escalating enforcement actions by the Arkansas Department of Finance and Administration. Arkansas Code Section 26-18-1001 authorizes the state to close businesses that accumulate three delinquencies in reporting or remitting gross receipts tax or sales tax within any consecutive twenty-four-month period.
The state may issue additional notices and warnings, assess estimated tax liability based on prior returns or industry data, and apply statutory penalties for nonfiling. Penalties and interest accumulate at ten percent per annum until the tax liabilities are paid in full.
Enforcement may include liens against business assets, wage garnishment up to twenty-five percent of disposable earnings under federal law, or bank levies. Collection actions become more difficult to resolve the longer Arkansas unfiled sales tax returns remain unaddressed.
Initial Response Steps
Contact the Arkansas DFA Sales and Use Tax Section at 501-682-7104 to explain that you received a notice about unfiled returns. Ask which specific reporting periods show as unfiled in
state records and request clarification on whether returns were received and processed or remain genuinely missing.
Verify the deadline for filing the unfiled returns to avoid additional enforcement actions. Confirm any penalties or estimated assessments already applied to your account and verify that your sales tax permit remains active during the same conversation with state representatives.
Gathering Required Documentation
Locate all sales tax returns filed during the period in question and identify the specific months or quarters for which returns are missing. Gather supporting documents, including sales records, invoices, point-of-sale system data, and bank statements for the missing periods.
Note the dates of any notices received and confirm your current permit status with the state.
Verify whether your filing requirement is monthly or quarterly, as most registered vendors file on one of these two frequencies based on their gross receipts tax volume.
Filing the Missing Returns
Complete the following steps to file Arkansas unfiled sales tax returns
1. Obtain blank Form ET-1 sales tax return forms from the Arkansas Department of
Finance and Administration website or request them by phone.
2. Complete Form ET-1 for each missing period with accurate sales and tax information based on your supporting documentation.
3. Include a cover letter explaining the reason for the late filing if known.
4. Submit the completed Form ET-1 returns according to current filing instructions and retain copies for your records along with proof of mailing or filing confirmation.
Do not estimate amounts without verified data, and contact the state before filing if you remain uncertain about any figure when preparing your gross receipts tax report.
Addressing Tax Liabilities
Returns that show collected but unpaid sales tax require immediate payment submission. The
Department of Finance and Administration offers installment payment plans to qualifying taxpayers who cannot pay in full, with plans available for up to sixty months.
You must remain current on filing all returns to qualify for a payment arrangement. Contact the
Collections Office at 501-682-5000 to discuss payment options if you cannot satisfy the full tax liabilities immediately.
Penalty and Interest Structure
Arkansas imposes a failure-to-file penalty of five percent of the tax owed for each month or part of a month that a return remains late, up to a maximum of thirty-five percent. A failure-to-pay penalty of one percent per month applies to unpaid taxes when you file on time but do not pay on time, also capped at thirty-five percent.
The total combined failure-to-file penalty and failure-to-pay penalty cannot exceed thirty-five percent of the tax owed. Interest accrues at ten percent per annum from the original due date until full payment occurs, and this interest continues to accumulate regardless of penalty caps.
Post-Filing Follow-Up
Wait for state acknowledgment that the returns were received and processed after you submit them. Keep all correspondence in a secure location and verify that previously unfiled periods now show as filed if online account access is available through your sales tax permit account.
Contact the state again if no acknowledgment arrives within a reasonable time. Returns showing no taxes owed may resolve the matter, while returns showing unpaid liability will result in the state assessing tax due plus applicable penalties and interest.
Common Filing Errors to Avoid
Avoid these errors when addressing Arkansas unfiled sales tax returns
- Taxpayers who ignore notices from the state allow penalties and interest to accumulate,
which can trigger enforcement actions under state law.
- Filing incomplete or inaccurate returns creates new compliance issues that may result in
audit adjustments by the state.
- Taxpayers who miss response deadlines stated in notices may face additional penalties
or escalation to collections.
- Vendors who fail to file zero returns when no sales occurred during a period violate
Arkansas sales tax compliance requirements.
- Businesses that do not keep copies of filed returns make it difficult to verify receipt later if
disputes arise.
- Taxpayers who discard supporting documentation eliminate their ability to respond if the
state requests verification within the three-year statute of limitations for assessment.
Maintaining organized records prevents most compliance problems and simplifies resolution when issues arise.
Facing State Enforcement or Payroll Tax Issues?
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