How to Start a Nonprofit in Arkansas

Arkansas has 13,686 active 501(c)(3) organizations, 1,032 of them approved in the last twelve months, up from 912 the year before, a 13.2% rise. 79.5% report no revenue on file or under $50,000. Arkansas is cheap to run a nonprofit in: $45 to incorporate and no yearly state filing fees. The catches are paperwork, not money: three directors, a separate state tax exemption, and almost no sales tax relief.

The federal half of this is identical in every state and is set out on the state hub: incorporate, adopt bylaws, get an EIN, apply to the IRS on Form 1023 or 1023-EZ. This page covers what Arkansas adds, what each step costs, and the two or three things that catch people out here specifically.

What it costs in Arkansas

The state filings come to $45 in cash. That is the online fee; paper filing is $50. The annual report and charity registration are both free, so after incorporating there is no yearly state filing fee. On top of that sits the IRS user fee, which is set each year by revenue procedure and shown on Pay.gov when you file, so no figure for it is printed here. Every amount above was read from the issuing agency’s own fee schedule or form, and each one is linked in the sources at the foot of this page. Fees change: check before you budget.

The order to do it in

Sequence matters more than speed. The IRS application asks for documents the state has to create first, and the state charity regulator wants the organization to exist before it registers.

• Decide whether you need a corporation at all. Fiscal sponsorship gives a project the same tax treatment with no incorporation, no IRS application and no annual return. For a project under a few thousand dollars a year it is usually the better answer.
• File the formation document with the Arkansas Secretary of State, with the IRS purpose and dissolution language in it. Our articles template carries both.
• Adopt bylaws and appoint the board before the IRS application, which asks about governance. The bylaws template and the board guide cover what that means in practice.
• Get an EIN. Free, online, immediate, and needed for the bank account. Do not pay anyone for it: the EIN guide explains why people do.
• Apply to the IRS on Form 1023-EZ if you qualify, which most new organizations do, or the long Form 1023 if you project gross receipts over $50,000 or hold assets over $250,000.
• Handle the state exemptions and registrations in the section below, once the determination letter arrives.

What catches people out in Arkansas

You need three directors. The Secretary of State’s annual report form asks for the names of the board of directors, “minimum of 3 persons”. Plan for three from the start; the annual report is where a two-person board shows up.

State income tax exemption is a separate step. The IRS letter does not register you with Arkansas. The Department of Finance and Administration says organizations are eligible for Arkansas income tax exempt status “upon submitting proper documentation and application”: a copy of the IRS ruling letter, the first two pages of your Form 1023, and a statement of the Arkansas Code exemption, or Form AR1023CT if you have no IRS letter.

Sales tax relief is narrow. DFA states that exemption from income tax does not apply to sales tax. Exemptions are listed by type of organization or purchase, and the newest, under Act 1007 of 2025, covers only 501(c)(3) organizations with operating budgets under $200,000 that serve Arkansas residents in need, and excludes vehicles, computers, phones and building materials among other items. Nonprofits can apply for refunds of additional local taxes on invoices over $2,500.

The charity report date has moved. Act 137 of 2019 moved the annual charity financial report to 180 days after your fiscal year end, and the Secretary of State’s web page and current form say so. Its 2025 instructions document still says 1 August, which is the date of the separate corporate annual report. Follow the 180 days for the charity report.

Raffles wait five years. DFA licenses bingo and raffles only for organizations that have been in continuous existence in Arkansas for five years. Permits run from $10 for a temporary raffle with donated prizes under $5,000 to $100 for an annual permit, workers must be unpaid volunteers, and a cash prize cannot exceed $5,000.

What Arkansas’s nonprofit sector looks like

From the IRS Business Master File, which lists every organization whose exemption has not been revoked.

The size column is the one worth sitting with before you file. 79.5% of Arkansas’s charities have no revenue figure on file or report under $50,000, against 77.5% nationally. The typical outcome of starting a nonprofit here is a very small organization, which is not an argument against doing it, but it is an argument for choosing the cheap route first and for being honest in the projections on the IRS form. What the whole thing costs, federal and state together, is set out in what it costs to start a nonprofit.

A realistic timeline

Written as weeks rather than as a list, because the waiting is the part people plan badly. Nothing here assumes you pay anyone to do it for you.

1. Week one. Agree the purpose and the name, recruit at least three directors, and choose a registered agent with a physical Arkansas address.
2. Week one. File the Articles of Incorporation online for $45, using the 501(c)(3) version, and say whether the corporation will have members.
3. Same week. Apply for the EIN online. Free and immediate.
4. Month one. Adopt bylaws, hold the first board meeting and open the bank account.
5. Month one or two. File Form 1023-EZ if you qualify, or the long Form 1023.
6. Before you solicit. Register with the Secretary of State on Form CR-01, free, or apply for the volunteer exemption on Form EX-01.
7. When the IRS letter arrives. Send it to the Department of Finance and Administration for state income tax exemption.
8. Every year. File the free annual report by 1 August, and the charity financial report within 180 days of your year end.

The long pole is the IRS, not Arkansas. The state end of this is measured in days and costs $45. Everything after the determination letter is either free or a form with a copy of that letter stapled to it.

What kind of charities Arkansas has

The Business Master File classifies each organization by activity. The six commonest categories in Arkansas account for 6,722 organizations between them:

• Religion related: 1,786 organizations
• Education: 1,445 organizations
• Human services: 1,296 organizations
• Recreation and sports: 813 organizations
• Arts, culture and humanities: 795 organizations
• Philanthropy and grantmaking: 587 organizations

That mix is worth checking against what you are planning. The largest category in every state is religion related, which is a reporting artifact as much as a fact, since churches are exempt automatically and many register anyway. The categories underneath it are the real map of what gets funded locally, and an organization entering a crowded category needs a sharper answer to the question of why it should exist separately than one entering a thin one.

Approvals in Arkansas are rising

The file carries a determination date for every organization, so the last two years can be compared directly. Arkansas had 1,032 approvals in the last twelve months against 912 in the twelve before that, a change of +13.2%. Nationally the last twelve months produced 115,927.

Read that as competitive context rather than as a verdict. More approvals means more organizations chasing the same local funders, and it also means the process is working normally for people like you. What it does not tell you is how many of them are still operating in three years, which the file cannot say, because it keeps listing an organization until its exemption is actually revoked.

After approval

The annual obligations start immediately and they run on two calendars. Federally, a return is due every year from the first full tax year, and three consecutive misses means automatic revocation with no appeal: which return applies is covered in which Form 990 you file. In Arkansas, the filings in the table above renew on their own cycle. If the organization eventually sells anything or lets space, selling products and renting out space cover the tax treatment, and if it does not work out, closing properly is its own process.

Method and sources

Every fee and form on this page was read from the issuing agency’s own page or form on 10 November 2026, listed in the sources below. Nothing here is copied from another guide. The IRS user fee is not stated because the form instructions point to a revenue procedure and to Pay.gov rather than printing an amount.

The counts are from the IRS Exempt Organizations Business Master File, filtered to subsection 03, with determinations through October 2026. Three limits carry over from that file: it includes organizations that are dormant but not yet auto revoked, the ruling date is when the IRS decided rather than when anyone applied, and revenue is blank for most small organizations, which is why the size row reads “no revenue on file or under $50,000” rather than giving a median. State is the organization’s own mailing address. This page is general information and not legal advice.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.