(a) Estimated tax penalty — Arkansas Code § 26-18-208(6)(A).

1. (1)

   1. (A) Payments made with an extension of time to file corporation income tax returns do not constitute estimated tax payments.
   2. (B) Estimated tax payments must be made by the required due dates.

2. (2)

   1. (A) Underestimate penalty is calculated by:

(i) Multiplying the underpayment for each quarter by .00027397; and

1. (ii) Then multiplying that figure by the number of days underpaid.

   1. (B) There can be several calculations for each quarter when partial payments are received. Example 1: Corporation A, FEIN 99-9999991, is a calendar-year filer. The tax liability for tax year 12/94 was forty thousand dollars ($40,000) and for tax year 12/95, the tax liability was twenty thousand dollars ($20,000). Corporation A has a two-thousand-dollar estimated credit carryforward from tax year 12/94. Corporation A filed an extension payment of three thousand dollars ($3,000) on May 15, 1996. The 12/95 income tax return was filed September 15, 1996. Corporation A paid estimated tax payments for tax year 12/95 as follows: PAYMENT DATE VOUCHER NO. AMOUNT 05/15/95 1 $3,000 01/15/96 4 10,000 The required estimated tax due per quarter is four thousand five hundred dollars ($4,500) ($20,000 X 90% ÷ 4). Five hundred dollars ($500) of the first quarter overpayment ($3,000 + $2,000 - $4,500) is applied to the second quarter estimate. The ten-thousand-dollar fourth quarter payment will be applied to the second, third, and fourth quarter required estimates as follows: (1) Four thousand dollars ($4,000) to the second quarter, (2) four thousand five hundred dollars ($4,500) to the third quarter, and (3) one thousand five hundred dollars ($1,500) to the fourth quarter. The amount subject to underestimate penalty and the penalty calculations are as follows: Quarter Quarterly Payment Underpay Underpaid U/P amt X Due Date Date Amount Days U/P days X .00027397 2nd 6/15/95 1/15/96 $ 4,000 214 $235 3rd 9/15/95 1/15/96 4,500 122 150 4th 1/15/96 *5/15/96 3,000 121 99 Total UEP $484 *5-15-96 is the original income tax return due date. Example 2: Corporation B, FEIN 99-9999992, is a fiscal-year filer. The tax liability for tax year 3/94 was fifteen thousand ten dollars ($15,010) and for tax year 3/95, the tax liability was sixteen thousand six hundred forty-four dollars ($16,644). Corporation B filed an extension payment of seven thousand nine hundred forty dollars ($7,940) on August 15, 1995. The income tax return was filed on December 15, 1995. Corporation B paid estimated tax payments for tax year 3/95 as follows: PAYMENT DATE VOUCHER NO. AMOUNT 08/15/94 1 $3,000 12/15/94 4 $10,000 The required estimated tax due per quarter is three thousand seven hundred forty-five dollars ($3,745) ($16,644 X 90% ÷ 4). The ten- thousand-dollar fourth quarter overpayment will be applied to the first, second, and third quarters as follows: (1) Seven hundred forty- five dollars ($745) to the first quarter, (2) three thousand seven hundred forty-five dollars ($3,745) to the second quarter, (3) three thousand seven hundred forty-five dollars ($3,745) to the third quarter, and (4) one thousand seven hundred sixty-five dollars ($1,765) to the fourth quarter. The amount subject to underestimate penalty and the penalty calculations are as follows: Quarter Quarterly Payment Underpay Underpaid U/P amt X Due Date Date Amount Days U/P days X .00027397 1st 8/15/94 12/15/94 $ 745 122 $25 2nd 9/15/94 12/15/94 3,745 91 93 4th 4/15/95 *8/15/95 1,765 122 59 Total UEP $177 *8-15-95 is the original income tax return due date.

(b) Estimated tax penalty — Exceptions — Arkansas Code § 26-18-208(6)(B)(iii).

1. (1) The estimated tax penalty will not be imposed if estimated tax payments equal or exceed the amount of tax liability shown on the taxpayer's return for the preceding tax year.
2. (2) The taxpayer's preceding tax year must have been for a period of twelve (12) months.
3. (3) "Tax liability shown on the taxpayer's return" means total tax, as reported, less business and incentive credits.