Arkansas businesses that fail to file zero sales tax returns can face several consequences:

1. Penalties and Fines: The Arkansas Department of Finance and Administration (DFA) may impose penalties for missing filing deadlines, even if no sales tax was collected.
2. Interest Charges: Interest may accrue on any owed taxes, exacerbating the financial burden.
3. Potential Audits: Recurrent failure to file zero returns can trigger audits, leading to further scrutiny of the business’s compliance practices.
4. Suspension of Sales Tax Permit: The DFA may suspend the business’s sales tax permit, halting its ability to collect sales tax until compliance is achieved.
5. Increased Scrutiny: Ongoing non-compliance can lead to more stringent enforcement actions, including liens or garnishments against the business.
6. Damage to Business Reputation: Consistent failure to comply with tax filing requirements can harm the business’s reputation and credibility with customers and tax authorities.

To avoid these consequences, businesses must file their sales tax returns regularly, even when no tax is collected, and maintain accurate records to support compliance efforts.