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Arkansas' various incentives are nationally competitive, understandable, and easy to use. The Arkansas Department of Economic Development will focus on your business's specific needs, conduct a cost- benefit analysis and design a tailored incentive package. For more information contact Arkansas Department of Economic Development, 1-800-ARKANSAS, 1-800-Arkansas or (501) 682-1121, www.1800arkansas.comInvestment and Job Creation Incentives
Advantage Arkansas provides a credit on state income tax equal to between 1 percent and 4 percent of new payroll for five years, depending on the tier of the county in which the business locates. To qualify for Advantage Arkansas, the business's operations must fit one of the following descriptions continuously and throughout the project term:
For the business to qualify for the income tax credit, employees must be Arkansas taxpayers. The credit begins in the year in which the new employees are hired. Any unused portion of the credit may be applied against income tax for the succeeding nine years. www.1800arkansas.com/incentives/index.cfm?page=Advantage_Arkansas
Advantage Arkansas participants are also eligible for a refund of sales and use taxes for building materials and taxable equipment connected with the eligible project. Applicants for Tax Back must obtain an endorsement resolution from the local governing authority, must meet the same qualification criteria as Advantage Arkansas and must be approved by the Arkansas Department of Economic Development. www.1800arkansas.com/incentives/index.cfm?page=tax_back
InvestArk is a sales and use tax credit available to businesses established in Arkansas for two years or longer that invest $5 million or more in plant or equipment, new construction, expansion or modernization. The business must be approved for the program 30 days prior to beginning construction.
A credit against the business's state sales and use tax liability is authorized equal to 1/2 percent above the state sales and use tax rate in effect at the time a financial incentive agreement is signed. The sales and use tax credit is a percentage of eligible project cost. All projects will be audited upon completion to confirm the tax credits. The credit can be applied against the business's state sales and use tax liability. If the entire credit cannot be used in the year earned, the remainder may be carried forward for five years. Total project expenditures must be incurred within four years of the project plan approval.
Businesses eligible for this incentive include:
www.1800arkansas.com/incentives/index.cfm?page=InvestArk
(All Incentive Programs listed under this category are negotiated by the Arkansas Department of Economic Development in highly competitive situations)
Businesses hiring specified new, full-time, permanent employees within 24 months after completion of an approved expansion and/or new location project may be eligible for the Create Rebate Program. Under terms negotiated by the Arkansas Department of Economic Development, this program provides businesses a financial rebate from 3.9 to 5 percent of the annual payroll of the new, full-time, permanent employees. The financial incentive is 3.9 percent in Tier 1 counties, 4.25 percent in Tier 2 counties, 4.5 percent in Tier 3 counties and 5 percent in Tier 4 counties. In each tier of counties, a minimum payroll of new, full-time, permanent employees of $2 million annually is required. Incentives are available approximately 12 months after the business has fulfilled the minimum payroll requirements.
Eligible businesses include the following:
www.1800arkansas.com/incentives/index.cfm?page=Create_Rebate
The basic incentive provided by the ArkPlus program is a state income tax credit that provides tax credits of 10 percent of the total amount of the new investment. The amount of income tax credit taken during any tax year shall not exceed 50 percent of the annual Arkansas income tax liability resulting from the project.
To utilize the ArkPlus program, businesses must sign a financial agreement prior to construction outlining the terms of the incentives and including the following:
Eligible businesses include the following:
www.1800arkansas.com/incentives/index.cfm?page=arkplus
These discretionary incentives are for start-up companies in emerging sectors that are less than five years old, have an annual payroll between $200,000 and $1 million, and pay at least 150 percent to 180 percent of the county's current average hourly wage, depending upon the tier of the county in which the business locates.
Emerging technology sectors include:
Companies meeting these criteria are eligible for a transferable income tax credit equal to 10 percent of payroll for up to five years, a transferable income tax credit equal to 33 percent of eligible research and development costs, and sales and use tax refunds on building materials and necessary equipment. www.1800arkansas.com/incentives/index.cfm?page=targetted_businesses
Income tax credits for research and development were expanded during the 2003 session of the Arkansas General Assembly. The existing 33 percent income tax credit for taxpayers who pay for research performed at Arkansas universities remains. In addition, a 10 percent income tax credit, capped at $10,000 per year, was approved for eligible businesses performing in- house research. Targeted businesses may also earn transferable income tax credits equal to 33 percent of approved expenditures for in-house research. www.1800arkansas.com/incentives/index.cfm?page=Research_and_development
Child Care Facility Tax Incentive Arkansas offers a tax incentive for businesses that provide child care for their employees. A business may choose between two state income tax credit options: 1) a credit of 3.9 percent of the total annual payroll of the employees working in the child care facility, or 2) a one-time $5,000 income tax credit for the first year. The income tax credit may be carried forward for two years or until used entirely, whichever occurs first. In addition to either option, businesses may receive a refund on sales and use taxes on construction materials and furnishings purchased to equip an approved child care facility. To qualify for these incentives, the business must be approved to operate an early child care program. The business may choose to operate the facility or contract the operations. www.1800arkansas.com/incentives/index.cfm?page=Child_Care
Recycling Equipment Tax Credit Allows Arkansas taxpayers to receive an income tax credit for the purchase of equipment used exclusively for reduction, reuse, or recycling of solid waste material for commercial purposes, whether or not for profit and the cost of installation of such equipment by outside contractors. Such equipment must be used in the collection, separation, processing, modification, conversion, treatment or manufacturing of products containing at least 50 percent recovered materials of which at least 10 percent is post-consumer waste. The amount of the tax credit shall equal 30 percent of the cost of eligible* equipment and installation costs. Credits may be carried over a maximum of three consecutive years following the taxable year in which the credits accrued. Taxpayers receiving credit under this Act for the purchase of machinery and equipment shall not be entitled to any other state or local tax credit or deduction based on the purchase of the machinery or equipment, except normal depreciation. Note: Eligibility is determined by the Arkansas Department of Environmental Quality. www.1800arkansas.com/incentives/index.cfm?page=Recycling_Equipment
Qualifying motion picture production businesses spending more than $500,000 within six months, or $1 million within 12 months, in conjunction with the filming or producing of one feature film, telefilm, music video, documentary, episodic television show or commercial advertisement may receive a refund of state sales and use taxes paid on qualified expenditures incurred in conjunction with the project. www.1800arkansas.com/incentives/index.cfm?page=Motion_Picture
The Arkansas Tourism Development Act provides state sales tax credits and corporate income tax credits to businesses initiating approved tourism attraction projects. Sales tax credits shall be determined in accordance with the following criteria:
Additionally, eligible businesses may receive a credit on corporate income tax equal to the average hourly wage of each new worker times 100, with a $3,000 cap per employee. The multiplier increases from 100 to 400 with a $6,000 cap per employee in a "high-unemployment" county. Employees must be Arkansas taxpayers. Both tax credits begin in the year in which the new employees are hired. Any unused portion of the credit may be applied against corporate income tax for the succeeding nine years. www.1800arkansas.com/incentives/index.cfm?page=Tourism_Development
Tuition Reimbursement Tax Credit Arkansas provides a 30 percent income tax credit to eligible companies for reimbursements they make to employees for approved educational expenses. The employees must attend an accredited Arkansas post-secondary educational institution. www.1800arkansas.com/incentives/index.cfm
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