Advantage Arkansas (Income Tax Credit): This program provides corporate income tax credits to businesses that create new full-time jobs. An annual credit of up to 4% of new employee payroll may be claimed for 5 years. The percentage of the available credit (1% to 4%) and average hourly wage needed to qualify for the incentive is based on the tier level of the county where the project is located. In any year, tax credits claimed under this program cannot exceed 50% of a company’s tax liability. Unused credits may be carried forward for 9 years.
ArkPlus (Income Tax Credit): State corporate income tax credits equal to 10% of the eligible investment in a business attraction or expansion project may be awarded to companies that meet certain investment and employee payroll requirements. The minimum investment and employee payroll thresholds will depend on the tier level of the county where the project is located. In any year, tax credits claimed under this discretionary program cannot exceed 50% of a company’s tax liability. Unused credits may be carried forward for 9 years.
Research and Development Tax Credits (Various Programs): Arkansas offers an income tax credit equal to 33% of research expenditures, to eligible businesses that perform research at Arkansas universities or meet the requirement of a “targeted business”. Companies that do not meet the qualifications of a “targeted business” may receive an income tax credit equal to 20% of qualified research expenditures.
Create Rebate (Cash Rebate): Under this discretionary program, businesses that create new full-time jobs with a minimum annual payroll of $2,000,000 may qualify for annual cash payments for up to 10 years. The minimum payroll must be met within 24 months of the effective date of the incentive agreement. The percentage of the benefit (3.9% to 5.0% of annual payroll) is based on the tier level of the county where the project is located.
Tax Back (Sales and Use Tax Refund): Businesses that create new jobs and make a minimum capital investment of $100,000 may receive a refund on sales and use tax associated with the purchase of building materials and machinery and equipment. The business must meet the eligibility requirements of either Advantage Arkansas or Cash Rebate program in which they participate.
Machinery and equipment used directly in manufacturing is exempt from sales and use tax.
Last updated: June 2018