Biggins Lacy Shapiro & Company, LLC

Arkansas Economic Development Incentive Programs

TAX CREDITS

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.

Technology-based companies investing at least $250,000 and that pay at least 175% of the lesser of state or county’s average wage, may be eligible for an income tax credit or sales tax credit equal to 2-8% of capital investment. Subject to the average hourly wage paid by the company, the credits earned may be used to offset 50%, 75%, or 100% of the tax liability. Any unused credits may be carried forward for nine (9) years.

Research and Development Tax Credits (Various Programs):

  • In-House Research in Area of Strategic Value Income Tax Credit: Business that conduct in house research that are either in the area of strategic value or in area offered by one of the programs by Arkansas Science and Technology Authority; may be eligible for an income tax credit equal to 33% of qualified R&D expenditures up to $50,000. The tax credit may be claimed for qualified expenses incurred in the first five years of the agreement. Unused tax credits may be carried forward for 9 years.
  • In-House Research by Targeted Business Income Tax Credit: Businesses that quality as a targeted industry may be eligible for an income tax credit equal to 33% of qualified in-house R&D expenditures that were incurred in the first five years of the agreement. Tax credits may be sold one time; any unused credits can be carried forward for 9 years.
  • In-House Research Income Tax Credit: Business conducting in-house research that also qualifies for federal R&D tax credits may qualify for an income tax credit equal to twenty-percent (20%) of eligible R&D expenses. The income tax credit may be used to offset one hundred percent (100%) of an eligible business's annual income tax liability. Unused credits may be carried forward for 9 years.
TAX REFUNDS

Tax Back (Sales and Use Tax Refund):  Businesses that create new jobs and make a minimum capital investment of $100,000 and payroll equal to at least $50,000 depending on which Tier the project is located, 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 Create Rebate program in which they participate.

GRANTS/LOANS

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.

Qualified technology based companies with a minimum annual payroll of $250,000 paying at least 175% of the lesser of state or county’s average wage may be eligible for rebate equal to 5% of annual payroll for new employees. 

Governor’s Quick Action Closing Fund: The Governor’s Quick Action Closing Fund is an incentive the State of Arkansas reserves for projects that bring quality jobs to communities. AEDC would use discretion in offering assistance for project expenses pertaining to locating a company.  Terms and conditions, including clawbacks and eligible expenses, would be provided on a separate agreement document if a company makes the decision to locate in Arkansas.

TAX EXEMPTIONS

Machinery and equipment used directly in manufacturing is exempt from sales and use tax.

Last updated: May 2019



 
Biggins Lacy Shapiro & Company, LLC
609-924-9775
info@blsstrategies.com