ARKANSAS INCENTIVES 

Arkansas shows an average deal value of $3.17 million with 261 new jobs created per deal

ADVANTAGE ARKANSAS

Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project. The income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than fifty percent (50%) of a business' income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.

The payroll threshold for qualifying for Advantage Arkansas and the benefit received depends on the tier in which the business locates or expands. Arkansas's counties are ranked into four tiers based on poverty rate, population growth, per capita income and unemployment rate.

 

ARKPLUS

The ArkPlus program may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations. ArkPlus is a state income tax credit program that provides tax credits of 10% of the total investment in a new location or expansion project.

 

ArkPlus requires both a minimum investment and a minimum payroll of new, full-time, permanent employees hired as a result of the project, depending on the tier in which the business locates. Arkansas's counties are ranked into four tiers based on poverty rate, population growth, per capita income and unemployment rate.

Total project expenditures must be incurred within four (4) years of the date the project is approved by AEDC. New, full-time, permanent employees must be hired within 24 months of the date the financial agreement is signed.

The income tax credits may be used to offset 50% of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine (9) years beyond the tax year in which the credit was first earned.

SALES & USE TAX EXEMPTION ON REPAIR AND REPLACEMENT PARTS

The legislative session of 2017 included a bill that sunset the InvestArk sales and use tax credit.  With this sunset occurring on June 30, 2017, the exemption of sales/use tax on repair and replacement parts will follow the following schedule: 

  • July 1, 2018: 3.875%

  • July 1, 2019: 2.875%

  • July 1, 2020: 1.875%

  • July 1, 2021: 0.875%

  • July 1 ,2022: 0% (fully exempted)

EQUITY INVESTMENT TAX CREDIT

The Equity Investment Incentive Program is a discretionary incentive targeted toward new, technology-based businesses paying wages in excess of the state or county average wage.  If offered, this program allows an approved business to offer an income tax credit to investors purchasing an equity investment in the business.

The income tax credits issued under this program are equal to 33.3% of the amount invested by an investor in an eligible business. The income tax credit earned may be used to offset 50% of the investor's Arkansas income tax liability.  Any unused credit may be carried forward for a period of nine years.  The income tax credit earned may be sold upon approval by AEDC.

CREATE REBATE

The Create Rebate program may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations. Create Rebate provides annual cash payments based on a company's annual payroll for new, full-time, permanent employees. The benefit depends on the tier in which the company locates.

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In all tiers, a minimum payroll of new, full-time, permanent employees of $2 million annually is required. The minimum payroll threshold must be met within 24 months of the effective date of the financial incentive agreement.  No benefits may be claimed until the $2 million annual payroll threshold is met.

The Create Rebate benefits are available after the business certifies to the Arkansas Department of Finance and Administration that it has fulfilled the minimum payroll requirements and the reported payroll has been verified by the Arkansas Department of Finance and Administration.

OTHER ARKANSAS INCENTIVE PROGRAMS

  • Targeted Business Incentives
  • Research & Development Incentives
  • Tourism Development Incentives
  • Tax Back (Sales & Use Tax Refund)
  • Non-Profit Incentives
  • Digital Production/Film
  • Arkansas Digital Product and Motion Picture Industry Development Act
  • Child Care Facilities
  • Recycling Equipment
  • Bond Financing (Amendment 82)