Incentives
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 Advantage Arkansas income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than 50 percent 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.
ArkPlus (Income Tax Credit)
A state income tax credit program that provides tax credits of 10% of the total investment in a new location or expansion project. This discretionary incentive is offered in highly competitive situations. 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. Total project expenditures must be incurred within four (4) years of the date the project is approved by AEDC.
Business and Industry Training Program (BITP)
The Business and Industry Training Program (BITP) is a flexible program designed for new and expanding businesses and industries. BITP helps these companies with recruiting workers, pre-employment training, on-the-job training, and train-the-trainer. The program also provides training assistance for existing businesses with new technology needs.
ArkPlus (Income Tax Credit)
A state income tax credit program that provides tax credits of 10% of the total investment in a new location or expansion project. This discretionary incentive is offered in highly competitive situations. 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. Total project expenditures must be incurred within four (4) years of the date the project is approved by AEDC.
Business and Industry Training Program (BITP)
The Business and Industry Training Program (BITP) is a flexible program designed for new and expanding businesses and industries. BITP helps these companies with recruiting workers, pre-employment training, on-the-job training, and train-the-trainer. The program also provides training assistance for existing businesses with new technology needs.
Company Childcare Facilities
Arkansas offers tax incentives for businesses that provide childcare for their employees. A business may choose between two state income tax credit options: 1) a credit of 3.9% of the total annual payroll of the employees working in the childcare facility, or 2) a one-time $5,000 state income tax credit for the first year that the business provides its employees with a childcare facility. Any unused credit may be carried forward in two years.
Create Rebate (Cash Rebate)
Incentives are negotiated and offered at the discretion of the Executive Director of the Arkansas Economic Development Commission. Create Rebate provides annual cash payments based on a company’s annual payroll for new, full-time, permanent employees. In order to qualify, the company must create a minimum of $2 million annually in new payroll. The minimum payroll 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.
Recycling Equipment
Arkansas allows 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. The amount of the tax credit shall equal 30% of the cost of equipment and installation costs deemed eligible by the Arkansas Department of Environmental Quality. Credits may be carried forward for three consecutive years following the taxable year in which the credits accrued.
Research and Development Incentives
Recycling Equipment
Arkansas allows 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. The amount of the tax credit shall equal 30% of the cost of equipment and installation costs deemed eligible by the Arkansas Department of Environmental Quality. Credits may be carried forward for three consecutive years following the taxable year in which the credits accrued.
Research and Development Incentives
For qualifying businesses that invest in:
1) in-house research in an area of strategic value; or
2) a research and development project offered by the Arkansas Science and Technology Authority.
Research in an area of strategic value means research in fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan approved from time to time by the Board of Directors of the Arkansas Science and Technology Authority. The income tax credit is equal to 33% of qualified research expenditures. The maximum tax credit that may be claimed by a taxpayer under this program is $50,000 per tax year.
Targeted Business Incentives
At the discretion of the AEDC Executive Director, targeted businesses may be offered special incentives designed to help new, knowledge-based, start-up businesses, including a refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project, a transferable income tax credit equal to 10% of payroll for up to five years, and a transferable income tax credit equal to 33% of eligible research and development expenditures.
Tax Back
Provides sales and use tax refunds on the purchase of building materials and taxable machinery and equipment to qualified businesses investing at least $100,000 and who either a) sign a job creation agreement under the Advantage Arkansas or Create Rebate programs within 24 months of signing the Tax Back agreement or b) have met the requirements of an Advantage Arkansas or Create Rebate agreement within the previous 48 months. The state tax rate is 6.5% so the eligible refund would be 5.5%.
Tuition Reimbursement
1) in-house research in an area of strategic value; or
2) a research and development project offered by the Arkansas Science and Technology Authority.
Research in an area of strategic value means research in fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan approved from time to time by the Board of Directors of the Arkansas Science and Technology Authority. The income tax credit is equal to 33% of qualified research expenditures. The maximum tax credit that may be claimed by a taxpayer under this program is $50,000 per tax year.
Targeted Business Incentives
At the discretion of the AEDC Executive Director, targeted businesses may be offered special incentives designed to help new, knowledge-based, start-up businesses, including a refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project, a transferable income tax credit equal to 10% of payroll for up to five years, and a transferable income tax credit equal to 33% of eligible research and development expenditures.
Tax Back
Provides sales and use tax refunds on the purchase of building materials and taxable machinery and equipment to qualified businesses investing at least $100,000 and who either a) sign a job creation agreement under the Advantage Arkansas or Create Rebate programs within 24 months of signing the Tax Back agreement or b) have met the requirements of an Advantage Arkansas or Create Rebate agreement within the previous 48 months. The state tax rate is 6.5% so the eligible refund would be 5.5%.
Tuition Reimbursement
Arkansas provides a 30% state income tax credit to eligible companies for reimbursements they make on behalf of employees for approved educational expenses. The employees must successfully complete the course at an accredited Arkansas post-secondary educational institution. The credit authorized by this program cannot offset more than 25% of the company’s state income tax liability in any tax year.