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Arkansas Enterprise Zone Program

To stimulate economic growth, Arkansas offers enterprise zone tax incentives to qualified companies that locate within the state. The program offers three incentives:

A state income tax credit for each net new job (based on average annual employment of current tax year to previous tax year) created based on the average wage of new workers multiplied by 100. In areas with unemployment of 10 percent or more, or three percent above the state's average unemployment rate for the preceding year, the above formula used is 200 times the average hourly wage, with a $2,000 cap per employee in both cases;
A refund of sales and use taxes on the purchase of materials used in construction of a new facility or expansion of an existing facility; and
A refund of sales and use taxes on machinery and equipment to be used in connection with the business.

To qualify for the Arkansas Enterprise Zone Program, a company must:

Fit one of the following descriptions:
- a manufacturer in SIC codes 20 through 39 hiring at least one new employee;
- a computer firm in SIC codes 7375 or 7376 hiring at least one new employee;
- a corporate headquarters, with no retail sales to the public, hiring 50 or more new permanent employees;
- a distribution center, with no retail sales to the public, hiring 25 or more permanent employees;
- a trucking/distribution terminal (SIC 4231), with no retail sales to the public, hiring 100 or more new permanent employees; or
- an office sector business, with no retail sales to the public, hiring 100 or more new permanent employees; and
Prove that new employees are Arkansas residents during the year in which the credits are earned.

To be eligible to receive the tax credits and refunds, the company must file an application and receive the endorsement of the city or county government involved. The Arkansas Department of Economic Development must approve the company's application. If approved, the Department of Finance and Administration monitors and administers the program.

The income tax credit shall be used for the year in which the net new employee is hired. If the entire credit cannot be used in the year earned, the remainder may be carried forward for four years, or until the credit is used entirely, whichever occurs first.

If you have questions concerning the Arkansas Enterprise Zone Program, please call the Arkansas Department of Economic Development at (501) 682-7310.

Additional Information

Enterprise Zone Program Of 1993: A Step-By-Step Guide
Arkansas Enterprise Zone Application

Arkansas Department of Economic Development: One State Capitol Mall
Little Rock, Arkansas USA 72201
Phone: (501) 682-1121
Fax: (501) 682-7341