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Living and working in "The Natural State" is an excellent incentive itself. We also have one of the lowest overall per capita tax burdens of any state in the nation.
There are several special industrial location incentives offered by the State of Arkansas. Two of the major programs are:
Additional location incentive programs include:
The Arkansas Quality Management Task Force will assist your company in understanding the potential for increasing profits and productivity through Quality Management. Services include bimonthly seminars, the Quality Management Newsletter, support for community "Quality First" initiatives, and a resource center. Membership in the Task Force is open to any company desiring to join.
The Matchmaker Program is a "reverse trade show" designed to introduce manufacturers to potential Arkansas suppliers to provide a potential savings in such things as transportation costs, delivery time, etc.
Cross-Match is a database provided by the Arkansas Department of Economic Development to assist manufacturers in finding sources of raw material and products from Arkansas manufacturers. Cross-Match can also be used to identify manufacturers of specific products as well as manufacturing prospects.
The Industrial Energy Conservation Program assists manufacturers in identifying ways to reduce energy costs. Free energy audits are performed by independent engineers who study several areas, including whether the company can receive a more beneficial utility rate and what cost-effective energy conservation investments are available.
The Industrial Waste Minimization Program provides free walk-through audits and technical assistance on waste minimization and pollution prevention. The adoption of pollution prevention techniques instead of conventional pollution control, and waste exchange and recycling are prominent features of the program.
The Arkansas Day Care Facility Tax Incentive Program allows any business or entity that obtains certification from the Arkansas Department of Economic Development to claim a sales and use tax exemption for the initial cost of construction materials and furnishings purchased to build and equip child care centers. When approved, the Arkansas Department of Economic Development will furnish verification of eligibility to the applicant for use in filing for tax benefits.
The day care center must be constructed, equipped, and operated by the business. Eighty percent of the children placed in the center must be children of the employees of the business. Also, the center must provide an appropriate early childhood program.
Businesses will be allowed an income tax credit of 3.9 percent of the annual salary of employees employed exclusively in providing child care services. If two or more businesses participate, each business is allowed an income tax credit of 3.9 percent of the annual salary of only those employees who are on the respective business' payroll and are employed exclusively for providing child care services. Any income tax credit will be carried forward two years if now utilized the first year. Remaining credits will expire.
This act also requires that the revenue to the business(es) from the child care facility cannot exceed the direct operating cost of the facility. For more information about the Arkansas Day Care Facility Tax Incentive Program, contact the Arkansas Department of Economic Development at (501) 682-1121.
In an effort to stimulate the expansion and modernization of the existing facilities and equipment of Arkansas manufacturers, Arkansas has implemented the Manufacturer's Investment Sales and Use Tax Credit. A company's expansion and modernization of its existing equipment or facilities will ultimately enhance its competitiveness in today's marketplace.
The state of Arkansas offers a credit against a manufacturer's sales and use tax liability of seven percent of the total project cost when the investment exceeds $5 million. The investment must be in construction or expansion of a facility that has been in operation in the state for at least two years. Construction or expansion includes modernization of old plants through major modifications or replacement of obsolete machinery.
To be eligible to receive the tax credit, a company must submit its project plan to the director of the Arkansas Department of Economic Development 30 days prior to construction. If approved, the application is sent to the Commissioner of Revenues. At the end of the first calendar year in which the construction is undertaken, a company submits to the Commissioner of Revenues a list of expenditures for that year. The Commissioner then issues a document that will credit the next year's taxes. The credit cannot exceed 50 percent of the tax liability for the reporting period. Credit will continue until the seven percent is exhausted or a six-year carryover period expires, whichever comes first.
A separate law allows an additional $100 tax credit for each new job created by a new or expanding company. Machinery and equipment, including technologically advanced equipment, used in the manufacturing process are exempt from sales and use tax.For more information about the Manufacturer's Investment Sales and Use Tax Credit, contact the Arkansas Department of Economic Development at (501) 682-1121.
Other specialized incentives available to Arkansas businesses include the Minority Business Development Program, which provides access to new market opportunities, financial resources, and management tools that may stimulate growth and development of minority owned and controlled business; and the Aerospace Enterprise Zone Act, which is very similar to the Enterprise Zone legislation. It provides exemptions from state and local sales and use tax, and allows an industry to claim a state income tax credit of $2,000 for each net new employee once certain criteria are met.
Copyright © 1998. If you have comments or questions regarding this page contact technical support , UALR IEA. Last Modified 9/3/98. https://conwayarkcc.org/business/incent.html