15-11-507. Tourism attraction project sales tax credit.

15-11-507. Tourism attraction project sales tax credit. (a) Upon receiving notification from the Director of the Arkansas Economic Development Commission that an approved company has entered into a tourism attraction project agreement and is entitled to the sales tax credits provided by this subchapter, the Secretary of the Department of Finance and Administration shall provide the approved company with such forms and instructions as are necessary to claim those credits. (b)(1)(A)(i)(a) An approved company shall be entitled to a credit if the approved company certifies to the Secretary of the Department of Finance and Administration that it has expended at least five hundred thousand dollars ($500,000) in a high-unemployment county and one million dollars ($1,000,000) in all other counties in approved costs and the director certifies that the approved company is in compliance with this subchapter. (b)(1) The Secretary of the Department of Finance and Administration shall then issue a sales tax credit memorandum to the approved company equal to fifteen percent (15%) of the approved costs. (2) However, in high-unemployment counties the Secretary of the Department of Finance and Administration shall issue a credit memorandum to the approved company equal to twenty-five percent (25%) of the approved costs. (c) The sales tax credit memorandum shall not include an offset of the tourism tax levied under § 26-63-401 et seq. (ii) Subsequent requests for credit for additional certified approved costs shall be filed with the Department of Finance and Administration during the term of the agreement. (B)(i) The Secretary of the Department of Finance and Administration may require proof of expenditures. (ii) Additional credit memoranda may be issued as the approved company certifies additional expenditures of approved costs. (2)(A) No sales tax credit memorandum shall be issued for any approved costs expended after the expiration of two (2) years from the date the agreement was signed by the director and the approved company. (B) However, the director, with the advice and consent of the Secretary of the Department of Finance and Administration, may authorize sales tax credits for approved costs expended up to four (4) years from the date the agreement was signed if the director determines that the failure to complete the tourism attraction project within two (2) years resulted from: (i) Unanticipated and unavoidable delay in the construction of the tourism attraction project; (ii) The tourism attraction project, as originally planned, will require more than two (2) years to complete; or (iii) A change in business ownership or business structure resulting from a merger or acquisition. (c) The credit memorandum issued pursuant to subsection (b) of this section may be used to offset a portion of the reported state sales, or gross receipts, tax liability of the approved company for all sales tax reporting periods following the issuance of the credit memorandum, subject to the following limitations: (1) Only increased state sales tax liability as defined in this subchapter may be offset by the issued credit; (2)(A) An approved company whose agreement provides that it shall expend approved costs in excess of five hundred thousand dollars ($500,000) in a high-unemployment county and one million dollars ($1,000,000) in all other counties shall be entitled to use one hundred percent (100%) of the issued credit to offset increased state sales tax liability during the first year if its tax liability is equal to or greater than the amount issued in the state sales tax credit memorandum. (B) Unused credits may be carried forward for a period of nine (9) years; (3) All issued credit memoranda shall expire at the end of the month following the expiration of the agreement as provided in § 15-11-506; and (4) Except as provided in § 15-11-511, credit memoranda shall not be used to offset any tax other than state sales tax. (d) The approved company shall have no obligation to refund or otherwise return any amount of this credit to the person from whom the sales tax was collected. (e) By April 1 of each year, the Secretary of the Department of Finance and Administration shall certify to the director the state sales tax liability of the approved companies receiving inducements under this section and the amount of state sales tax credits taken during the preceding calendar year. (f)(1) The Secretary of the Department of Finance and Administration may promulgate administrative rules as are necessary for the proper administration of this subchapter. (2) The Secretary of the Department of Finance and Administration may also develop such forms and instructions as are necessary for an approved company to claim the sales tax credit provided by this subchapter. (g)(1) The Secretary of the Department of Finance and Administration shall have the authority to obtain any information necessary from the approved company and the director to verify that approved companies have received the proper amounts of sales tax credits as authorized by this subchapter. (2) The Secretary of the Department of Finance and Administration shall demand the repayment of any credits taken in excess of the credit allowed by this subchapter.