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15-4-2708. Research and development tax credits.
Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-2708. Research and development tax credits.
(a)(1)(A) Eligible businesses that have not previously been approved for incentives under this subsection and that conduct in-house research that has been approved for federal research and development tax credits may qualify, at the discretion of the Director of the Arkansas Economic Development Commission, for an income tax credit of up to twenty percent (20%) of the incremental amount spent on in-house research that exceeds the baseline established in the preceding year, for a period of five (5) years, subject to extension at the discretion of the director.
(B) The initial baseline for a qualified business new to the incentives offered under this subsection is the amount of research conducted in the state as claimed for federal research and development tax credits during the most recent year.
(C) Tax credits for the first year shall be calculated based on the incremental eligible expenditures for research and development at the end of the first year minus the research and development expenditures as reported by the qualified business for research and development tax credits under subdivision (a)(1)(B) of this section.
(D) Tax credits for succeeding years shall be calculated as the difference between the current year's research conducted in the state and the previous year's research conducted in the state.
(2) The income tax credit may be used to offset up to one hundred percent (100%) of a qualified business's annual income tax liability.
(3) Unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until the tax credits are exhausted, whichever occurs first.
(4) A qualified business claiming tax credits earned under this subsection shall not
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-2708
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:15-4-2708
Source file: gov.ar.code.title.15.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 96aee6bc640b8cc1a0984591ccefd8ace8b023ffaccbba0ad1b8f66be62007eb
Source location: content.xml paragraph 4784
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15-4-2708. Research and development tax credits.
(a)(1)(A) Eligible businesses that have not previously been approved for incentives under this subsection and that conduct in-house research that has been approved for federal research and development tax credits may qualify, at the discretion of the Director of the Arkansas Economic Development Commission, for an income tax credit of up to twenty percent (20%) of the incremental amount spent on in-house research that exceeds the baseline established in the preceding year, for a period of five (5) years, subject to extension at the discretion of the director.
(B) The initial baseline for a qualified business new to the incentives offered under this subsection is the amount of research conducted in the state as claimed for federal research and development tax credits during the most recent year.
(C) Tax credits for the first year shall be calculated based on the incremental eligible expenditures for research and development at the end of the first year minus the research and development expenditures as reported by the qualified business for research and development tax credits under subdivision (a)(1)(B) of this section.
(D) Tax credits for succeeding years shall be calculated as the difference between the current year's research conducted in the state and the previous year's research conducted in the state.
(2) The income tax credit may be used to offset up to one hundred percent (100%) of a qualified business's annual income tax liability.
(3) Unused tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until the tax credits are exhausted, whichever occurs first.
(4) A qualified business claiming tax credits earned under this subsection shall not receive the credit granted by § 26-51-1102(b) for the same expenditures.
(5)(A) The term of the financial incentive agreement for in-house research authorized by this subsection is for a period not to exceed five (5) years.
(B) The financial incentive agreement may be renewed for additional five-year periods upon the submittal to and approval of the director of a new application and project plan for incentives under this subsection.
(C) The qualified business claiming a tax credit under this subsection shall certify annually to the Arkansas Economic Development Commission the amount expended on in-house research.
(b)(1) Targeted businesses may qualify for an income tax credit equal to thirty-three percent (33%) of the amount spent on in-house research per year for the first five (5) tax years following the targeted business's signing a financial incentive agreement with the commission.
(2) The credits earned by targeted businesses may be sold as authorized in § 15-4-2709.
(c)(1) An Arkansas taxpayer may be offered, at the discretion of the director, an income tax credit equal to thirty-three percent (33%) of the amount spent on the research for the first five (5) tax years following the business's signing a financial incentive agreement with the commission, subject to the limitations established under § 26-51-1103 if the taxpayer invests in:
(A) In-house research in a strategic research area; or
(B) Projects under the research and development programs of the Division of Science and Technology of the Arkansas Economic Development Commission when the projects directly involve an Arkansas business and are approved by the director with the advice of the Board of Directors of the Division of Science and Technology of the Arkansas Economic Development Commission under rules promulgated by the commission for those programs.
(2) However, the maximum tax credit for a qualified business engaged in a research area of strategic value or involved in research and development programs sponsored by the division shall not exceed fifty thousand dollars ($50,000) per year.
(3) A qualified business claiming tax credits earned under this subsection shall not receive the credit granted by § 26-51-1102(b) for the same expenditures.
(4)(A) A qualified business claiming tax credits earned under this subsection may offset up to one hundred percent (100%) of the business's Arkansas income tax liability annually.
(B) Any unused income tax credits may be carried forward for up to nine (9) years after the year in which the credit was first earned or until exhausted, whichever occurs first.
(d) To claim the credit granted under subsections (a)-(c) of this section, the taxpayer shall file with his or her return, as an attachment to the form prescribed by the Secretary of the Department of Finance and Administration, copies of documentation to show that the commission has approved the research expenditure as a part of a qualified in-house research program or under the research and development programs of the division.
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Arkansas Code — all titles (historical 2020) · legal_authorities
15-4-2709. Targeted business special incentive.
(a) A special incentive based on the payroll of targeted businesses in the state may be offered, at the discretion of the Director of the Arkansas Economic Development Commission, to:
(1) Encourage the development of jobs that pay significantly more than the average hourly wage in the county in which the targeted business locates or the state average hourly wage if the state average hourly wage is less than the county average hourly wage; and
(2) Provide an incentive to assist with the start-up of businesses targeted for growth.
(b) To qualify for the special incentive provided by subsection (c) of this section, a business shall:
(1) Be identified by the Arkansas Economic Development Commission as being one of those business sectors targeted for growth under § 15-4-2703;
(2)(A) Have an annual payroll of the business for Arkansas taxpayers of not less than one hundred thousand dollars ($100,000) or more than one million dollars ($1,000,000).
(B) The payroll requirement under subdivision (b)(2)(A) of this section applies only to the initial eligibility determination and does not preclude qualified businesses from receiving incentives if, at any time after the financial incentive agreement has been approved, actual payroll does not satisfy the requirements in subdivision (b)(2)(A) of this section;
(3) Show proof of an equity investment of two hundred fifty thousand dollars ($250,000) or more; and
(4) Pay average hourly wages in excess of the lesser of one hundred fifty percent (150%) of the county or state average hourly wage for the county in which the targeted business locates or expands.
(c)(1) A targeted business may earn an income tax credit equal to ten percent (10%) of its annual payroll, with the m
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-4-2709
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 15-4-2709. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-1102. Credit granted.
(a)(1) There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax for the following types of donations or sales, or both, of new machinery and equipment to a qualified educational institution in connection with a qualified education program or a qualified research program:
(A) Donations of new machinery and equipment;
(B) Sales below cost of machinery and equipment; and
(C) Cash donations for the purchase of new machinery and equipment by a qualified educational institution.
(2) The amount of the credit granted by this section shall be:
(A) In the case of a donation, thirty-three percent (33%) of the cost of the machinery and equipment donated;
(B) In the case of a sale below cost, thirty-three percent (33%) of the amount by which the cost is reduced; and
(C) In the case of a cash donation, thirty-three percent (33%) of the amount of the cash donation used by the qualified educational institution to purchase new machinery and equipment from a wholesale, retail, or manufacturing business.
(b) There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax equal to thirty-three percent (33%) of the qualified research expenditures of a taxpayer in qualified research programs.
(c)(1) There is granted a credit against a taxpayer's Arkansas corporate income tax or Arkansas individual income tax equal to thirty-three percent (33%) of a donation made to an accredited institution of higher education to support a research park authority.
(2) In order to claim this credit authorized by subdivision (c)(1) of this section, a donation made in support of a research park authority shall:
(A) Be consistent with the research and developmen
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-1102
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-1102. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-1103. Limit on total credit.
(a) Total credits for qualified research expenditures, donations, and sales under this subchapter shall be allowed up to one hundred percent (100%) of the net tax liability of the taxpayer after all other credits and reductions in tax have been calculated.
(b) The credit shall be claimed in the tax year of the qualified research expenditure, donation, or sale. However, all or part of any unused credit may be carried over to and claimed in succeeding tax years until the credits are exhausted or until the end of the nine (9) tax years succeeding the tax year of the qualified research expenditure, donation, or sale, whichever occurs earlier. In no event shall a taxpayer claim a credit under this subchapter for any tax year in excess of one hundred percent (100%) of the net tax due after all other credits and reductions in tax have been calculated.
(c) Any person claiming any credit granted by this subchapter for any expense or contribution shall not take any deduction under the Arkansas income tax law for the same expense or contribution.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-1103
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-1103. This identifies an authority to review, not proof of applicability.