Arkansas offers a wide range of incentives designed to foster business growth and attract investments across multiple sectors.  With a strong focus on innovation, workforce development, and manufacturing, Arkansas creates an attractive environment for businesses to thrive.  Below is a comprehensive overview of key incentives, including eligibility criteria and potential value.

Arkansas Advantage Program

Overview

The Arkansas Advantage Program provides income tax credits to businesses in certain sectors, including manufacturing, service centers, and certain distribution operations, to encourage job creation and economic development in the state.

Eligibility

• Minimum capital investment of $500,000 in new facilities or expansion projects.

• Must create at least 10 new jobs within two years of the investment.

Incentive Value

• Income tax credits of up to 5% of eligible capital investment.

• The credits can be claimed over 10 years, with a maximum of $1 million per year.

Application Process

Businesses must submit an application to AEDC to determine eligibility and claim the credit.

Arkansas Tax Back Program

Overview

The Arkansas Tax Back Program provides refunds of sales and use taxes paid on purchases for qualifying manufacturing and research projects.  This program is aimed at encouraging manufacturing and other qualifying industries to invest in the state.

Eligibility

• Manufacturing businesses or those involved in research and development.

• Minimum capital investment of $5 million for urban areas, $500,000 for rural areas.

Incentive Value

• Refund of up to 4% of sales and use taxes on purchases of qualifying equipment, building materials, and machinery.

Application Process

Businesses must apply for pre-approval through the Arkansas Economic Development Commission (AEDC), with ongoing reporting required to claim the refund.

Arkansas Economic Development Incentive (AEDI) Act

Overview

The AEDI Act offers incentives to companies that create new jobs, increase wages, and make capital investments in Arkansas.  This program is intended to attract new businesses and support the expansion of existing operations.

Eligibility

• Companies must invest at least $500,000 in new capital and create a minimum of 25 new full-time jobs.

• Businesses must maintain at least 50% of jobs for at least five years.

Incentive Value

• Companies may receive income tax credits based on their capital investment and the number of jobs created.

• Available credits may cover up to 5% of qualified capital investment, along with additional job creation incentives.

Application Process

Application for approval must be made through AEDC.  Businesses will need to provide detailed plans for job creation and investment.

Digital Products Tax Credit

Overview

The Digital Products Tax Credit offers tax credits for businesses involved in the development or production of digital products such as software, video games, or digital media.

Eligibility

• Must be involved in digital product development or video game production.

• Must create at least 5 new jobs that are directly related to the digital products industry.

Incentive Value

• Tax credit of up to 30% of the cost of developing digital products.

• Maximum credit value: $1 million per project.

Application Process

Applicants must be certified by AEDC, and the credit is available on a first-come, first-served basis.

Governor’s Quick Action Closing Fund (QACF)

Overview

The QACF is a discretionary fund designed to close deals for high-impact economic development projects that are poised to make significant investments in Arkansas.  This fund helps companies with immediate site development needs or financial assistance to create jobs quickly.

Eligibility

• Businesses must demonstrate the ability to create at least 50 new jobs or make substantial capital investment.

• Must be a strategic project that offers significant economic impact.

Incentive Value

• Funds are typically awarded on a case-by-case basis, with amounts ranging up to several million dollars depending on the project.

Application Process

Applications are submitted directly to the Governor’s office through AEDC, and funds are awarded based on business needs and project feasibility.

Arkansas Research & Development (R&D) Tax Credit

Overview

This program provides tax credits for companies conducting research and development activities in Arkansas, including product and process innovation.

Eligibility

• Businesses involved in R&D in any industry, including manufacturing, healthcare, or technology.

• The research must be aimed at product development, process improvement, or technological advancements.

Incentive Value

• 20% tax credit on qualified research expenditures above a base amount.

• Companies can carry forward unused credits for up to five years.

Application Process

Businesses must maintain detailed records of R&D activities and apply for the credit through AEDC.  Certification is required to claim the credit.

Manufacturing Training Program

Overview

This program helps manufacturers reduce the costs of training their workforce by providing financial assistance for training expenses.

Eligibility

• Available to businesses in the manufacturing sector that are creating new jobs or expanding existing operations.

• Companies must have at least 50 full-time employees and demonstrate the need for a customized training program.

Incentive Value

• Funding for up to 50% of the training costs for employees, including wages and training materials.

• Maximum funding: $500,000 per year per company.

Application Process

Businesses must apply to AEDC for funding and submit a detailed training plan.

Historic Rehabilitation Tax Credit

Overview

The Historic Rehabilitation Tax Credit incentivizes the restoration and preservation of historic properties for commercial use.

Eligibility

• Properties must be listed on the National Register of Historic Places.

• The rehabilitation must meet state and federal preservation standards.

Incentive Value

• A tax credit of 25% of qualified rehabilitation expenditures.

• Up to $1.5 million in credits for a single project.

Application Process

Applicants must submit a project proposal to the Arkansas Historic Preservation Program and follow the federal and state certification process.

Conclusion

Arkansas offers a broad spectrum of incentives aimed at fostering growth in industries such as manufacturing, technology, digital media, and research.  These programs provide businesses with valuable financial relief and support for expanding operations, investing in new projects, and hiring a skilled workforce.