Act 947 of 1993, as amended by Acts 394 and 1250 of 1995 and 807
of 1997, authorizes sales/use tax refunds and income tax credits
to businesses located in Arkansas that embark on certified projects
involving the construction of a new plant or facility, the expansion
of an established plant or facility, or, the replacement of production
or processing equipment or support infrastructure. To obtain the
benefits of this Act, the business does not have to be located within
a designated enterprise zone; however, the qualified business must
fit into specific Standard Industrial Classification (SIC) code numbers
20 through 39, 7375, 7376, or is a distribution center, corporate
headquarters, office sector business, trucking sector business operating
under SIC 4231, or, research, development, testing business under
SIC 8731. Businesses fitting into SIC codes 20-39, 7375, 7376 and
8731 should hire at least one new permanent employee; while distribution
centers must hire at least 25, corporate headquarters and office
sector businesses at least 50, and trucking sector businesses at
least 100 new permanent employees. Also, any industry that locates
a facility at a municipal airport which qualifies as a special target
applicant is eligible to apply for benefits regardless of whether
the industry would otherwise qualify for the benefits of the Enterprise
Zone Program. A special target applicant refers to any governing
body of a municipal airport wherein is located a military installation
slated for closure, or any governing body of a municipal airport
located within 30 miles of a military installation slated for closure,
provided the installation exceeds 30,000 acres of total land.
The income tax credit is equal to 100 times
the average hourly wage paid per net new
permanent employee. This credit is doubled,
with a maximum of $2,000.00, if the business
is located in a county that had an unemployment
rate greater than 10% or greater than 3%
of the state's average unemployment rate
for the preceding calendar year. A new permanent
employee is a position or job which was created
as a result of the project and which is filled
by one or more employees or contractual employees.
The position must have had someone working
in it for at least twenty-six (26) consecutive
weeks with an average of at least thirty
(30) hours per week.
This tax credit shall be used for the taxable
year in which the net new permanent employees
were hired. If the entire credit cannot be
used in the year earned, the remainder may
be applied against the income tax for the
succeeding four (4) years or until the credit
is entirely used, whichever occurs first.
For projects approved on or after March 25,
1997, the credit may be applied against income
tax for the succeeding nine (9) years .
The sales and use tax refund is allowed on
the purchases of materials used in the construction
of a building or buildings, or any addition
or improvement thereon, and machinery and
equipment to be located in or in connection
with the building or buildings.
For further information regarding application
into the Enterprise Zone Program, please
contact:
Arkansas Economic Development Commission
One State Capitol Mall
Little Rock, AR 72201
(501) 682-7310
Learn more about business incentive and tax credit programs at the
Arkansas Department of Finance and Administration web site.
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