New Arkansas Sales/Use Tax Incentives Save Corporations Millions
InvestArk is a sales and use tax credit program for businesses that are investing $5 million in a single location for new construction, expansion, or updating. This credit is available for businesses that have been established in Arkansas for 2+ years and must be pre-approved. 7% of eligible project expenses may be earned as a credit, but may not exceed 50% of the business’ sales tax liability on taxable purchases. Credit that is unused may be carried over for up to 5 years.
Tax Back is a sales and use tax refund for the purchase of building materials and equipment for businesses that invest $100,000, complete a job creation agreement, and create rebate programs. Alternatively, businesses must meet the Advantage Arkansas requirements. Some taxes are not refundable, however, making 5.5% of Arkansas’ 6.5% taxes refundable.
Eligibility according to Arkansas Economic Development Commission, is as follows:
- Businesses primarily engaged in the design and development of prepackaged software, digital content production and preservation, computer processing, data preparation services, or information retrieval services.
- Eligible computer-related businesses must derive at least 75% of their revenue from out-of-state sales.
- Businesses primarily engaged in motion picture production that derive at least 75% of their revenue from out-of-state sales.
- Distribution centers that derive 75% of their sales revenue from out-of-state customers.
- Intermodal facilities with more than 1 mode of interconnected movement of freight, commerce, or passengers.
- Office sector businesses that support primary business needs and that are non-retail businesses deriving at least 75% of their sales revenue from out-of-state.
- National or regional corporate headquarters as classified in the NAICS code 551114.
- Firms primarily engaged in commercial, physical, and biological research as classified in the NAICS code 541710.
- Scientific and technical services businesses that derive at least 75% of their revenue from out-of-state sales. The average hourly wage paid by these businesses must exceed 150% of the county or state average hourly wage, whichever is less.
For help understanding the new Arkansas sales/use tax incentives and how they may benefit your company, we are here to help!
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