New Arkansas Sales/Use Tax Incentives Save Corporations Millions

ArkansasARKANSAS– The Arkansas Economic Development Commission has 2 new investment incentives encouraging businesses to the state; InvestArk and Tax Back.

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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