Source: https://jeffersoncountyalliance.com/incentives-taxation-0
Timestamp: 2019-04-21 16:45:35+00:00

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Jefferson County voters approved a 3/8-cent sales tax in February 2011 to generate funds for economic development incentives and workforce training. Collection of the tax began in July 2011. Revenues are now building up and will be considered, on a case-by-case basis by the county oversight board, for distribution based on the number of jobs created and capital investment of individual projects.
The Economic Development Alliance for Jefferson County has designated funds up to $75,000 that can be accessed to assist with project infrastructure needs (such as a rail switch).
If the client uses revenue bond financing for the project, Alliance staff can assist the company in its negotiations with the community for a payment in-lieu of property taxes (PILOT) up to 65%.
Alliance staff can facilitate contact with City permitting authorities.
The State of Arkansas operates the way businesses do, proactively anticipating opportunities and quickly responding to challenges in innovative ways. This approach, combined with incentive programs, makes Arkansas a profitable choice for locating or expanding a business.
Arkansas' performance-based incentives are naturally competitive and easy to use. The Arkansas Economic Development Commission (AEDC) will focus on your business's specific needs, conduct a cost-benefit analysis, and design a tailored incentive package.
Arkansas' incentives are based on payroll instead of number of jobs and are determined according to location. Counties are divided into four tiers, based on poverty rate, unemployment, per capita income, and population growth; incentives are more lucrative in less-developed counties. Tiers are assigned annually on July 1, based on the previous years' statistics. Jefferson County is a tier four county.
Tax incentives may be combined to allow for more flexibility.
Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full time, permanent employees hired as a result of the project.
In all tiers, in order to qualify for the Advantage Arkansas program, the proposed hourly wage of the new employees hired as a result of the project must be equal to or greater than the lowest county average hourly wage. Currently, the average hourly wage threshold for the Advantage Arkansas program is $10.86.
The payroll threshold for qualifying for Advantage Arkansas and the benefit received depends on the tier in which the business locates or expands.
Arkansas counties are ranked into four tiers based on poverty rate, population growth, per capita income and unemployment rate. Jefferson County is a tier four county.
The Advantage Arkansas income tax credit is earned each year for a period of five years. The income tax credit cannot offset more than 50 percent of a business' income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.
Scientific and technical services businesses. The firms must derive at least 75 percent of their revenue from out-of-state sales. The average hourly wage paid by these businesses must exceed 150 percent of the county or state average hourly wage, whichever is less.
If you have any questions concerning the Advantage Arkansas Program, please call the Arkansas Economic Development Commission at 1-800-ARKANSAS or 501-682-1211.
Applicants for the Tax Back must also obtain an endorsement resolution from the local governing authority authorizing the refunds of its local taxes. Applicants must meet the qualification criteria under the requisite Advantage Arkansas or Create Rebate program in which they are participating and must be approved by AEDC.
The refund of sales and use taxes shall not include the refund of taxes dedicated to the Educational Adequacy Fund provided in § 19-5-1227 or the taxes dedicated to the Conservation Tax Fund provided in § 19-6-484.
If you have any questions concerning the Tax Back Program, please call Hunter Hauk, AEDC Incentives Manager, at 501-682-1682.
The requirements for InvestArk are the same for all tiers. The InvestArk sales and use tax credit is available to businesses established in Arkansas for two years or longer that invest $5 million or more at a single location in plant or equipment for new construction, expansion, or modernization. A credit against the business' state direct-pay sales and use tax liability, equal to one-half percent (1/2%) above the state sales and use tax rate in effect at the time of application, is earned based on the total eligible project cost. Currently the percentage that may be earned as credit is 7% of eligible project expenditures. In any year, tax credits claimed under this program cannot exceed 50% of the business' sales and use tax liability on taxable purchases. All reported expenditures will be audited by the Arkansas Department of Finance and Administration.
The credit is earned in the year the eligible expenditure is made and can be applied against the business' state direct-pay sales and use tax liability in the year following the year of the expenditure. Any unused credits may be carried forward for a period of up to five (5) years. Total project expenditures must be incurred within four (4) years of the date the project is approved by AEDC.
The business must be approved for the program prior to beginning construction or incurring eligible project costs and obtain a direct-pay sales and use tax permit from the State of Arkansas.
An application for the InvestArk program may be obtained by contacting Hunter Hauk, AEDC Incentives Manager, at 501-882-1682.
Applications for the Advantage Arkansas program are available by contracting AEDC's Business Development Division at (501) 682-7675. Specific requirements of this program can be downloaded at www.arkansasedc.com. If you have any questions concerning the Advantage Arkansas Program, please call the Arkansas Economic Development Commission at 1-800-ARKANSAS or 501-682-1211.
The Business and Industry Training Program of the Arkansas Economic Development Commission (AEDC) provides pre-employment training for Arkansas workers to meet the skills needed in the state's new and expanding businesses. AEDC's Existing Business Resource Team works with the department's Business Development Unit during the negotiation process. After a commitment to the state is made, a Project Manager is assigned to develop the training plan with the business.
The Existing Workforce Training Program (EWTP) provides financial assistance to Arkansas' businesses and eligible consortia of businesses for upgrading the skills of the existing workforce. Skills upgrade training is instruction conducted in a classroom environment at a work site, an educational institution or a neutral location that provides an existing, full-time employee with the new skills necessary to enhance productivity, improve performance, and/or retain employment.
Manufacturers in the NAICS codes 31-33.
Computer firms that derive at least 75 percent of their revenue from sales outside of Arkansas and have no retail sales to the general public.
Firms primarily engaged in commercial, physical and biological research as defined by NAICS code 541710.
To be considered for EWTP financial assistance, a company must submit an application prior to the beginning of training, provide assurance that the participants involved in the proposed training program possess the requisite literacy skills, and clearly tie the proposed training to specific business goals and performance objectives.
Arkansas provides a 30 percent state income tax credit to eligible companies for tuition reimbursements they make on behalf of employees for approved educational expenses. The employees must successfully complete the course at an accredited Arkansas post-secondary educational institution. The credit authorized by this program cannot offset more than twenty-five percent (25%) of the company's state income tax liability in any tax year.
Arkansas' Research and Development incentive programs are intended to provide incentives for university-based research, in-house research, and research and development in start-up, technology-based enterprises. Tax credits under these programs may be carried forward for nine years and may offset up to 100 percent of a business' tax liability in a given year.
New and existing eligible businesses that conduct "in-house" research that qualifies for federal research and develpment tax credits may qualify for inhouse research income tax credits.
The credit is allowed 20% of qualified research expenditures that exceed the base year, for a period of three years and the incremental increase in qualified research and expenditures for the succeeding two years. For a new in-house research facility, the base year is zero. Therefore, in the first three years following the date of the financial incentive agreement, all eligible expenditures can qualify for the credit.
The Strategic Value and Research and Development incentives are for qualifying businesses that invest in: 1) in-house research in an area of strategic value; or 2) a research and development project offered by the Arkansas Science and Technology Authority. Research in an area of strategic value means research in fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan approved from time to time by the Board of Directors of the Arkansas Science and Technology Authority.
The income tax credit is equal to 33% of qualified research expenditures. The maximum tax credit that may be claimed by a taxpayer under this program is $50,000 per tax year.
Targeted businesses, at the discretion of the AEDC executive director, may be offered income tax credits equal to 33% of the qualified research and development expenditures incurred each year for up to five years. The application for this income tax credit shall include a project plan, which clearly identifies the intent of the project, the expenditures planned, the start and end dates of the project and an estimate of total project costs.
Substantially all of the activities related to the research must constitute elements of a process of experimentation relating to a new or improved function, performance, reliability or quality.
Income tax credit for research and development earned by targeted businesses may be sold. The business must make application to AEDC for the sale of credits earned under this section. Upon application and approval by AEDC, the business may sell earned income tax credits. AEDC may assist the targeted business in finding a buyer for the tax credits.
A targeted business earning research and development tax credits is prohibited from earning job creation tax credits, as authorized by 15-4-2709 or research tax credits as authorized by § 15-4-2708(a), for the same expenditure.
Arkansas allows taxpayers to receive an income tax credit for the purchase of equipment used exclusively for reduction, reuse or recycling of solid waste material for commercial purposes, whether or not for profit, and the cost of installation of such equipment by outside contractors.
the cost of replacing existing waste reduction, reuse, or recycling equipment and installation costs deemed eligible by the Arkansas Department of Environmental Quality. Credits may be carried forward for three consecutive years following the taxable years in which the credits accrued.
The amount of the tax credit shall equal thirty percent (30%) of the cost of equipment and installation costs deemed eligible by the Arkansas Deparment of Environmental Quality. Credits may be carried forward for a three (3) consecutive years following the taxable year in which the credits accrued.
Taxpayers receiving credit under this Act for the purchase of machinery and equipment shall not be entitled to any other state or local tax credit or deduction based on the purchase of the machinery or equipment, except normal depreciation.
Arkansas offers tax incentives for businesses that provide childcare for their employees.
A business may choose between two state income tax credit options: 1) a credit of 3.9 percent of the total annual payroll of the employees working in the childcare facility, or 2) a one-time $5,000 state income tax credit for the first year that the business provides its employees with a childcare facility. The income tax credit may be carried forward for two years or until used entirely, whichever occurs first.
In addition to either option, businesses may receive a refund on sales and use taxes on construction materials and furnishings purchased to equip an approved childcare facility.
To qualify for these incentives, the business must be approved to operate an early childcare program. Eligibility is determined by the Arkansas Deparment of Human Services, Division of Child Care and Early Childhood Education. The business may choose to operate the facility or contract the operations.
Arkansas's Freeport Law exempts from property tax those finished goods and raw materials in transit or awaiting shipment to out-of-state companies.
Eligible minimum project costs must be $1 million, except in high unemployment counties, where it is $500,000.
Additionally, eligible businesses may receive a state income tax credit equal to 4 percent of the annual payroll of each new, fulltime, permanent employees.
* The following Arkansas counties are designated as "high unemployment" counties based upon the 2012 statewide annual labor force statistics compiled by the Arkansas Department of Workforce Services: Ashley, Chicot, Clay, Crittenden, Dallas, Desha, Drew, Lee, Phillips, St. Francis, and Woodruff.
Applications for the Tourism Development incentive program are available by contracting AEDC's Business Development Division at (501) 682-7675.
The Arkansas Public Roads Improvement Credit Act of 1999 provides an income tax credit to any individual, fiduciary or corporation subject to Arkansas state income tax that contributes to the Public Roads Incentive Fund of the Economic Development Commission. The contribution may be made to a general improvement fund or designated for a specific project that is approved by the AEDC Executive Director.
The credit cannot exceed 33 percent of the taxpayer's contribution. In any one tax year, the credit cannot exceed 50 percent of the taxpayer's net Arkansas state income tax liability after all other credits and reductions have been calculated. Any amount over 50 percent can be carried forward up to three years.
Create Rebate Program Negotiated by the Arkansas Economic Development Commission in highly competitive situations.
Create Rebate provides annual cash payments based on a company's annual payroll for new, full-time, permanent employees. The benefit depends on the tier in which the company locates. Jefferson County is a tier four. In all tiers, a minimum payroll of new, full-time, permanent employees of $2 million annually is required. The minimum payroll threshold must be met within 24 months of the effective date of the financial incentive agreement. No benefits may be claimed until the $2 million annual payroll threshold is met.
The Create Rebate benefits are available after the business certifies to the Arkansas Department of Finance and Administration that it has fulfilled the minimum pay roll requirements and the reported payroll has been verified by the Arkansas Department of Finance and Administration.
Specific requirements of this program can be downloaded at www.arkansasedc.com. If you have any questions concerning the Create Rebate Program, please call Hunter Hauk, AEDC Incentives Manager, at 501-682-1682.
The ArkPlus program may be offered at the discretion of the director of the Arkansas Economic Development Commission in highly competitive situations.
ArkPlus is a state income tax credit program that provides tax credits of 10 percent of the total investment in a new location or expansion project.
ArkPlus requires both a minimum investment and a minimum payroll of new, full-time, permanent employees hired as a result of the project, depending on the tier in which the business locates. Jefferson County is a tier four county.
Total project expenditures must be incurred within four years of the date the project was approved by AEDC. New, full-time, permanent employees must be hired within 48 months of the date the financial agreement is signed.
The income tax credits may be used to offset 50 percent of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine years beyond the tax year in which the credit was first earned.
A refund of sales and use taxes paid on the purchase of building materials and machinery and equipment associated with the approved project.
A transferable income tax credit equal to 10 percent of payroll for up to five years.
The income tax credits earned under this program may be sold upon approval by the AEDC.
Additional eligibility criteria may be required for individual targeted programs (sales and use tax refund for targeted businesses, payroll income tax credit for targeted businesses, payroll debate for targeted businesses, and targeted ArkPlus.
This incentive program provides a refund of sales and use taxes paid on the purchases of building materials and taxable machinery and equipment associated with the approved project for targeted businesses, as defined above. In addition to meeting targeted business eligibility requirements, the business must invest at least $100,000 and meet the eligibility criteria of the Targeted Business Payroll Income Tax Credit Program as authorized by § 15-4-2709.
A targeted business with an annual pay roll in excess of one million dollars ($1 million) is excluded from participating in this program.
Te application for a sales and use tax refund must be accompanied by an endorsement resolution from the local governing authority (city council or quorum court) that authorizes the refund of its local taxes.
This incentive is offered only at the discretion of the AEDC Executive Director.
The discretionary payroll income tax credit for targeted businesses assists start-up businesses in targeted sectors that pay significantly more than the state or county average wage of the county in which the business locates. A targeted business with an annual payroll in excess of one million dollars ($1 million) is excluded from participating.
The benefit for a qualifying targeted business is a 10 percent income tax credit based on its annual payroll, with a cap of $100,000 per year in earned income tax credits. The incentive may be offered for a period not to exceed five years.
A unique feature of this incentive is the ability of the business that earns the targeted business income tax credit to sell the credits. The business must make application to the AEDC for the sale of credits. Upon approval by the department, the business may sell earned income tax credits within one year of issuance. The AEDC may assist the business in finding a buyer for the tax credits.
Since one of the allowable costs under the research and development tax credits (discussed below) is the salary of a person performing research, a business earning job creation income tax credits for targeted businesses is prohibited from earning research and development tax credits, as authorized by § 15-4-2708 or by § 26-51-1102(b) for the same expenditure.
Targeted businesses creating new payroll exceeding $250,000 may be offered, at the discretion of the AEDC Executive Director, rebates of five percent of payroll for up to ten years. To qualify, the average hourly wage of the new, full-time permanent employees must be at least 175% of the state or county average hourly wage, whichever is less. The payroll rebate for targeted businesses may not be used in conjunction with the payroll income tax credit for targeted businesses.
Targeted businesses with payrolls exceeding $250,000 may be offered, at the discretion of the AEDC Executive Director, income or sales and use tax credits based upon investment. Prior to the execution of the financial incentive agreement, the targeted buisness must elect to receive the credits as sales and use tax credits or income tax credits.
To qualify, the average hourly wage of the new, full-time permanent employees must be at least 175% of the state or county average hourly wage, whichever is less. Additionally, targeted businesses must invest a minimum of two hundred fifty thousand dollars ($250,000) within four (4) years of the effective date of the financial incentive agreement.
4. The credit amount shall be two percent (2%) of the investment up to five hundred thousand dollars ($500,000) plus four percent (4%) of the investment in excess of five hundred thousand dollars ($500,000) up to one million dollars ($1,000,000) plus (6%) of the investment in excess of one million dollars ($1,000,000) up to two million dollars ($2,000,000) plus eight percent (8%) of the investment in excess of two million dollars ($2,000,000).
1. A targeted business that pays at least one hundred seventy-five percent (175%) of the state or county average hourly wage, whichever is less, may offset fifty percent (50%) of its tax liability.
2. A targeted business that pays at least two hundred percent (200%) of the state or county average hourly wage, whichever is less, may offset seventy-five percent (75%) of its tax liability.
3. A targeted business that pays at least two hundred twenty-five percent (225%) of the state or county average hourly wage, whichever is less, may offset one hundred percent (100%) of its tax liability.
The income tax credit may be applied against the approved company's Arkansas income tax liability. The sales and use tax credit may be applied against the company's state sales and use tax liability as reported on its monthly sales and use tax report in the calendar year following the calendar year of expenditure. Any unused credit may be carried forward for a period not to exceed nine (9) tax years after the tax year in which it was first earned.
The Equity Investment Incentive Program is a discretionary incentive targeted toward new, technology-based businesses paying wages in excess of the state or county average wage. If offered, this program allows an approved business to offer an income tax credit to investors purchasing an equity investment in the business.
The income tax credit earned may be used to offset 50% of the investor's Arkansas income tax liability. Any unused credit may be carried forward for a period of nine years.
The income tax credit earned may be sold upon approval by AEDC.
The Non-Profit Incentive Program, offered at the discretion of the AEDC executive director, provides an annual payroll rebate for up to five years equal to 4 percent of the payroll of new, full-time, permanent employees, hired by national or regional non-profit headquarters locating or expanding in Arkansas.
Eligible non-profit organizations must create a payroll for new, full-time, permanent employees of at least five-hundred thousand dollars ($500,000) and pay an average wage in excess of 110 percent of the state or county average wage (whichever is less) in the county in which the organization locates or expands. In addition, the non-profit organization must receive 75 percent of its income from out-of-state sources.
If you have any questions concerning the Non-Profit Incentive Program, please call Hunter Hauk, AEDC Incentives Manager, at 501-682-1682.
Amendment 82 allows the State of Arkansas to issue General Obligation Bonds to finance infrastructure costs associated with eligible companies locating or expanding operations in Arkansas. The state can issue bonds to fund a prospect's infrastructure needs through the Arkansas Department Finance Authority, limited to 5% of net general revenues during the most recent fiscal year.

References: § 19
 § 19
 § 15
 § 15
 § 15
 § 26