Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 51 - INCOME TAXES (§§ 26-51-101 — 26-51-2804) › Subchapter 22 - ARKANSAS HISTORIC REHABILITATION INCOME TAX CREDIT ACT (§§ 26-51-2201 — 26-51-2208) › Section 26-51-2204 - Arkansas historic rehabilitation income tax credit

(a)
(1)
There is allowed an income tax credit up to the amount of tax imposed by the Income Tax Act of 1929, §
26-51-101
et seq., or the premium tax to a holder of an Arkansas historic rehabilitation income tax credit.
(2)
Beginning March 20, 2015, the income tax credit allowed under subdivision (a)(1) of this section is allowed only one (1) time in a twenty-four-month period for each eligible property.
(b)
(1)
The Arkansas historic rehabilitation income tax credit shall be in an amount equal to twenty-five percent (25%) of the total qualified rehabilitation expenses incurred by the owner to complete a certified rehabilitation up to the first:
(A)
(i)
For a project that starts on or after January 1, 2009, five hundred thousand dollars ($500,000) of qualified rehabilitation expenses on income-producing property.
(ii)
For a project that starts on or after July 1, 2017, one million six hundred thousand dollars ($1,600,000) of qualified rehabilitation expenses on income-producing property; or
(B)
One hundred thousand dollars ($100,000) of qualified rehabilitation expenses on nonincome-producing property.
(2)
Beginning fiscal year 2024, the amount of the Arkansas historic rehabilitation income tax credit shall be equal to the following percentages of the total qualified rehabilitation expenses incurred by the owner to complete a certified rehabilitation up to the amounts stated in subdivisions (b)(1)(A) and (B) of this section:
(A)
For qualified rehabilitation expenses incurred in a city with a population of less than ten thousand (10,000), forty percent (40%);
(B)
For qualified rehabilitation expenses incurred in a city with a population of at least ten thousand (10,000) and not more than fifty thousand (50,000), thirty-five percent (35%); and
(C)
For qualified rehabilitation expenses incurred in a city with a population of more than fifty thousand (50,000), thirty percent (30%).
(c)
(1)
(A)
The Division of Arkansas Heritage shall only issue Arkansas historic rehabilitation income tax credits for up to four million dollars ($4,000,000) in any one (1) fiscal year.
(B)
Beginning fiscal year 2022, the division shall only issue Arkansas historic rehabilitation income tax credits for up to eight million dollars ($8,000,000) in any one (1) fiscal year.
(2)
Any unused Arkansas historic rehabilitation income tax credits shall not be carried over to the following fiscal year for use by the division.
(3)
Any certification of completion that would cause the Arkansas historic rehabilitation income tax credit to exceed the amounts listed in subdivision (c)(1) of this section during the fiscal year will be carried forward for consideration during the following fiscal year.
(d)
The Arkansas historic rehabilitation income tax credit is available to an owner of an eligible property that:
(1)
Completes a certified rehabilitation that is placed in service after January 1, 2009;
(2)
Has a minimum investment of:
(A)
Twenty-five thousand dollars ($25,000) in qualified rehabilitation expenses on income-producing properties; or
(B)
Five thousand dollars ($5,000) in qualified rehabilitation expenses on nonincome-producing properties; and
(3)
Is not receiving a tax credit under any other state law for the same eligible property.
(e)
Upon completion of a rehabilitation, the owner shall submit documentation required by the division to verify that the completed rehabilitation qualifies as a certified rehabilitation.
(f)
If the division determines that a rehabilitation qualifies as a certified rehabilitation and that the certified rehabilitation is complete, the division shall issue a freely transferable certification of completion specifying the total amount of the qualified rehabilitation expenses and Arkansas historic rehabilitation income tax credit allowed.
(g)
(1)
If the owner requests a review of the division determination under subsection (f) of this section, the owner shall submit a written request for review of the determination.
(2)
The owner shall submit the request in writing to the division within thirty (30) days of the date of notification to the owner of the determination.
(h)
(1)
The owner shall certify to the division the validity of costs and expenses claimed as qualified rehabilitation expenses and shall maintain a record supporting the claim for at least five (5) years after the issuance of the certification of completion.
(2)
An owner's record supporting a claim for qualified rehabilitation expenses may be reviewed by the division, the appropriate tax collection authority, or a holder.
Amended by Act 2023, No. 650,§ 1, eff. 8/1/2023.
Amended by Act 2021, No. 840,§ 1, eff. 7/28/2021.
Amended by Act 2019, No. 910,§ 5713, eff. 7/1/2019.
Amended by Act 2019, No. 910,§ 5712, eff. 7/1/2019.
Amended by Act 2019, No. 470,§ 1, eff. for taxable years beginning on or after 1/1/2019.
Amended by Act 2017, No. 393,§ 1, eff. 7/1/2017.
Amended by Act 2015, No. 567,§ 2, eff. 3/20/2015.
Acts 2009, No. 498, § 1.