Arkansas Code of 1987 (2023) › Title 6 - EDUCATION (§§ 6-1-101 — 6-87-104) › Subtitle 2 - ELEMENTARY AND SECONDARY EDUCATION GENERALLY (§§ 6-10-101 — 6-28-206) › Chapter 18 - STUDENTS (§§ 6-18-101 — 6-18-2608) › Subchapter 23 - PHILANTHROPIC INVESTMENT IN ARKANSAS KIDS PROGRAM ACT (§§ 6-18-2301 — 6-18-2308) › Section 6-18-2304 - Eligible taxpayer contributions

(a)
(1)
For tax years beginning on and after January 1, 2022, a taxpayer may claim a state income tax credit against the taxes imposed by the Income Tax Act of 1929, §
26-51-101
et seq., for one hundred percent (100%) of eligible contributions made to a scholarship-granting organization under this subchapter.
(2)
An eligible contribution to a scholarship-granting organization in exchange for a tax credit under subdivision (a)(1) of this section shall not be claimed as a charitable deduction to income under §
26-51-419
.
(3)
An eligible contribution to a scholarship-granting organization where no tax credit is awarded under subdivision (a)(1) of this section may be claimed as a charitable deduction to income under §
26-51-419
.
(b)
A tax credit claimed under subsection (a) of this section:
(1)
Shall be in an amount equal to the total eligible contribution made by the eligible taxpayer to the scholarship-granting organization during the calendar year in which the receipt under §
6-18-2306(3)
is issued, but not in excess of the Arkansas state income tax liability of the taxpayer; and
(2)
May be carried forward in any amount to the next-succeeding taxable year and annually thereafter for a total period of three (3) years.
(c)
(1)
(A)
Except as provided by subdivision (c)(1)(B) of this section, the total amount of state income tax credits awarded under this section shall not exceed six million dollars ($6,000,000) per calendar year.
(B)
(i)
If in any calendar year the total amount of state income tax credits awarded under this section is equal to or greater than ninety percent (90%) of the total amount of state income tax credits that may be awarded, the total amount of state income tax credits that may be awarded in the next calendar year and each subsequent calendar year thereafter shall be the total amount of state income tax credits authorized in the previous calendar year plus five percent (5%).
(ii)
An increase in the total amount of state income tax credits for subsequent calendar years under subdivision (c)(1)(B)(i) of this section shall be applied to the total amount of state income tax credits authorized in the previous calendar year.
(iii)
At the beginning of each calendar year, the Department of Finance and Administration shall certify the total amount of state income tax credits that may be awarded in that calendar year.
(2)
The Tax Credits and Special Refunds Section of the Department of Finance and Administration, or its successor, shall:
(A)
Award the tax credits on a first-come, first-served basis from the receipts provided to the Tax Credits and Special Refunds Section of the Department of Finance and Administration under §
6-18-2306(3)
; and
(B)
Notify the Division of Elementary and Secondary Education when the annual cap under subdivision (c)(1) of this section is met.
Amended by Act 2023, No. 237,§ 41, eff. 3/8/2023.
Added by Act 2021, No. 904,§ 1, eff. 7/28/2021.