Arkansas Administrative Code › Agency 003 - DEPARTMENT OF COMMERCE › Division 19 - Arkansas Economic Development Commission › Rule 003.19.20-004 - Donations or Sales of Equipment to Educational Institutions Tax Credit Program

Current through Register Vol. 49, No. 6, June, 2024
(Act 469 of 1985, as amended)
Rules
I.
Introduction
Act 469 of 1985, as amended and codified at § 26-51-1101
				et seq., was created to encourage the donation of machinery and equipment to
				accredited educational institutions for use in qualified educational programs
				or qualified research programs by providing an income tax credit incentive to
				entities making the donation. Act 203 of 2019 amended the program to allow a
				taxpayer that makes a cash donation to a qualified educational institution for
				the purchase of new machinery and equipment to receive a tax credit.
For more information, please contact:
Arkansas Economic Development Commission
Business Finance Division
1 Commerce Way, Suite 601
Little Rock, AR 72202
(501) 682-1121
II.
Definitions
1. "Accredited institution of higher
			 education" means a four-year public college or university that offers
			 bachelor's degrees and is recognized by the Division of Higher Education for
			 credit;
2. "Cost" means:
i. In the case of a donation or sale below
			 cost by a wholesale or retail business, the amount actually paid by the
			 wholesaler or retailer to the supplier for the machinery and
			 equipment;
ii. In the case of a
			 donation or sale below cost by a manufacturer of machinery and equipment, the
			 enhanced value of the materials used to produce the machinery and equipment,
			 which shall be deemed to be the lowest price at which the manufacturer sells
			 the machinery and equipment; or
iii. In the case of a cash donation by a
			 taxpayer to a qualified educational institution for the purchase of new
			 machinery and equipment, the amount actually paid by the qualified educational
			 institution to the wholesale, retail, or manufacturing business, as documented
			 by itemized receipts;
3.
			 "Financial incentive agreement" means an agreement between the Arkansas
			 Economic Development Commission and a taxpayer outlining the terms and
			 conditions of a tax credit awarded under these regulations;
4. "Machinery and equipment" means tangible
			 personal property used in connection with a qualified education program or a
			 qualified research program that has been approved for a tax credit under rules
			 prescribed by the Department of Finance and Administration;
5. "New" means the machinery and equipment
			 are state-of-the-art machinery and equipment that have:
i. Never been used except for normal testing
			 by the manufacturer to ensure that the machinery or equipment is of a proper
			 quality and in good working order; or
ii. Been used by the retailer or wholesaler
			 solely for the purpose of demonstrating the product to customers for
			 sale;
6. "Qualified
			 education program" means a program conducted by a qualified educational
			 institution under rules prescribed by the Division of Higher Education for
			 programs in colleges, universities, or junior colleges, by the Division of
			 Career and Technical Education for programs in vocational technical training
			 schools and by the Division of Elementary and Secondary Education for programs
			 in secondary schools, all of which programs are for the purpose of promoting
			 the use of new machinery and equipment for classroom, laboratory, and other
			 educational instruction;
7.
			 "Qualified educational institution" means:
i.
			 A public university, college, junior college, or vocational technical training
			 school located in and supported by the State of Arkansas;
ii. A private university, college, junior
			 college, or vocational technical training school located in Arkansas and
			 qualified for tax-exempt status under the Income Tax Act of 1929, §
			 26-51-101 et seq.; and
iii. A
			 public secondary school;
8. "Qualified research expenditures" means
			 the sum of any amounts that are paid or incurred by a taxpayer during the
			 taxable year in funding a qualified research program that has been approved for
			 tax credit treatment under rules promulgated by the Department of Finance and
			 Administration;
9. "Qualified
			 research program" means a program of applied or basic research undertaken by a
			 qualified educational institution that applies the findings of the research or
			 other existing knowledge toward discovering new scientific knowledge that has
			 specific commercial objectives with respect to new products, services,
			 processes, or methods;
10.
			 "Research park authority" means a public entity created under the Research Park
			 Authority Act, § 14-144-101 et seq., to provide facilities and support for
			 businesses engaged in research and development in pursuit of economic
			 development opportunities; and
11.
			 "State-of-the-art-machinery and equipment" means machinery and equipment that
			 are of the same type, design, and capability as like machinery and equipment
			 that are currently sold or manufactured by the donee for sale to customers.