Court Opinion

ID: 3264078
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:33:57.344315+00
Date Added: 2024-06-11T13:03:07.545543
License: Public Domain

The Honorable Ralph (Buddy) Blair, Jr. State Representative P O Box 5154 Fort Smith, AR 72913
Dear Representative Blair:
This is in response to your request for an opinion concerning the Arkansas Enterprise Zone Act.  Specifically, you inquire as to whether a 130,000 square foot retail shopping center can be located on ten acres of a designated enterprise zone area in Fort Smith, Arkansas.
The relevant law is Act 462 of 1989, codified as Ark. Code Ann.15-4-801 et seq., which amended the prior Arkansas Enterprise Zone Acts 740 and 813 of 1983, codified as Ark. Code Ann. 15-4-801 et. seq.  The 1983 law basically provided that the Department of Industrial Development had the authority to declare certain areas "enterprise zones."  Once an area had this particular designation, the businesses that located in the area were entitled to certain sales, use and income tax credits as specifically set forth in the statutes,.  There was apparently no limitation on the type of business that was allowed to obtain these credits provided that it met the criteria set forth in the statute.  That is, there was no prohibition of any business simply due to the fact of the type of business that it was engaged in.
Conversely, the 1989 statutes limit the type of business that are allowed to obtain these tax credits under the Enterprise Zone Act. The 1989 Act limits participation to manufacturing companies, computer businesses, and major distribution centers that do not sell directly to the public.  The Act in no way prohibits the locating of any type of business, but it does limit the type of business entitled to receive the tax credits.  To compare the old and new statutes, see Ark. Code Ann. 15-4-807 (1983) and 15-4-807 (1989).
The major change from the 1983 to the 1989 statute is that the 1989 statute requires that only certain businesses be given the tax credits.  These are listed in 15-4-807(b)(1)(A)(1989) wherein the entity must be a qualified industry business that fits into Standard Industrial Classification (SIC) numbers 20 through 39, 7375, or 7376, or is a distribution center located in Arkansas. Basically, the SIC 20 through 39 are different types of manufacturing businesses and 7375 and 7376 are computer-type businesses.  Consequently, retail shopping centers would, in my opinion, be excluded from participation in the tax credit incentives found in the 1989 Act.  This, as stated, does not mean that the retail shopping center cannot be located within the enterprise zone as you inquired of in your letter to this office. It does mean that the retail shopping center would not be eligible for any of the tax credits available for approved businesses located in the enterprise zone.
The foregoing opinion, which I hereby approve, was prepared by Assistant Attorney General Stacy M. VanAusdall.