Jonesboro is a pro-business community that partners with the State of Arkansas to provide direct assistance to expanding and new companies. For assistance with your custom incentive proposal, please contact us at (870) 336-9064 or Email Mark Young
The following highlights job and investment incentives provided by the Arkansas Economic Development Commission. Eligibility requirements and other information are available at the Arkansas Economic Development Commission website. Additional incentives may be available to qualifying companies through various economic development entities.
The Advantage Arkansas incentive offers a state income tax credit for job creation. The incentive is based on a company's payroll of new, full-time, permanent employees hired as a result of the project. To quality for the Advantage Arkansas program (all tiers), the company's proposed average 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. The average hourly wage threshold for the Advantage Arkansas program is currently $11.05.
This credit cannot offset more than 50 percent of a business’ income tax liability in any one year. It can be carried forward for nine years beyond the tax year in which the credit was first earned. The employees included in the added payroll for the project are required to be Arkansas taxpayers and the credit begins in the tax year that the new employees are hired. This income tax credit is earned each tax year for a period of five years.
The Tax Back incentive provides sales and use tax refunds on a qualifying business' purchase of building materials and taxable machinery and equipment. Qualifying businesses must invest at least $100,000 and either 1) sign a job creation agreement under the Advantage Arkansas or Create Rebate programs within twenty-four (24) months of signing the Tax Back agreement or 2) have met the requirements of an Advantage Arkansas or Create Rebate agreement within the previous 48 months. An endorsement resolution from a local governing authority authorizing the refund of its local taxes must also be obtained by applicants. Qualification criteria must be met under the requisite Advantage Arkansas or Create Rebate program in which the applicant is participating, and must be approved by the Arkansas Economic Development Commission.
The refund of sales and use taxes will 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; which totals one percent. The state tax rate is 6.5 percent so the eligible refund would be 5.5 percent. Criteria for eligibility can be found at the Arkansas Economic Development Commission website.
Create Rebate incentives are negotiated and offered at the discretion of the Executive Director of the Arkansas Economic Development Commission. The Create Rebate program provides annual cash payments based on a company’s annual payroll for new, full-time, permanent employees. In order to qualify, a company must create a minimum of $2 million annually in new payroll. The minimum payroll 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. Create Rebate benefits are available after the business certifies to the Arkansas Department of Finance & Administration (ADFA) that it has fulfilled the minimum payroll requirements and the reported payroll has been verified. The percentage of the benefit depends on the tier assignment of the county where the job creation occurs.
The ArkPlus incentive is a state income tax credit program that provides tax credits of ten percent (10%) of the total investment in a new location or expansion project. This discretionary incentive is offered in highly competitive situations. 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. Total project expenditures must be incurred within four (4) years of the date the project is approved by the Arkansas Economic Development Commission. 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 fifty percent (50%) of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine (9) years beyond the tax year in which the credit was first earned.
The Arkansas Economic Development Commission shares the cost of project infrastructure needs by committing grants from state and federal infrastructure funds. The amount of assistance committed is dependent upon the strength of the company, number of jobs, average wage, project investment and costs associated with facility/site improvements. Criteria for eligibility can be found at the Arkansas Economic Development Commission website.
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/credits issued under this program are equal to 33 1/3% of the amount invested by an investor in an eligible business. The income tax credit earned may be used to offset 50% of the investor’s Arkansas income tax liability in any one tax year. Any unused credit may be carried forward for a period of nine years. The income tax credit earned may be sold upon approval by the Arkansas Economic Development Commission.
Arkansas’s 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% of a business’ tax liability in a given year.