Incentives

Investment Incentives

Tax Back (Sales and Use Tax Refund)

Advantage Arkansas participants investing at least $100,000 are eligible for the Tax Back program. This program provides a refund of sales and use taxes for building materials and taxable machinery and equipment associated with the approved project.

The business must sign a job-creation agreement under the Advantage Arkansas program within 24 months of signing the Tax Back agreement.

Applicants for Tax Back must obtain an endorsement resolution from the local governing authority that authorizes the refund of its local taxes. Applicants must meet the same qualification criteria as Advantage Arkansas and must be approved by the Arkansas Economic Development Commission.


Eligibility
The Tax Back incentive is available for non-retail businesses engaged in commerce for profit that fall into one or more of the following categories:

  • Manufacturers in NAICS codes 31-33
  • Businesses primarily engaged in the design and development of prepackaged software, digital content production and preservation, computer processing, data preparation services or information retrieval services. Eligible computer-related businesses must derive at least 75 percent of their revenue from out-of-state sales
  • Businesses primarily engaged in motion picture production that derive at least 75% of their revenue from out-of-state sales
  • Distribution centers, including e-commerce distributors, that derive at least 75% of their revenue from out-of-state sales
  • Office sector businesses that derive at least 75% of their revenue from out-of-state sales
  • National or regional corporate headquarters as classified in the NAICS code 551114
  • Firms primarily engaged in commercial, physical and biological research as classified in the NAICS code 541710
  • Scientific and technical services businesses. The firms must derive at least 75% of their revenue from out-of-state sales. The average hourly wage paid by these businesses must exceed 150% of the county or state average hourly wage, whichever is less.

If you have any questions concerning the Tax Back Program, please call Michael Almond at the Arkansas Economic Development Commission at 1-800-ARKANSAS or 501-682-5277.

 

InvestArk (Sales and Use Tax Credit)

InvestArk is a sales and use tax credit program available to businesses established in Arkansas for at least two years that invest $5 million or more in plant or equipment for new construction, expansion or modernization. 

The business must be approved for the program prior to beginning construction or incurring eligible project costs. The business must obtain a direct-pay sales and use tax permit from the State of Arkansas. All project expenditures must be incurred within four (4) years of the project eligibility date. All projects will be audited upon completion to confirm the tax credits.

The sales and use tax credit earned under the InvestArk program is based upon a percentage of eligible project cost. The percentage of credit that may be authorized is equal to ½% above the state sales and use tax rate in effect at the time a financial incentive agreement is signed.  Currently the percentage that may be earned as credit is 6.5% of eligible project expenditures.

The credit may be used to offset up to 50% of the business' sales and use tax liability on taxable purchases. The credit is earned in the year the eligible expenditure is made and can be applied against the business's state direct-pay sales and use tax liability in the year following the year of expenditure. If the entire credit cannot be used, the remainder may be carried forward for five (5) years.

An application for the InvestArk program may be obtained by contacting AEDC's Business Development Division at (501) 682-7675.


Eligibility
The InvestArk Arkansas incentive is available for non-retail businesses engaged in commerce for profit that fall into one or more of the following categories:

  • Manufacturers in NAICS codes 31-33
  • Businesses primarily engaged in the design and development of prepackaged software, digital content production and preservation, computer processing, data preparation services or information retrieval services. Eligible computer-related businesses must derive at least 75% of their revenue from out-of-state sales
  • Businesses primarily engaged in motion picture production that derive at least 75% of their revenue from out-of-state sales
  • Distribution centers, including e-commerce distributors, that derive at least 75% of their revenue from out-of-state sales
  • Office sector businesses that derive at least 75% of their revenue from out-of-state sales
  • National or regional corporate headquarters as classified in the NAICS code 551114
  • Firms primarily engaged in commercial, physical and biological research as classified in the NAICS code 541710
  • Scientific and technical services businesses. The firms must derive at least 75% of their revenue from out-of-state sales. The average hourly wage paid by these businesses must exceed 150% of the county or state average hourly wage, whichever is less.

If you have any questions concerning the InvestArk Program, please call Michael Almond at the Arkansas Economic Development Commission at 1-800-ARKANSAS or 501-682-5277.