Arkansas has an abundance of resources to help food processing companies succeed. The Arkansas Economic Development Commission works directly with food processing companies looking to start-up, expand or relocate. In addition, we assist companies with finding the best incentives so companies are able to make money quickly and efficiently.

There were 522 food and beverage companies in Arkansas at the end of 2022. These companies employed 55,130 people. Arkansas is home to Tyson Foods and numerous other food processing facilities, including Nestle, JBS USA, Kraft Heinz, Mars Inc., Cargill Inc., Hormel Foods Corp, Riceland Foods, Pilgrim’s Pride, ConAgra Brands Inc., Land O’ Frost and Frito-Lay, Inc.

Arkansas has the 5th largest percentage of food processing workers in the United States. The growth rate of the food and beverage industry from 2017 to 2022 was 6 percent in Arkansas.

The food processing industry is booming in Arkansas and continues to grow exponentially. Eight of the top 10 food and beverage companies by revenue in the world have manufacturing facilities in the state.

Arkansas is meeting the workforce needs for food processing companies. The state now has the second-largest number of food processing workers in the US and Arkansas has responded to industry growth by modernizing the workforce.

Arkansas Offers a Business-Friendly Tax Environment

November 01, 2017

When trying to decide where to locate (or relocate) your business, a state’s tax structure can tell you a lot about the business climate there. In Arkansas, we have a fair and pro-business tax system, bringing in companies from around the world who want to take advantage of those tax credits for their business.

Taxes are rarely simple, so we’ve done our best to bring you the top 10 ways Arkansas’s tax structure is friendly to new and existing businesses:

1. Arkansas’s corporate income tax is moderate, ranging from 1 percent to 6.5 percent of net income.

2. Arkansas offers competitive income tax exemptions for qualified manufacturers.

3. Businesses may be eligible for a one-percentage point refund on the 6.5 percent Arkansas sales and use tax for purchases of machinery and equipment

or replacement parts purchased to modify, replace or repair manufacturing machinery and equipment. Additional discretionary refunds are available through the Arkansas Economic Development Commission.

4. Arkansas manufacturers may take advantage of the reduced sales and use tax rate of 0.625 percent for energy (electricity and natural gas) used in the manufacturing process.

5. Businesses may claim certain exemptions from Arkansas sales and use taxes, listed here.

6. Businesses may apply to the Arkansas Department of Finance and Administration for a refund of city or county sales and use taxes.

7. A business with no previous employment record in Arkansas is taxed at 3.2 percent on the first $12,000 (starting January 1, 2018, the wage base will decrease to $10,000) of each employee’s earnings until an employment record is established, usually within three years. Existing Arkansas businesses pay an unemployment insurance tax rate between 0.1 percent and 14.0 percent, determined by past experience and the amount of the reserve-ratio.

8. The Capital Gains Tax Reduction (Act 1173 of 2015) allows for an exemption of 50 percent of net capital gains. The amount of net capital gain in excess of $10,000,000 from a gain realized on or after January 1, 2014, is exempt from the state income tax.

9. Real and personal property financed by revenue bonds and general obligation bonds may be exempt from local property taxes during the lease-amortization period in which a local government retains the title to a property. Payments by businesses to local governments in lieu of property taxes are generally encouraged and negotiated between the locality and the company.

10. Arkansas’s Freeport Law §26-26-1102 provides that all goods manufactured within the state and stored for shipment outside Arkansas shall not be assessed for taxation in the state. Also covered in this tax exemption are goods moving through the state that may be stored in a warehouse, dock, etc., which are in transit to a destination outside of Arkansas.