AEDC Proposes Updates to Consolidated Incentives Rules

The Arkansas Economic Development Commission has proposed a number of revisions to its Consolidated Incentives Act rules. These lengthy proposed changes generally implement the numerous changes made by Act 327 of 2019, which was a once-in-a-decade updating of the Consolidated Incentives Act of 2003, Ark. Code Ann. §§ § 15-4-2701 et seq. Businesses considering economic development projects should be careful that they understand and are following the updated law. In many cases the changes slightly expanded the incentives, but in some areas requirements were tightened (Tax Back, R&D credits). [More]

DFA Updated COVID-19 FAQ Advises Taxability of Arkansas Ready for Business Grants

The Arkansas Department of Finance and Administration (DFA) has updated its "Frequently Asked Questions Regarding the Impact of Coronavirus (COVID-19)" (rev. Sept. 18, 2020) to specify that receipt of an Arkansas Ready for Business grant is taxable income for Arkansas income tax purposes that generally will be offset by expense deductions for purchases under the program. This guidance seems correct given the legal framework of Arkansas income tax, although it conceivably could be changed by legislation in the upcoming legislative session. (And regardless of what the Arkansas General Assembly does, it would also seem to be required for federal income tax purposes.) [More]

Final AEDC Rules Provide Path for Tax Credit for Donations for Equipment for Higher Education

Arkansas's longstanding donation of equipment tax credit program to encourage partnerships between industry and higher education was substantially expanded in the 2019 session to allow the credit for cash donations instead of only in-kind donations. Effective June 29, 2020, the Arkansas Economic Development Commission has promulgated rules for the program, which is fully operational. Businesses that collaborate with state community colleges or universities for training or research should leverage this program to generate income tax credits equal to 33% of the contribution. [More]

Get Ready for Round 2 of Arkansas Ready for Business Grants!

Arkansas businesses that did not previously apply should get ready today to apply quickly tomorrow, May 5, for Arkansas Ready for Business grants. These are $1,000-per-employee grants that can be used for PPE, disinfection deep cleaning, and other health and safety equipment or services related to opening or operating a business during the coronavirus epidemic (see our prior post for details). Very small (50 employees or under) or women/minority-owned businesses should especially consider applying because of funding set-asides. Applications may continue to be first-come first-served, so businesses should apply as soon at the application system opens tomorrow, May 5. (We will update this post as additional details become available.) [More]