The Consolidated Incentive Act 182 of 2003, as amended by Act 1596 of 2007, authorizes an income tax credit to eligible businesses that conduct “in-house” research within a research facility that is operated by the eligible business. Prior to July 31, 2007, the credit allowed for approved in-house research is 10% of qualified expenditures. However, the maximum credit that can be earned by each qualified business shall not exceed $10,000 per tax year.
Effective July 31, 2007 Act 1596 of 2007 provides that new or existing eligible businesses that conduct in-house research in a research facility operated by the business and that qualify for federal research and development tax credits may qualify for an income tax credit equal to twenty-percent (20%). The income tax credit may be used to offset one hundred percent (100%) of an eligible business's annual income tax liability. Unused credits may be carried forward for a period not to exceed nine (9) years.
To claim the credits authorized, attach to the tax return a copy of the Certificate of Tax Credit issued by the Arkansas Science and Technology Authority.
For information regarding application into the In-House Research Income Tax Credit Program, contact Arkansas Economic Development at (501) 682-1121 or visit their website at http://arkansasedc.com/