The Consolidated Incentive Act 182 of 2003, as amended by Act 1596 of 2007, provides for income tax credits for businesses deemed by the Arkansas Economic Development Commission to fit within the six (6) business sectors classified as “targeted businesses” may enter into a financial incentive agreement for income tax credits based on qualified research and development expenditures. An eligible business may be approved for an income tax credit each year equal to 33% of the qualified research and development expenditures incurred each year for the first five (5) years of the financial incentive agreement. As with the job creation income tax credits for targeted businesses, the income tax credit for research and development earned by targeted businesses may be sold. The business must make application to the AEDC within one year of issuance. The credits can only be sold one time. Any unused credits may be carried forward for a maximum of 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 by Targeted Business Income Tax Credit Program, contact Arkansas Economic Development at (501) 682-1121 or visit their website at http://arkansasedc.com/