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1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 HOUSE BILL 1922
4
5 By: Representative Maddox
6 By: Senator J. Dismang
7
8 For An Act To Be Entitled
9 AN ACT TO AMEND THE CONSOLIDATED INCENTIVE ACT OF
10 2003; TO CREATE AN INCOME TAX CREDIT FOR RELOCATING
11 CORPORATE HEADQUARTERS TO THIS STATE; TO ENCOURAGE
12 CORPORATIONS TO RELOCATE TO ARKANSAS; AND FOR OTHER
13 PURPOSES.
14
15
16 Subtitle
17 TO AMEND THE CONSOLIDATED INCENTIVE ACT
18 OF 2003; TO CREATE AN INCOME TAX CREDIT
19 FOR RELOCATING CORPORATE HEADQUARTERS TO
20 THIS STATE; AND TO ENCOURAGE
21 CORPORATIONS TO RELOCATE TO ARKANSAS.
22
23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
24
25 SECTION 1. Arkansas Code � 15-4-2706(b), concerning investment tax
26 incentives under the Consolidated Incentive Act of 2003, is amended to read
27 as follows:
28 (b)(1)(A) The award of incentives under this section are at the
29 discretion of the Director of the Arkansas Economic Development Commission.
30 (B) The director may offer a tax credit of up to ten
31 percent (10%) under this subsection.
32 (2) If offered, an application for an income tax credit or a
33 sales and use tax credit under this section shall be submitted to the
34 Arkansas Economic Development Commission.
35 (3) Eligibility for incentives under this subsection and
36 subsections (c)�(e) of this section is dependent upon the tier in which the
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1 project is located, as follows:
2 (A) For tier 1 counties, the business shall invest five
3 million dollars ($5,000,000) or more and have an annual payroll for new full-
4 time permanent employees in excess of two million dollars ($2,000,000);
5 (B) For tier 2 counties, the business shall invest three
6 million seven hundred fifty thousand dollars ($3,750,000) or more and have an
7 annual payroll for new full-time permanent employees in excess of one million
8 five hundred thousand dollars ($1,500,000);
9 (C) For tier 3 counties, the business shall invest three
10 million dollars ($3,000,000) or more and have an annual payroll for new full-
11 time permanent employees in excess of one million two hundred thousand
12 dollars ($1,200,000); and
13 (D) For tier 4 counties, the business shall invest two
14 million dollars ($2,000,000) or more and have an annual payroll for new full-
15 time permanent employees in excess of eight hundred thousand dollars
16 ($800,000).
17 (4)(A) An approved financial incentive agreement shall be
18 transmitted to the qualified business and the Department of Finance and
19 Administration.
20 (B) Before the commission approves a financial incentive
21 agreement under this subsection, the qualified business shall elect to
22 receive the tax credits allowed under this subsection as:
23 (i) Sales and use tax credits; or
24 (ii) Income tax credits.
25 (5) A qualified business shall reach the investment threshold
26 within four (4) years from the date of the approved financial incentive
27 agreement, except for lease payments authorized by subdivision (b)(6)(D) of
28 this section or subdivision (c)(6) of this section.
29 (6)(A)(i) After receiving an approved financial incentive
30 agreement from the commission, a qualified business shall certify to the
31 department the eligible project costs annually at the end of each calendar
32 year for the term of the financial incentive agreement.
33 (ii) The department shall authorize an income tax
34 credit or a sales and use tax credit of up to ten percent (10%) of total
35 audited eligible project costs.
36 (B) The amount of the income tax credit or sales and use
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1 tax credit authorized under subdivision (a)(6)(A)(ii) (b)(6)(A)(ii) of this
2 section may offset up to fifty percent (50%) of a qualified business's income
3 tax or sales and use tax liability annually.
4 (C) Unused tax credits under this subdivision (b)(6) may
5 be carried forward for up to nine (9) years after the year in which the
6 credit was first earned or until the tax credits are exhausted, whichever
7 occurs first.
8 (D) A qualified business that enters into a lease for a
9 building or equipment for a period of at least five (5) years may count the
10 lease payments for the first five (5) years as a qualifying expenditure for
11 the investment threshold required for this investment incentive.
12 (7) Technology-based enterprises, as defined by � 14-164-203,
13 may earn, at the discretion of the director, an income tax credit or sales
14 and use tax credit based on new investment, provided that the technology-
15 based enterprise:
16 (A) Creates a new payroll of at least two hundred fifty
17 thousand dollars ($250,000); and
18 (B) Pays an average hourly wage that is at least one
19 hundred fifty percent (150%) of the lesser of the state or county average
20 hourly wage for the county in which the business locates or expands.
21 (8)(A) The income tax credit or sales and use tax credit that
22 may be earned by a technology-based enterprise is based on the amount of
23 investment as follows:
24 (i) The income tax credit or sales and use tax
25 credit is equal to two percent (2%) of the investment for an investment that
26 is between two hundred fifty thousand dollars ($250,000) and five hundred
27 thousand dollars ($500,000);
28 (ii) The income tax credit or sales and use tax
29 credit is equal to four percent (4%) of the investment for that part of the
30 investment that is over five hundred thousand dollars ($500,000) and less
31 than one million dollars ($1,000,000);
32 (iii) The income tax credit or sales and use tax
33 credit is equal to six percent (6%) of the investment for that part of the
34 investment that is over one million dollars ($1,000,000) and less than two
35 million dollars ($2,000,000); and
36 (iv) The income tax credit or sales and use tax
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1 credit is equal to eight percent (8%) of the investment for that part of the
2 investment that is over two million dollars ($2,000,000).
3 (B) The amount of credit earned is determined based upon
4 the amount invested, as verified by an audit by the department.
5 (9) All investments by a technology-based enterprise shall be
6 made within four (4) years of the date of the approved financial incentive
7 agreement.
8 (10) Prior to commission approval of a financial incentive
9 agreement, the business shall elect to receive the tax credits as either:
10 (A) A sales and use tax credit; or
11 (B) An income tax credit.
12 (11) The income tax credit or sales and use tax credit earned by
13 a technology-based enterprise may offset income tax liabilities or sales and
14 use tax liabilities as follows:
15 (A) A technology-based enterprise that pays at least one
16 hundred fifty percent (150%) of the lesser of the state or county average
17 hourly wage for the county in which the business locates or expands may
18 offset up to fifty percent (50%) of its income tax liability or sales and use
19 tax liability annually;
20 (B) A technology-based enterprise that pays at least one
21 hundred seventy-five percent (175%) of the lesser of the state or county
22 average hourly wage for the county in which the business locates or expands
23 may offset up to seventy-five percent (75%) of its income tax liability or
24 sales and use tax liability annually; and
25 (C) A technology-based enterprise that pays at least two
26 hundred percent (200%) of the lesser of the state or county average hourly
27 wage for the county in which the business locates or expands may offset up to
28 one hundred percent (100%) of its income tax liability or sales and use tax
29 liability annually.
30 (12) After receiving an approved financial incentive agreement
31 from the commission, a qualified business shall certify to the department the
32 eligible project costs and average hourly wages annually at the end of each
33 tax year for the term of the financial incentive agreement.
34 (13) Unused income tax credits or sales and use tax credits may
35 be carried forward for up to nine (9) years after the year in which the
36 credit was first earned or until the tax credits are exhausted, whichever
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1 occurs first.
2
3 SECTION 2. Arkansas Code � 15-4-2706, concerning investment tax
4 incentives under the Consolidated Incentive Act of 2003, is amended to add an
5 additional subsection to read as follows:
6 (f)(1) The director may award an eligible business with a corporate
7 headquarters relocating to this state an income tax credit of up to fifty
8 percent (50%) of the payroll for the new full-time permanent employees of a
9 corporate headquarters relocating to this state.
10 (2) An eligible business shall receive a positive cost-benefit
11 analysis from the commission for the corporate headquarters relocating to
12 this state before being offered a financial incentive agreement under this
13 subsection.
14 (3) Eligibility for incentives under this subsection is
15 dependent upon the tier of the county in which the corporate headquarters is
16 relocating, as follows:
17 (A) For tier 1 counties, the eligible business shall
18 create at least three hundred (300) new full-time permanent employees with an
19 average hourly wage that exceeds the lesser of one hundred fifty percent
20 (150%) of the county or state average hourly wage for the county to which the
21 corporate headquarters is relocating;
22 (B) For tier 2 counties, the eligible business shall
23 create at least two hundred fifty (250) new full-time permanent employees
24 with an average hourly wage that exceeds the lesser of one hundred twenty-
25 five percent (125%) of the county or state average hourly wage for the county
26 to which the corporate headquarters is relocating;
27 (C) For tier 3 counties, the eligible business shall
28 create at least two hundred (200) new full-time permanent employees with an
29 average hourly wage that exceeds the lesser of one hundred fifteen percent
30 (115%) of the county or state average hourly wage for the county to which the
31 corporate headquarters is relocating; and
32 (D) For tier 4 counties, the eligible business shall
33 create at least one hundred fifty (150) new full-time permanent employees
34 with an average hourly wage that exceeds the lesser of one hundred ten
35 percent (110%) of the county or state average hourly wage for the county to
36 which the corporate headquarters is relocating.
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1 (4)(A) At the end of the calendar year in which a qualified
2 business executes an approved financial incentive agreement under this
3 subsection and at the end of each subsequent calendar year for the term of
4 the financial incentive agreement, the qualified business shall certify, on a
5 form provided by the department, the requisite payroll and number of new
6 full-time permanent employees related to the relocated corporate headquarters
7 during the preceding calendar year.
8 (B)(i) Upon receipt of the certification form required
9 under subdivision (f)(4)(A) of this section, the Revenue Division of the
10 Department of Finance and Administration shall audit and verify the
11 certification form.
12 (ii) After the audit and verification required under
13 subdivision (f)(4)(B)(i) of this section, the department shall determine the
14 amount of the income tax credit earned by the qualified business for the
15 preceding calendar year and issue an income tax credit to the qualified
16 business to be applied against the qualified business's income tax liability.
17 (5) The amount of the income tax credit allowed under this
18 subsection that may offset a qualified business's income tax liability is as
19 follows:
20 (A) For the first five years (5) from the year following
21 the date of the execution of the financial incentive agreement, up to one
22 hundred percent (100%) of the qualified business's income tax liability
23 resulting from the relocation of the corporate headquarters may be offset by
24 the income tax credit allowed under this subsection;
25 (B) For the sixth year from the year following the date of
26 the execution of the financial incentive agreement, up to eighty percent
27 (80%) of the qualified business's income tax liability resulting from the
28 relocation of the corporate headquarters may be offset by the income tax
29 credit allowed under this subsection;
30 (C) For the seventh year from the year following the date
31 of the execution of the financial incentive agreement, up to sixty percent
32 (60%) of the qualified business's income tax liability resulting from the
33 relocation of the corporate headquarters may be offset by the income tax
34 credit allowed under this subsection;
35 (D) For the eighth year from the year following the date
36 of the execution of the financial incentive agreement, up to forty percent
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1 (40%) of the qualified business's income tax liability resulting from the
2 relocation of the corporate headquarters may be offset by the income tax
3 credit allowed under this subsection;
4 (E) For the ninth year from the year following the date of
5 the execution of the financial incentive agreement, up to twenty percent
6 (20%) of the qualified business's income tax liability resulting from the
7 relocation of the corporate headquarters may be offset by the income tax
8 credit allowed under this subsection; and
9 (F) For the tenth and subsequent years following the date
10 of the execution of the financial incentive agreement, the qualified
11 business's income tax liability resulting from the relocation of the
12 corporate headquarters shall not be offset by the income tax credit allowed
13 under this subsection.
14 (6) Unused income tax credits authorized under this subsection
15 shall not carry forward to subsequent tax years.
16 (7) The income tax credits allowed under this subsection shall
17 not be sold or transferred.
18 (8) The employment and payroll requirements provided for in this
19 subsection shall be met within four (4) years of the date of the approved
20 financial incentive agreement for the qualified business.
21
22 SECTION 3. Arkansas Code � 15-4-2711(g)(1), concerning the
23 administration of the Consolidated Incentive Act of 2003, is amended to read
24 as follows:
25 (g)(1) If Except as provided in � 15-4-2706(f)(8), if the annual
26 payroll of the business applying for incentives under this subchapter is not
27 met within two (2) years after signing the financial incentive agreement, the
28 business may request in writing an extension of time to reach the required
29 payroll threshold.
30
31 SECTION 4. Arkansas Code � 15-4-2711, concerning administration of the
32 Consolidated Incentive Act of 2003, is amended to add additional subsections
33 to read as follows:
34 (s) Failure to annually certify or recertify payroll figures and claim
35 the earned tax credits outlined in � 15-4-2706(b) and � 15-4-2706(f) shall
36 result in:
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1 (1) A ten-percent reduction of the earned tax credit if not
2 claimed within twelve (12) months of the end of the tax year in which the tax
3 credit was earned;
4 (2) A one-hundred-percent forfeiture of the earned tax credit if
5 not claimed within twenty-four (24) months of the end of the tax year in
6 which the tax credit was earned; or
7 (3) Termination of the financial incentive agreement if an
8 initial certification of payroll figures has not been filed with the
9 department within four (4) years after the date of the approved financial
10 incentive agreement, unless the date has been extended by the director.
11 (t)(1) If the annual payroll of a qualified business receiving
12 incentives under � 15-4-2706(b) or � 15-4-2706(f) falls below the payroll
13 threshold to be eligible for the incentive in a year subsequent to the year
14 in which the qualified business initially qualified for the incentive, the
15 incentives outlined in the financial incentive agreement for the qualified
16 business shall be terminated unless:
17 (A) The qualified business files with the Arkansas
18 Economic Development Commission a written application for an extension of the
19 incentives explaining why the qualified business's payroll has fallen below
20 the level required to be eligible for the incentive; and
21 (B) The written application filed by the qualified
22 business under subdivision (t)(1)(A) of this section is approved by the
23 Arkansas Economic Development Commission.
24 (2) The director and the secretary may:
25 (A) Approve an application for an extension of time that
26 was filed under subdivision (t)(1) of this section for a period not to exceed
27 two (2) years for a qualified business to bring the payroll of the qualified
28 business back up to the requisite threshold amount; and
29 (B) Approve the continuation of incentives during the
30 period of the extension granted under subdivision (t)(2)(A) of this section.
31 (3)(A) If a qualified business fails to reach the requisite
32 payroll threshold before the expiration of the period of the extension
33 granted under subdivision (t)(2)(A) of this section, the qualified business
34 is liable for the repayment of all incentives previously received by the
35 qualified business that were conditioned on the approved financial incentive
36 agreement for which the payroll threshold has not been met.
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1 (B) If a qualified business fails to reach the payroll
2 threshold required under an approved financial incentive agreement, the
3 department has two (2) years to collect incentives previously received by the
4 qualified business or file a lawsuit to enforce the repayment provisions.
5
6 SECTION 5. Arkansas Code � 15-4-2712(b)(2), concerning restrictions on
7 the combination of certain incentives authorized under the Consolidated
8 Incentive Act of 2003, is amended to read as follows:
9 (2) The following incentives for targeted businesses may be
10 combined with each other for the same project as long as multiple incentives
11 are not claimed for the same expenditures but shall not be combined with any
12 other incentives authorized in this subchapter during the period in which the
13 qualified business receives incentives under this subchapter:
14 (A) The investment tax credit authorized under � 15-4-
15 2706(b)(7) may be combined with:
16 (i) The research and development income tax credits
17 authorized under � 15-4-2708(b); and
18 (ii) Either the:
19 (a) Payroll rebate program authorized under �
20 15-4-2707(e); or
21 (b) Payroll tax credit program authorized
22 under � 15-4-2709;
23 (B) The sales and use tax refund authorized under � 15-4-
24 2706(e) may be combined with:
25 (i) The research and development income tax credits
26 authorized under � 15-4-2708(b); and
27 (ii) Either the:
28 (a) Payroll rebate program authorized under �
29 15-4-2707(e); or
30 (b) Payroll tax credit program authorized
31 under � 15-4-2709;
32 (C)(B) The payroll rebate program authorized under � 15-4-
33 2707(e) may be combined with:
34 (i) The research and development income tax credits
35 authorized under � 15-4-2708(b); and
36 (ii) Either the:
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1 (a) Investment tax credit program authorized
2 under � 15-4-2706(b)(7); or
3 (b) Sales The sales and use tax refund program
4 authorized under � 15-4-2706(e);
5 (D)(C) The payroll income tax credit authorized under �
6 15-4-2709 may be combined with:
7 (i) The research and development income tax credits
8 authorized under � 15-4-2708(b); and
9 (ii) Either the:
10 (a) Investment tax credit authorized under �
11 15-4-2706(b)(7); or
12 (b) Sales The sales and use tax refund program
13 authorized under � 15-4-2706(e); and
14 (E)(D) The research and development income tax credits
15 authorized under � 15-4-2708(b) may be combined with:
16 (i) Either the:
17 (a) Payroll rebate program authorized under �
18 15-4-2707(e); or
19 (b) Payroll tax credit program authorized
20 under � 15-4-2709; and
21 (ii) Either the:
22 (a) Investment tax credit program authorized
23 under � 15-4-2706(b)(7); or
24 (b) Sales The sales and use tax refund program
25 authorized under � 15-4-2706(e).
26
27 SECTION 6. EFFECTIVE DATE. Sections 1�5 of this act are effective for
28 tax years beginning on or after January 1, 2026.
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