Incentives

Job Creation Incentives

Advantage Arkansas
(Income Tax Credit)

Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project.

Tier
Payroll Threshold
Benefit Based on Payroll
of New, Full-time,
Permanent Employees
1
$125,000
1% of payroll
2
$100,000
2% of payroll
3
$75,000
3% of payroll
4
$50,000
4% of payroll
( See Tier Map)

 

In all tiers, in order to qualify for the Advantage Arkansas program, the proposed average hourly wage of the new employees hired as a result of the project must be equal to or greater than the lowest county average hourly wage.  Currently, the average hourly wage threshold for the Advantage Arkansas program is $10.13.

The payroll threshold for qualifying for Advantage Arkansas and the benefit received depends on the tier in which the business locates or expands. 

Arkansas's counties are ranked into four tiers based on poverty rate, population growth, per capita income and unemployment rate. ( See Tier Map)

The Advantage Arkansas income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than 50 percent of a business' income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.

An application for the Advantage Arkansas program may be obtained by contacting AEDC's Business Development Division at (501) 682-7675.

Eligibility
The Advantage Arkansas incentive is available for non-retail businesses engaged in commerce for profit that fall into one or more of the following categories:

  • Manufacturers in NAICS codes 31-33
  • Businesses primarily engaged in the design and development of prepackaged software, digital content production and preservation, computer processing, data preparation services or information retrieval services. Eligible computer-related businesses must derive at least 75% of their revenue from out-of-state sales
  • Businesses primarily engaged in motion picture production that derive at least 75% of their revenue from out-of-state sales
  • Distribution centers, including e-commerce distributors, that derive at least 75% of their revenue from out-of-state sales
  • Office sector businesses that derive at least 75% of their revenue from out-of-state sales
  • National or regional corporate headquarters as classified in the NAICS code 551114
  • Firms primarily engaged in commercial, physical and biological research as classified in the NAICS code 541710
  • Scientific and technical services businesses. The firms must derive at least 75% of their revenue from out-of-state sales. The average hourly wage paid by these businesses must exceed 150% of the county or state average hourly wage, whichever is less.

If you have any questions concerning the Advantage Arkansas Program, please call Michael Almond at the Arkansas Economic Development Commission at 1-800-ARKANSAS or 501-682-5277.