Tourism Development Incentives
The Arkansas Tourism Development Act provides state sales and tax credits and income tax credits to businesses initiating approved tourism attraction projects.
Sales tax credits shall be determined in accordance with the following criteria:
- Eligible minimum project costs must be $1 million, except in high unemployment counties,* where it is $500,000.
- The sales tax credits are calculated based upon 15% of eligible project cost for projects spending more than $1 million; credits are 25% of eligible project cost for the projects in high unemployment counties.*
- The sales tax credit may be applied against the business's increased sales tax liability that results from the project.
- Other review criteria may be requested by AEDC to determine whether the tourism attraction project meets the intent of the Act.
Additionally, eligible businesses may receive a state income tax credit equal to 4% of the annual payroll of new, full-time, permanent employees.
The income tax credits begin in the year in which the new employees are hired. Any unused portion of the credit may be carried forward against corporate income tax for the succeeding nine years.
Daycare Facility Incentive
The Arkansas Economic Development Commission administers the Daycare Facility Act Incentive Program that allows an eligible business a sales and use tax refund and income tax credit for the initial construction and operating of childcare facilities for their employees. The facility must be licensed and certified by the Division of Child Care and Early Childhood Education.
Sales and Use Tax Refund
An eligible business may obtain a refund of state sales and use taxes paid on the purchase of construction materials and furnishings used in the initial construction and equipping of a childcare facility.
Income Tax Credit
An eligible business is allowed:
1) An income tax credit of 3.9% of the annual salary of its employees employed exclusively in providing childcare service, or
2) A $5,000 income tax credit for the first tax year the business provides its employees with a childcare facility.
The credit is first available for use in the taxable year following the year the business makes payment of wages to childcare workers. Unused credits may be carried forward for two years.
For more information on the Daycare Facility Incentive, please contact the Business Development Team at 501-682-1121.