Digital Production/Film Requirements
Prior to beginning preproduction activities in Arkansas, register with the film office and submit an application along with an estimate of expenditures; meet the minimum spending requirement of at least $50,000 within a six-month period in connection with a postproduction project or $200,000 within a six-month period in connection with the production of one project; and apply for a production rebate certificate no later than 180 days after the last production expenses are incurred.
Qualified Spend: Includes costs incurred in Arkansas in the development, preproduction, production or postproduction of a qualified production; the first $500,000 of wages or salaries paid to each resident and nonresident that are subject to Arkansas income taxes; pension, health and welfare contributions; and stipends and living allowances. Payments for production and post-production expenses are recommended (but not required) to be made from the checking account of an Arkansas institution. Cash payments to vendors may not exceed 40% of the total verifiable costs.
Summary: Each project submitted for funding under this program is evaluated on a case-by-case basis. An eligible production company may earn a 20% rebate on all qualified production expenditures in Arkansas. Salaries and wages paid to resident and nonresident above-the-line employees, as well as resident and nonresident below-the-line employees, will qualify for the 20% rebate and an additional 10% may be earned on the payroll of below-the-line employees who are full-time Arkansas residents for a total rebate of 30% on such wages. Below-the-line does not include directors and producers but for purposes of the additional 10%, resident actors and writers are defined as below-the-line. The incentive program is scheduled to sunset on June 30, 2029.
For more information on this particular incentive, please contact Christopher Crane, Arkansas Film Commissioner, at (501) 682-7676 or [email protected].
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.