Business Incentives and Credits continued
Water Resource Conservation and Development Incentives (ACA §26-51-1001 et seq.)
Projects Approved January 1, 1996 and Later
Act 341 of 1995, as amended by Act 421 of 1997, Acts 765 and 1050 of 1999, Act 727 of 2001and Acts 563 and 875 of 2021 allows credits for taxable years beginning on or after January 1, 1996. An income tax credit equal to 50% of the cost of construction and installation or restoration of water impoundments or water control structures of twenty (20) acre feet or more designed for the purpose of storing water to be used primarily for agricultural, commercial, or industrial purposes. The amount of credit used for any taxable year may not exceed $18,000 per project and may be carried over for a maximum of fifteen (15) consecutive taxable years following the taxable year in which the credit originated.
There is also a tax credit equal to 25% for projects outside critical groundwater areas, and 50% for projects within critical groundwater areas, of the cost incurred for the reduction of ground water used by substitution of surface water for water used in industrial, commercial, agricultural, or recreational purposes. The amount of credit used for any taxable year may not exceed $18,000 per project and may be carried over for maximum of fifteen (15) consecutive taxable years following the taxable year in which the credit originated. Exception: Credits earned from a project for industrial or commercial purposes located in critical groundwater areas may be used in an amount up to $30,000 per project and increased to $200,000 effective with tax years beginning January 1, 1999. These credits may be carried over for a maximum of fifteen (15) consecutive taxable years.
Also available for taxable years beginning January 1, 1996 is a tax credit equal to 25% of the project cost incurred for agricultural land leveling to conserve irrigation water. The amount of credit used for any taxable year may not exceed $18,000 per project and may be carried over for a maximum of fifteen (15) consecutive taxable years following the taxable year in which the credit originated.
Any taxpayer taking part in these projects has five (5) years to complete the project to be eligible for the credit.
In determining net income for Arkansas income tax purposes, any taxpayer qualifying for the credits provided for in this Act shall also be entitled to a deduction in an amount equal to the total cost of the water project less the total amount of credits to which the taxpayer is entitled under this act.
To claim the credits authorized, attach a copy of the Certificate of Approval/Completion issued by the
Arkansas Natural Resources Commission.
For information regarding application for the Water Resource Conservation and Development Incentive, contact Arkansas Natural Resources Commission at (501) 682-3968 or visit their website at www.arnc.arkansas.gov.
Wetland/Riparian Zone Creation and Restoration Incentive (ACA §26-51-1501 et seq.)
Act 561 of 1995, as amended, created income tax credits for taxable years beginning on or after January 1, 1996 equal to the project cost incurred in the development or restoration of private wetlands and riparian zones. The amount of credit used for any taxable year may not exceed $5,000 and may be carried over for maximum of nine (9) consecutive taxable years following the taxable year in which the credit originated. The project must be maintained for a minimum life of ten (10) years after the project is completed. Act 351 of 2009 added a wetland and riparian zone conservation tax credit equal to fifty percent (50%) of the fair market value of qualified real property donated for a qualified conservation purpose to an eligible done.
To claim the credits authorized, attach to the tax return a copy of the Certificate of Tax Credit issued by the Arkansas Natural Resources Commission.
For information regarding application for the Wetland/Riparian Zone Creation and Restoration Incentive, contact Arkansas Natural Resources Commission at (501) 682-3968 or visit their website at www.arnc.arkansas.gov.
Youth Apprenticeship Program (ACA §26-51-509) Repealed by Act 1042 of 2017
Act 1103 of 1995 provides for an income tax credit of up to $2,000 for each qualified youth apprentice. To claim the benefits, a taxpayer must obtain a certification from the Bureau of Apprenticeship and Training of the U.S. Department of Labor. A taxpayer who trains a youth apprentice in a registered Youth Apprenticeship Program shall be entitled to a credit in the amount of $2,000 or 10% of the wages earned by the youth apprentice, whichever is less. The credit used for a taxable year may not exceed the individual or corporate income tax otherwise due in the year the credit was earned. Any unused credit may be carried over for a maximum of two (2) consecutive taxable years.
To claim the credits authorized, attach to the tax return a copy of the Certificate of Tax Credit issued by Tax Credits/Special Refunds Section.
Youth Apprenticeship/Work-Based Learning Program (ACA §26-51-1601 et seq.)
Act 1168 of 1997 provides for an income tax credit of up to $2,000 for each qualified youth apprentice. To claim the benefits, a taxpayer must obtain a certification from the Department of Career Education. Beginning January 1, 1998, a taxpayer who employs a youth apprentice in an approved apprenticeship/work-based learning program which is in an occupation not eligible under the Youth Apprenticeship Training Program, provided by Act 1103 of 1995, shall be entitled to a credit in the amount of $2,000 or 10% of the wages earned by the youth apprentice, whichever is less. The credit used for a taxable year may not exceed the individual or corporate income tax otherwise due in the year the credit earned. Any unused credit may be carried over for a maximum of two (2) consecutive tax years.
To claim the credits authorized, attach to the tax return a copy of the Certificate of Tax Credit issued by Tax Credits/Special Refunds Section
