10/23/2003
State Income Tax Credits for Qualified Arkansas Investments
by Mildred Holley, Technology Programs Manager
The Arkansas Capital Development Company Act, enacted in 2003, created investment incentives for projects that benefit Arkansas. Investors can receive a state income tax credit in the amount of one-third of their investment in an approved project. The investor can use this tax credit to offset up to 50% of the investor's state income tax liability in a given year. With prior approval, the credit can be sold or transferred to another party. Dividends and other income allocable to the investment are exempt from state, county and municipal income tax.
Eligible projects should benefit Arkansas and demonstrate a need for the tax credit. Projects are expected to assist existing business and industry to grow, encourage new business and industry to locate in Arkansas, or improve the standard of living of Arkansas’ citizens. Particular emphasis will be given to projects that create or retain jobs, advance technology-based industries, enhance the state’s entrepreneurial environment, or foster the flow of capital to underserved areas of the state.
If you are an entrepreneur who would like to learn how to qualify your project for these credits or a potential investor who would like to know more about the investment credits available, please contact Commerce Capital Development Company at 501.374.9247 or 800.216.7237. Additional details and application guidelines to seek project qualification are also available at http://ccdc.arcapital.com.
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