Taxes & Incentives

Tax Climate in Metro Little Rock

A stimulating business environment in Central Arkansas.

Arkansas and Metro Little Rock offer a fair and pro-business tax system and among the lowest costs of doing business in the nation. Competitive incentives are available at the state and local level to fuel job creation, capital investment, research and development and more. ArkPlus, a state income tax credit program, provides tax credits of 10% of the total investment in a new location or expansion project. Infrastructure grants and tax refunds on the purchase of building materials and taxable machinery spur industrial development. Businesses that partner with an Arkansas university on research and development may qualify for a 33% income tax credit. Community grants and other funding are available to assist companies at the local level. For qualifying projects, Metro Little Rock economic development organizations partner with the state to develop tailored packages for businesses’ specific needs.

Rankings

#1

Lowest Cost of Doing Business Arkansas
CNBC Best States 2018

#11

Best Business Costs Arkansas
WalletHub2018

Figures

Payroll Rebate for up to 10 Years Up to 5%
Arkansas Create Rebate
Tax Credit 30%
Installation of Recycling Equipment for Solid Waste
Tax Credit 20%
Qualified Research Expenditures
Target Sectors Eligible for Tax Credits or Refunds 6

Taxes

Credit Where it Counts

Arkansas and Metro Little Rock offer a low cost of doing business and a pro-business tax climate. Here is just a sample of key tax policies at the state level. You can read the full list of policies here.

  • Capital Gains Tax Reduction: This program allows for an exemption of net capital gains.
  • Corporate Franchise Tax: The state’s franchise tax is levied on Arkansas corporations for the grant of charter privileges and on non-Arkansas corporations for doing business in Arkansas.
  • Corporate Income Tax: Domestic and foreign corporations doing business in Arkansas are subject to tax on net income at graduated rates. Taxable income is apportioned according to a three-factor formula (property, payrolls and sales attributed to Arkansas) with a double-weighted sales factor.
  • Personal Income Tax: Resident and non-resident individuals, estates and trusts deriving income from within the state are subject to a tax on their net income.
  • Real/Personal Property Tax: The State of Arkansas does not have a property tax; however, Arkansas cities and counties do. Real and personal property financed by revenue bonds and general obligation bonds may be exempt during the lease-amortization period in which a local government retains title to the property.

Incentives

Maximizing Investment

Arkansas and Metro Little Rock offer competitive incentives to spur job creation, business investment, research and development and more. Browse a sample of key incentive programs below, or read the full list of state-level incentives.

  • Discretionary Incentives: The state’s Create Rebate provides a payroll rebate, while the Targeted ArkPlus credits investments from $250,000 up to $500,000.
  • Investment Incentives: Tax Back provides sales and use tax refunds on the purchase of building materials and taxable machinery and equipment to qualified businesses investing at least $100,000 and who sign agreements with the State of Arkansas.
  • Job Creation Incentives: Arkansas’ job-creation incentives are based on payroll and use a tier system based on poverty rate, unemployment rate, per capita personal income and population growth to determine qualification criteria and benefits.
  • Research & Development Incentives: Arkansas provides incentives for university-based research, in-house research, and research and development in start-up, technology-based enterprises. These tax credits may be carried forward for nine years and offset up to 100 percent of a business’ tax liability in a given year.
Ben France Vice President Economic Development<br />
Little Rock Regional Chamber

Ben France

Vice President Economic Development
Little Rock Regional Chamber

bfrance@littlerockchamber.com
501.377.6004