Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of a new location or expansion in the state.
In order to qualify for the Advantage Arkansas program, the proposed average hourly wage of the company must be equal to or greater than the lowest county average hourly wage as calculated by the Commission based upon data from the Arkansas Department of Workforce Services.
The payroll threshold to qualify and the benefit received depend on the tier in which the business locates or expands.
Tier Payroll Threshold Benefit Based on Payroll of New, Full-time, Permanent Employees 1 $125,000 1% of payroll 2 $100,000 2% of payroll 3 $75,000 3% of payroll 4 $50,000 4% of payroll
The annual payroll thresholds of the new employees must be met within 24 months following the date the financial incentive agreement is signed by the Commission.
The income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than 50 percent of a business’ income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees must be Arkansas taxpayers.