InvestArk is a sales and use tax credit program available to businesses established in Arkansas for two years or longer that invest $5 million or more in plant or equipment for a new construction, expansion or modernization project.
The business must be approved for the program prior to beginning construction. The business must obtain a direct-pay sales and use tax permit from the State of Arkansas. Total project expenditures must be incurred within four years of the project plan approval. All projects will be audited upon completion to confirm the tax credits.
The credit earned is a percentage of reported eligible project cost and is calculated based upon one-half percent (1/2%) above the sales and use tax rate in effect at the time a financial incentive agreement is signed.
The credit may be used to offset up to fifty percent (50%) of the business’ sales and use tax liability on taxable purchases.
The credit is earned in the year the eligible expenditure is made and can be applied against the business’s state direct-pay sales and use tax liability in the year following the year of expenditure. If the entire credit cannot be used, the remainder may be carried forward for five years.