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Arkansas’ performance-based incentives are nationally competitive and easy to use. For the first time in its history, the City of Little Rock has also funded performance-based incentives to complement those of the state. 

The chamber, in partnership with the Arkansas Economic Development Commission and the region's cities, focuses on a business’ specific needs, conducts a cost-benefit analysis, and designs a tailored incentive package unique to that business.

Incentive and exemption programs

  • Advantage Arkansas Income Tax Credit
  • ArkPlus Income Tax Credit
  • Create Rebate Payroll Cash Payments
  • Digital Product and Motion Picture Industry Development Act
  • Equity Investment Tax Credit
  • FreePort Law
  • Fly-away Exemptions
  • Infrastructure Grants
  • Property Tax Abatement
  • Recycling Tax Credit
  • Research & Development Incentives
  • Sales Tax Reduction for Power
  • Sales Tax Exemption for Manufacturing Equipment
  • Sales Tax Reduction for Repair & Replacement Parts
  • Targeted Business Incentives
  • Tax Back Sales & Use Tax Refund
  • Training Incentives

 

Taxation

According to CNBC, Arkansas has the 4th lowest cost of doing business, and that ranking can be attributed to the low taxes.

Personal Income does not exist at the city or county levels, while state rates range from 1 to 7 percent.

Corporate Income Tax does not exist at the city or county levels, while state rates range from 1 to 6.5 percent.

Real and Personal Property Tax does not exist at the state level, but rates per $1,000 of assessed valuation (20 percent assessment ratio) for individuals and businesses are $70.10 for Little Rock, $66.80 for North Little Rock, and $62.90 for Maumelle.

Sales and Use tax is 6.5 percent for the state, with an additional 1 percent for Pulaski County and 1.5 percent for the City of Little Rock, 1 percent for the City of North Little Rock, and 1 percent for the City of Maumelle.

Corporate Franchise Tax is .30 percent times the number of outstanding capital shares by par value for Arkansas corporations and .30 percent times the percentage of assets applicable to Arkansas for out-of-state corporations.

Unemployment Insurance - A business with no previous employment record in Arkansas is taxed at 3.2% on the first $12,000 of each employee’s earnings until an employment record is established, usually within three years. An existing Arkansas business is taxed between 0.1% and 14%. Each business’ employment record is determined primarily by its taxable payroll and history of employee voluntary termination. The tax is determined by past experience and the amount of the reserve ratio. The reserve ratio is the excess of contributions paid over benefits charged as related to payroll. The higher the reserve-ratio, the lower the tax rate.

 

Need more information about economic development?

If you have questions about how the chamber can help your business or how you can get involved in growing our regional economy, contact the Economic Development Team.