§ 15-4-1902 - Definitions.
15-4-1902. Definitions.
As used in this subchapter:
(1) (A) "Average hourly wage" means the average wage of the net new full-time permanent employees based on payroll for the most recent quarter reported to the Department of Workforce Services.
(B) "Average hourly wage" is computed by using the total of the net new full-time permanent employees' reported taxable earnings, including overtime pay and one quarter (1/4) of the employee's annual bonus amount, divided by the number of weeks worked during the most recent quarter, divided by the average hours worked per week per net new full-time permanent employee.
(2) "Commission" means the Arkansas Economic Development Commission;
(3) "Corporate headquarters" means the home or center of operations, including research and development, of a national or multinational corporation;
(4) "Director" means the Director of the Arkansas Economic Development Commission;
(5) "Distribution center" means a facility for the reception, storage, or shipping of:
(A) A business' own products or products that the business wholesales to retail businesses or ships to its own retail outlets;
(B) Products owned by other companies with which the business has contracts for storage and shipping if seventy-five percent (75%) of the sales revenues are from out-of-state customers; or
(C) Products for sale to the general public if seventy-five percent (75%) of the sales revenues are from out-of-state customers;
(6) "Eligible business" is defined as one (1) or more of the following:
(A) Manufacturers classified in Standard Industrial Classification codes 20-39, including semiconductor and microelectronic manufacturers;
(B) (i) Computer businesses primarily engaged in providing computer programming services; the design and development of prepackaged software; businesses engaged in digital content production and preservation; computer processing and data preparation services; information retrieval services; and computer and data processing consultants and developers.
(ii) All businesses in this group must derive at least seventy-five percent (75%) of their revenue from out-of-state sales and have no retail sales to the general public;
(C) Businesses primarily engaged in commercial physical and biological research as classified by Standard Industrial Classification code 8731;
(D) (i) Businesses primarily engaged in motion picture productions.
(ii) All businesses in this group must derive at least seventy-five percent (75%) of their revenue from out-of-state sales and have no retail sales to the general public;
(E) A distribution center with no retail sales to the general public unless seventy-five percent (75%) of the sales revenues are from out-of-state customers;
(F) An office sector business with no retail sales to the general public; and
(G) A corporate or regional headquarters with no retail sales to the general public;
(7) "Financial incentive plan" means an agreement entered into by a business and the department to provide the business an incentive to locate a new facility or expand an existing facility in Arkansas;
(8) "Governing authority" means the quorum court of a county or the governing body of a municipality;
(9) (A) "High unemployment" means an unemployment rate equal to or in excess of one hundred fifty percent (150%) of the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the Department of Workforce Services, when the state's annual average unemployment rate is six percent (6%) or below.
(B) When the state's annual average unemployment rate is above six percent (6%), "high unemployment" means equal to or in excess of three percent (3%) above the state's average unemployment rate for the preceding calendar year as specified by statewide annual labor force statistics compiled by the Department of Workforce Services;
(10) (A) (i) "Net new full-time permanent employee" means a position or job which was created as a result of a project and which is filled by one (1) or more employees or contractual employees who were Arkansas taxpayers during the year in which the tax credits or incentives were earned.
(ii) The position or job held by the employee or employees must have been filled for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours per week.
(B) However, in order to qualify for the provisions of this subchapter, a contractual employee must be offered a benefits package comparable to a direct employee of the business seeking incentives under this subchapter;
(11) "Office sector" means control centers that influence the environment in which data processing, customer service, credit accounting, telemarketing, claims processing, and other administrative functions that act as production centers are performed;
(12) The "payroll factor" of a project plant or facility is a fraction, the numerator being the total amount paid in this state during the tax period by the project plant or facility for compensation to employees working in the plant or facility and the denominator being the total compensation paid in the taxpayer's Arkansas operations during the tax period;
(13) "Program" means this subchapter;
(14) (A) "Project" means the construction or expansion of an eligible business as defined in subdivision (6) of this section in Arkansas costing at least five million dollars ($5,000,000), including the cost of the land, buildings, and equipment used in the construction or expansion, which has been approved by the department as a construction or expansion qualifying for tax benefits under this subchapter.
(B) The project cost shall include:
(i) All activities and costs associated with the construction of a new plant or facility;
(ii) All activities and costs associated with the expansion of an established plant or facility by adding to the building or production equipment or support infrastructure, or both; and
(iii) All activities and costs associated with the replacement of production or processing equipment or support infrastructure, or both.
(C) The project cost shall not include routine operating expenditures;
(15) The "property factor" of a project plant or facility is a fraction, the numerator being the average value of the taxpayer's real and tangible personal property owned or rented and used at the project plant or facility during the tax period and the denominator being the average value of all the taxpayer's real and tangible personal property owned or rented and used during the tax period in Arkansas;
(16) "Regional headquarters" means the center of operations for a specific geographical area; and
(17) The "sales factor" of a project plant or facility is a fraction, the numerator being the total sales of the project plant or facility in this state during the tax period and the denominator being the total sales of the taxpayer's Arkansas operations during the tax period.