§ 15-4-2707
LexisNexis Practice Insights
1. Payroll Rebate Incentives called "Create Rebate" Program for Expanding Businesses Operating in Arkansas
2. Arkansas Taxpayers Should Consider EZ Benefits Offered by Other States
15-4-2707. Economic Development Incentive Fund -- Payroll rebate.
(a) There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a fund to be known as the Economic Development Incentive Fund of the Arkansas Economic Development Commission.
(b) The fund shall consist of revenues designated for this fund by the Revenue Division of the Department of Finance and Administration pursuant to agreements entered into by the commission with eligible businesses.
(c) After the department has received the certification of the payrolls of the businesses that have entered into financial incentive agreements with the commission for the payroll rebate authorized by this section, the department shall transfer the appropriate amount of money designated by the financial incentive agreements out of general revenues into a special account designated as special revenue for the fund.
(d) (1) The award of this incentive is at the discretion of the Director of the Arkansas Economic Development Commission and may be offered for a period of up to ten (10) years.
(2) (A) Benefits are conditioned upon the hiring of new full-time permanent employees with an annual payroll threshold of two million dollars ($2,000,000) and certifying to the department that the requisite payroll threshold has been met.
(B) The eligible business receiving benefits under this subsection must certify annually to the department that the requisite payroll threshold has been met.
(C) The eligible business receiving benefits under this subsection must claim the rebate payment on an annual basis by certifying or recertifying payroll figures and filing the appropriate claim forms with the Department of Finance and Administration.
(D) Failure to certify or recertify payroll figures and claim the rebate payment annually shall result in:
(i) A ten-percent reduction of the earned rebate if not claimed within twelve (12) months from the end of the tax year in which the rebate was earned; or
(ii) A one hundred-percent forfeiture of the earned rebate if not claimed within twenty-four (24) months from the end of the tax year in which the rebate was earned.
(3) Payments are subject to the following conditions:
(A) For tier 1 counties, the benefit is three and nine-tenths percent (3.9%) of the annual payroll of new full-time permanent employees;
(B) For tier 2 counties, the benefit is four and one-quarter percent (4.25%) of the annual payroll of new full-time permanent employees;
(C) For tier 3 counties, the benefit is four and one-half percent (4.5%) of the annual payroll of new full-time permanent employees;
(D) For tier 4 counties, the benefit is five percent (5%) of the annual payroll of new full-time permanent employees; and
(E) The director may authorize benefits to a prospective eligible business up to five percent (5%) of the payroll of new full-time permanent employees if the following conditions exist:
(i) The prospective eligible business is considering a location in another state;
(ii) The prospective eligible business receives at least seventy-five percent (75%) of its sales revenues from out of state; and
(iii) The prospective eligible business is proposing to pay wages in excess of one hundred percent (100%) of the county average hourly wage of the county in which it locates.
(e) (1) Technology-based enterprises, as defined in 14-164-203(12), may earn, at the discretion of the director, a payroll rebate equal to five percent (5%) of the payroll for new full-time permanent employees for a period not to exceed ten (10) years.
(2) In order to qualify for the payroll rebate:
(A) The average hourly wage of the payroll for new full-time permanent employees must be at least one hundred seventy-five percent (175%) of the state or county average hourly wage, whichever is less, for the county in which the technology-based enterprise locates or expands;
(B) The payroll for new full-time permanent employees must exceed two hundred fifty thousand dollars ($250,000); and
(C) The payroll rebate authorized by this subsection (e) may not be used in combination with the income tax credit based on payroll authorized by 15-4-2709.