Arkansas House Bill 95 offers tax incentives for expanding local businesses

During a recent Senate meeting in Arkansas, lawmakers discussed House Bill 1935, aimed at enhancing the state's economic landscape by providing new incentives for local businesses. Currently, Arkansas offers various incentives to attract companies from outside the state, but there is a notable gap when it comes to supporting existing businesses that wish to expand or modernize their operations.

Senators highlighted that without adequate incentives for local companies, Arkansas risks losing significant investments to neighboring states. House Bill 1935 seeks to address this issue by introducing a tax credit for businesses that have been operating in Arkansas for at least two years and are planning substantial investments of $25 million or more in eligible project costs. This could include the construction of new facilities or the expansion of existing ones.

The proposed tax credit would allow qualifying businesses to receive up to 5% of their eligible project costs, with a maximum credit of $2 million available in any fiscal year. Importantly, any unused credits can be carried forward for up to five years, providing businesses with flexibility in their financial planning. Additionally, to qualify for the credit, businesses must maintain their current payroll and employment levels throughout the project and for two years after its completion.

This initiative is seen as a crucial step in fostering a more supportive environment for Arkansas businesses, encouraging them to invest locally rather than seeking opportunities elsewhere. As the state continues to navigate its economic recovery, the outcomes of this bill could have lasting implications for job creation and community growth in Arkansas.