Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Invest Arkansas Tax Credit topic
No spam. Unsubscribe anytime.
Senate committee refers Invest Arkansas tax‑credit extension after DFA flags up to $9.8 million revenue impact
Summary
The Senate Agriculture committee voted to send Senate Bill 566 to the Revenue & Tax Committee after debate over extending the Invest Arkansas 7% tax credit sunset to 2023; DFA told legislators the extension could reduce state sales and use tax revenue by up to $9.8 million across the carryforward period.
Senate Bill 566, which would extend the sunset on Arkansas's Invest Arkansas 7% tax credit for major construction projects, was referred to the Revenue and Tax Committee after members raised concerns about state revenue impact.
Sponsor Dave Wallace, state senator, District 22, told the Senate Agriculture, Forestry & Economic Development Committee that SB 566 would move the sunset date for credits approved under Act 465 so qualifying projects would have until 2023 to complete work and claim expenses. Wallace said the extension responds to COVID-related delays and argued the measure should not create new budget exposure because the credits were already approved for prior projects. "This bill extends the credit... by 2 years," Wallace said, and cited local industrial examples such as Nucor and Big River Steel that he said would benefit.
Alicia Austin Smith with the Department of Finance and Administration told the committee DFA had issued a fiscal impact statement. "Our understanding is it would just extend these credits... for 2 years," she said, adding that because of a five-year carryforward rule credits used after 2023 could be claimed through 2028. "As you can see in the fiscal, it's up to 9,800,000.0 in state sales and use tax loss," Austin Smith said, and offered to answer follow-up questions.
Committee members pressed DFA on timing and scope. One member clarified that the $9.8 million estimate is not confined to a two-year window but applies over the longer carryforward period, potentially seven years from enactment through claim years. Members also raised whether extending state tax credits could affect federal funding streams, urging additional review.
After discussion, the committee voted to refer SB 566 to the Revenue and Tax Committee for a more detailed fiscal review and for Revenue and Tax to weigh in on budget forecasts and carryforward implications. The referral means SB 566 will receive further analysis and debate before the full Senate chamber takes up the measure.
