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  • Incentives

  • The mission of Clarksville Regional Economic Development Organization (CREDO) is to work with partners throughout the local community, region, and state to help existing businesses grow and strengthen their sustainability, as well as to attract new businesses to the area. These partners include the local municipalities, Johnson County, the Clarksville Light & Water Company, the Arkansas Economic Development Commission, the West Central Arkansas Planning & Development District, the Arkansas State Chamber, the Fort Smith Regional Alliance, the Arkansas River Valley Alliance, regional higher education institutions and numerous others.

    CREDO is made up of a President and a Board of Directors. Kellie Danielson serves as the President as well as CEO of the Clarksville-Johnson County Regional Chamber of Commerce.

    By order of the city council of Clarksville, the city has dedicated 15% of the revenues generated through a 1 cent sales tax to a special economic development fund. CREDO oversees those funds and makes recommendations to the city as to how those funds are most appropriately utilized to stimulate job growth and benefit the overall community. We realize no two projects are exactly alike and that one cookie cutter incentive package does not meet the needs of every business. CREDO works with potential companies to tailor incentive packages that are right and specific to meet the needs of the growing company. To start crafting a local incentive package that fits your company or your client, contact Kellie Danielson at 479-754-2340 or kdanielson@clarksvillearchamber.com

    State Incentives

    InvestArk (Sales and Use Tax Credit)

    InvestArk is a sales and use tax credit program available to businesses established in Arkansas for two years or longer that invest five million dollars ($5,000,000) or more at a single location in plant or equipment for new construction, expansion or modernization.

    The business must be approved for the program prior to beginning construction or incurring eligible project costs and the company must obtain a direct-pay sales and use tax permit from the State of Arkansas. A credit against the business’ state direct-pay sales and use tax liability, equal to one-half percent (1/2%) above the state sales and use tax rate in effect at the time of application, is earned based on the total eligible project cost. Currently, the percentage that may be earned as credit is 7% of eligible project expenditures. In any year, tax credits claimed under this program cannot exceed 50% of the business’ sales and use tax liability on taxable purchases. All reported expenditures will be audited by the Arkansas Department of Finance and Administration.

    The credit is earned in the year the eligible expenditure is made and can be applied against the business’ state direct-pay sales and use tax liability in the year following the year of expenditure. Any unused credits may be carried forward for a period of up to five (5) years. Total project expenditures must be incurred within four (4) years of the date the project is approved by the Arkansas Economic Development Commission (AEDC).

    Tax Back (Sales and Use Tax Refund)

    The Tax Back program provides sales and use tax refunds on the purchase of building materials and taxable machinery and equipment to qualified businesses investing at least $100,000 and who either a) sign a job creation agreement under the Advantage Arkansas or Create Rebate programs within 24 months of signing the Tax Back agreement or b) have met the requirements of an Advantage Arkansas or Create Rebate agreement within the previous 48 months. Applicants for Tax Back must also obtain an endorsement resolution from a local governing authority authorizing the refund of its local taxes. Applicants must meet the qualification criteria under the requisite Advantage Arkansas or Create Rebate program in which they are participating and must be approved by AEDC.

    The refund of sales and use taxes shall not include the refund of taxes dedicated to the Educational Adequacy Fund provided in §19-5-1227 or the taxes dedicated to the Conservation Tax Fund provided in §19-6-484; which totals 1%. The state tax rate is 6.5% so the eligible refund would be 5.5%.

    Advantage Arkansas (Income Tax Credit)

    Advantage Arkansas offers a state income tax credit for job creation based on the payroll of new, full-time, permanent employees hired as a result of the project. The table above shows the job creation requirements and the available benefit under the program.

    In order to qualify for the Advantage Arkansas program (all tiers), the proposed average hourly wage of the new employees hired as a result of the project must be equal to or greater than the lowest county average hourly wage. Currently, the average hourly wage threshold for the Advantage Arkansas program is $11.05.

    The Advantage Arkansas income tax credit is earned each tax year for a period of five years. The income tax credit cannot offset more than 50 percent of a business’ income tax liability in any one year and may be carried forward for nine years beyond the tax year in which the credit was first earned. The credit begins in the tax year in which the new employees are hired. Employees included in the new additional payroll under the project must be Arkansas taxpayers.

    ArkPlus (Income Tax Credit)

    ArkPlus is a state income tax credit program that provides tax credits of 10% of the total investment in a new location or expansion project. This discretionary incentive is offered in highly competitive situations.

    ArkPlus requires both a minimum investment and a minimum payroll of new, full-time, permanent employees hired as a result of the project, depending on the tier in which the business locates. Total project expenditures must be incurred within four (4) years of the date the project is approved by AEDC. New, full-time, permanent employees must be hired within 48 months of the date the financial agreement is signed.

    The income tax credits may be used to offset 50% of the Arkansas income tax liability in the tax year the credit is earned. Any unused credits may be carried forward for nine (9) years beyond the tax year in which the credit was first earned.

    Create Rebate (Cash Rebate)

    Incentives are negotiated and offered at the discretion of the Executive Director of the Arkansas Economic Development Commission.

    Create Rebate provides annual cash payments based on a company’s annual payroll for new, full-time, permanent employees. In order to qualify, the company must create a minimum of $2 million annually in new payroll. The minimum payroll must be met within 24 months of the effective date of the financial incentive agreement. No benefits may be claimed until the $2 million annual payroll threshold is met.

    Create Rebate benefits are available after the business certifies to the Arkansas Department of Finance & Administration that it has fulfilled the minimum payroll requirements and the reported payroll has been verified. The percentage of the benefit depends on the tier assignment of the county where the job creation occurs.

    Infrastructure Grants (Governor's Quick Action Closing Fund, Community Development Block Grants)

    The state shares the cost of project infrastructure needs by committing grants from state and federal infrastructure funds. The amount of assistance committed is dependent upon the strength of the company, number of jobs, average wage, project investment and costs associated with facility/site improvements.

     

    Eligibility for all of the programs outlined above vary of a variety of factors. To find out which packages your company or client is eligible for contact Kellie Danielson at 479-754-2340 or kdanielson@clarksvillearchamber.com