The proposed legislation, known as the "Free Market Zones Act," aims to provide tax incentives for businesses located in designated opportunity zones in Arkansas. Specifically, the bill exempts these businesses from the income tax, corporate franchise tax, and elective pass-through entity tax. The definition of an opportunity zone is established as a population census tract in Arkansas that qualifies under federal law as of January 1, 2019. The act also includes provisions to amend existing tax codes to incorporate these exemptions and definitions.

Additionally, the bill repeals a previous section of the Arkansas Code that defined opportunity zones in relation to federal tax law, thereby streamlining the language and aligning it with the new definitions provided in the act. The effective date for the provisions of this act is set for tax years beginning on or after January 1, 2025. This legislation is designed to encourage business development in economically disadvantaged areas by reducing the tax burden on qualifying entities.

Statutes affected:
HB 1216: 26-51-460, 26-54-102(b)