The proposed bill amends the Consolidated Incentive Act of 2003 to introduce a new income tax credit designed to attract corporations to relocate their headquarters to Arkansas. It empowers the Director of the Arkansas Economic Development Commission to offer a tax credit of up to 10% for businesses that meet specific investment and payroll thresholds based on county tiers. Additionally, a new subsection allows for a tax credit of up to 50% of the payroll for new full-time permanent employees at relocated corporate headquarters, contingent upon a favorable cost-benefit analysis and the creation of a specified number of jobs with wages above certain averages.

The bill also outlines the certification process for businesses to claim these tax credits, which can offset income tax liabilities over a ten-year period. Key amendments include a ten-percent reduction of the earned tax credit if not claimed within twelve months, a complete forfeiture if not claimed within twenty-four months, and the termination of financial incentive agreements if initial payroll figures are not certified within four years. Furthermore, it modifies the restrictions on combining various incentives, specifying which tax credits can be paired for the same project. The changes are set to take effect for tax years beginning on or after January 1, 2026.

Statutes affected:
HB 1922: 15-4-2706(b), 15-4-2706, 15-4-2711(g), 15-4-2711, 15-4-2712(b)
Act 881: 15-4-2706(b), 15-4-2706, 15-4-2711(g), 15-4-2711, 15-4-2712(b)