The proposed bill amends the Consolidated Incentive Act of 2003 to introduce a new "modernization and automation tax credit" aimed at encouraging investment by existing businesses in Arkansas. Key changes include the definition of "project costs," which now allows eligible costs to be incurred within four years or six years for projects qualifying for the new tax credit. The bill also modifies the application process for the tax credit, requiring businesses to submit their applications before incurring project costs and ensuring that only costs incurred after approval are eligible. Additionally, the bill stipulates that the maximum credit available is up to five percent of eligible project costs, with a cap of $2 million that can be claimed in a fiscal year.

Furthermore, the bill includes provisions that require businesses to maintain their payroll and employment levels during the project and for 24 months afterward. It also establishes a forfeiture provision, mandating that any claimed credits must be returned if the business breaches the financial incentive agreement. The legislation clarifies that the modernization and automation tax credit cannot be combined with other tax credits for the same project and sets an effective date for the new provisions starting October 1, 2025.

Statutes affected:
Old version HB1935 V2 - 4-8-2025 09:41 AM: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
Old version HB1935 Original - 3-31-2025 04:15 PM: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
HB 1935: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)
Act 882: 15-4-2703(29), 15-4-2706(c), 15-4-2712(b), 15-4-3501(g)