Exemptions/Reductions

A business may choose between two state income tax credit options: A credit of 3.9% of the total annual payroll of the employees working in the childcare facility, or A one-time $5,000 state income tax credit for the first year that the business provides its employees with a childcare facility. Any unused credit may be carried forward two years. In addition to either option, businesses may receive a refund on sales and use taxes on construction materials and furnishings purchased to equip an approved childcare facility. To qualify for these incentives, the business must be approved to operate an early childcare program. Eligibility is determined by the Arkansas Department of Human Services, Division of Child Care and Early Childhood Education. The business may choose to operate the facility or contract the operations. Recycling Equipment Arkansas allows taxpayers to receive an income tax credit for the purchase of equipment used exclusively for reduction, reuse or recycling of solid waste material for commercial purposes, whether or not for profit, and the cost of installation of such equipment by outside contractors. Expenditures eligible for tax credit certification: waste reduction, reuse or recycling equipment used exclusively for waste reduction, reuse or recycling of solid waste for commercial purposes, whether or not for profit, including the cost of installation of such equipment by outside contractors; waste reduction, reuse or recycling equipment must be used exclusively in the or manufacturing of products containing at least fifty percent (50%) recovered materials, of which at least ten percent (10%) of the recovered materials shall be post-consumer waste; the cost of replacing existing waste reduction, reuse or recycling equipment shall be eligible for certification only if the replacement provides greater capacity for recycling or provides the capability to manufacture additional or a different type of solid waste.The amount of the tax credit shall equal 30% of the cost of equipment and installation costs deemed eligible by the Arkansas Department of Environmental Quality. Credits may be carried forward for three consecutive years following the taxable year in which the credits accrued. Taxpayers receiving credit under this Act for the purchase of machinery and equipment shall not be entitled to any other state or local tax credit or deduction based on the purchase of the machinery or equipment, except normal depreciation. Replacement and Repair of Manufacturing Machinery and Equipment Sales and Use Tax Refund Act 1404 of 2013, as codified in §§ 26-52-447, 26-53-149 and 15-4-3501, establishes two options by which certain state sales and use taxes relating to the partial replacement and repair of machinery and equipment used directly in manufacturing may be refunded to eligible taxpayers beginning July 1, 2014.

To qualify for these incentives, the business must be approved to operate an early childcare program. Eligibility is determined by the Arkansas Department of Human Services, Division of Child Care and Early Childhood Education. The business may choose to operate the facility or contract the operations. Recycling Equipment