ArkansasHB19222025 Regular SessionHouse

TO AMEND THE CONSOLIDATED INCENTIVE ACT OF 2003; TO CREATE AN INCOME TAX CREDIT FOR RELOCATING CORPORATE HEADQUARTERS TO THIS STATE; AND TO ENCOURAGE CORPORATIONS TO RELOCATE TO ARKANSAS.

Sponsored By: Jonathan Dismang (Republican), John Maddox (Republican)

Enacted

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 1 costs, 2 mixed.

New tax credit for relocating headquarters

For tax years beginning on or after January 1, 2026, Arkansas can award a credit to businesses moving corporate headquarters into the state. The income tax credit equals up to 50% of payroll for new full-time permanent employees. Approval requires a positive state cost-benefit review. County-tier minimum new jobs are 300 in tier 1, 250 in tier 2, 200 in tier 3, and 150 in tier 4. Average hourly pay must exceed the lower of the county or state average wage multiplied by the tier's rate. Those rates are 150%, 125%, 115%, and 110%, respectively. Businesses have four years after agreement approval to meet employment and payroll requirements; the general two-year payroll extension does not extend this deadline. Businesses must report payroll and new jobs annually, and the state audits the reports to set credits. Starting the year after the agreement is signed, credits can cover 100% of relocation-related income tax for five years. The limit falls to 80%, 60%, 40%, and 20% in years six through nine; no offset is allowed afterward. Credits cannot carry forward, be sold, or be transferred.

Tax credits for Arkansas business investments

For tax years beginning on or after January 1, 2026, Arkansas can award qualifying businesses investment tax credits. Businesses choose an income tax credit or a sales and use tax credit before approval. The credit equals up to 10% of audited eligible project costs and covers up to 50% of the matching yearly tax bill. Unused credits carry forward for up to nine years. County-tier minimum investments and required new annual payroll are: tier 1, $5 million and payroll over $2 million; tier 2, $3.75 million and over $1.5 million; tier 3, $3 million and over $1.2 million; tier 4, $2 million and over $800,000. Businesses generally have four years after agreement approval to meet the investment and payroll targets. Payments during the first five years of qualifying building or equipment leases lasting at least five years can count toward investment. Businesses must report eligible costs annually, and the state audits those costs before setting the credit.

Separate technology business tax credits end

For tax years beginning on or after January 1, 2026, the law ends separate investment credits for technology-based businesses. These businesses can no longer earn the repealed income tax or sales and use tax credits on new investments. The repeal also removes those credits' investment-based rates and wage-based yearly tax offsets.

Business credit deadlines and repayment risks

For tax years beginning on or after January 1, 2026, incentive recipients must report payroll annually and claim credits on time. Earned investment and headquarters credits shrink by 10% if not claimed within 12 months after the tax year ends, and disappear after 24 months. Agreements end if the first payroll report is not filed within four years after approval, unless the director extends that deadline. Later payroll shortfalls end incentives unless a written explanation and extension request receive approval; officials can allow up to two years to restore payroll and let incentives continue. If payroll is not restored by the extension's end, businesses must repay all incentives tied to the agreement; the state has two years to collect or sue.

Limits on combining business tax breaks

For tax years beginning on or after January 1, 2026, targeted businesses cannot combine the investment credit with listed research credits, payroll rebates, or payroll tax credits. Businesses can still combine the sales and use tax refund with those research credits and either payroll program. These allowed combinations must cover the same project. Businesses cannot claim multiple incentives for the same costs.

Sponsors & Cosponsors

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 89 • No: 31

Senate vote • 4/14/2025

Senate Vote - Monday, April 14, 2025 2:16:47 PM

Yes: 22 • No: 13

House vote • 4/8/2025

House Vote - Tuesday, April 8, 2025 3:24:11 PM

Yes: 67 • No: 18 • Other: 5

Actions Timeline

Notification that HB1922 is now Act 881
4/17/2025House
Correctly enrolled and ordered transmitted to the Governor's Office.
4/15/2025House
TO BE ENROLLED
4/14/2025House
Returned from the Senate as passed.
4/14/2025House
Returned to the House as passed.
4/14/2025Senate
Read the third time and passed.
4/14/2025Senate
Returned by the Committee, with the recommendation that it Do Pass
4/9/2025Senate
Read first time, rules suspended, read second time, referred to REVENUE & TAX - SENATE
4/8/2025Senate
Received from the House.
4/8/2025Senate
Read the third time and passed and ordered transmitted to the Senate.
4/8/2025House
Returned by the Committee Do Pass
4/7/2025House
Read the first time, rules suspended, read the second time and referred to the Committee on REVENUE & TAXATION- HOUSE
3/31/2025House
Filed
3/31/2025House

Bill Text

HB1922 - Introduced
3/31/2025
PDF
Act Version
PDF

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