Arkansas' Research and Development incentive programs are intended to provide incentives for university-based research, in-house research, and research and development in start-up, technology-based enterprises.
University Based Research and Development
An eligible business that contracts with one or more Arkansas colleges or universities in performing research may qualify for a 33% income tax credit for qualified research expenditures.
In-House Research and Development
New and existing eligible businesses that conduct "in-house" research that qualifies for federal research and development tax credits may qualify for in-house research income tax credits.
The credit allowed is twenty percent (20%) of qualified research expenditures that exceed the base year, for a period of three (3) years and the incremental increase in qualified research and expenditures for the succeeding two (2) years.
The income tax credit earned for in-house research and development may be used to offset 100% of the businesses' state income tax liability. Any unused credit may be carried forward for a period of nine (9) years.
Research and Development in Area of Strategic Value
The Strategic Value Research and Development incentives are for qualifying businesses that invest in: 1) in-house research in an area of strategic value; or 2) a research and development project offered by the Arkansas Science and Technology Authority.
Research in an area of strategic value means research in fields having long-term economic or commercial value to the state, and that have been identified in the research and development plan approved from time to time by the Board of Directors of the Arkansas Science and Technology Authority.
The income tax credit is equal to 33% of qualified research expenditures. The maximum tax credit that may be claimed by a taxpayer under this program is $50,000 per tax year. Any unused credit may be carried forward for nine (9) years beyond the tax year in which it was earned.
R&D tax incentive details at the Arkansas Science & Technology Authority