Note: the materials you provided contain conflicting labels and fragments (a short title referencing educator/first responder tax deductions and mixed-in Illinois nursing facility language), but the principal bill text and Department of Finance & Administration (DFA1) fiscal statement relate to an Arkansas amendment to the Consolidated Incentive Act of 2003 establishing tax incentives for corporations that relocate headquarters to Arkansas. This summary focuses on the Arkansas HB 1922 content in those documents.
Summary — HB 1922 (Arkansas) — Consolidated Incentive Act amendments and corporate headquarters relocation tax credit
Purpose
- To amend the Consolidated Incentive Act of 2003 to (1) change how certain investment tax credits are applied and elected, (2) repeal certain technology-enterprise credits, and (3) create a new income tax credit to encourage businesses to relocate corporate headquarters to Arkansas.
Key provisions
- Election between income- or sales/use-tax offset: A qualified business must elect before commission approval whether the investment credit applies as an income tax credit or a sales and use tax credit.
- Investment tax credit: Director may authorize a tax credit of up to 10% of audited eligible project costs (previous law established a 10% credit; language clarified to permit up to 10%).
- Repeal: The existing income tax and sales/use tax credits for technology-based enterprises (as previously defined) are repealed.
- New corporate headquarters relocation income tax credit:
- Amount: Credit equal to up to 50% of payroll for qualifying new full‑time permanent employees (i.e., up to 50% of taxable wages for new hires associated with the relocation).
- County-tiered employment and wage thresholds required for eligibility:
- Tier 1: at least 300 employees; pay ≥ 150% of average wage
- Tier 2: at least 250 employees; pay ≥ 125% of average wage
- Tier 3: at least 200 employees; pay ≥ 115% of average wage
- Tier 4: at least 150 employees; pay ≥ 110% of average wage
- Credit phase-out for offset of income tax liability:
- Years 1–5: offsets 100% of income tax liability attributable to the relocation
- Year 6: 80%; Year 7: 60%; Year 8: 40%; Year 9: 20%; Year 10: 0%
- Unused relocation credits may not be carried forward, sold, or transferred and expire if unused.
- Certification and compliance: Businesses must timely certify eligible project costs and annual payroll to maintain incentives; failure to timely certify or to claim credits can result in partial or total loss of incentives.
- Investment thresholds by county tier (examples):
- Tier 1: investment ≥ $5,000,000 and new-employee payroll > $2,000,000
- Tier 2: investment ≥ $3,750,000 and payroll > $1,500,000
- Tier 3: investment ≥ $3,000,000 and payroll > $1,200,000
- Tier 4: investment ≥ $2,000,000 and payroll > $800,000
- Lease treatment: Lease payments for at least five years may be counted as qualifying expenditures for the investment threshold (first five years).
Administrative/technical items
- AEDC (Arkansas Economic Development Commission) must certify cost‑benefit before approval; incentives are subject to an incentive agreement between taxpayer and AEDC.
- Department of Finance and Administration (DFA) implementation: AIRS programming estimated cost $24,000; tax forms/instructions must be updated; department staff and tax community education required.
Fiscal impact
- DFA fiscal statement: revenue neutral, because approval requires a positive cost‑benefit certification by AEDC and an incentive agreement. Implementation costs (AIRS) approx. $24,000.
Effective date and legislative status
- DFA1 text states: effective for tax years beginning on or after January 1, 2026.
- Provided legislative actions (mixed chronology) indicate the bill was passed by the legislature and signed by the Governor (dates shown in the materials), with an indicated effective date of 9/1/2025 in one listing. Recommendation: verify the final enacted Act text (Act number) or the Secretary of State publication for the authoritative effective date, since supplied materials contain inconsistent dates.
Who is affected
- Corporations considering relocating a corporate headquarters to Arkansas (especially large employers that can meet tiered thresholds).
- Existing beneficiaries of technology-based enterprise credits (those credits are repealed).
- State revenue administration (DFA) for implementation and processing.
- Local labor markets where headquarters locate (potential job creation at specified wage levels).
For precise legal application, organizations should review the enacted statute language (Act) and coordinate with AEDC and DFA for program rules, application procedures, and timing.
