Current through Register Vol. 49, No. 9, September, 2024
I.
Introduction
In order to facilitate the construction of specific capital
improvement projects, Act 1347 of 1999, the Arkansas Public Roads Improvements
Credit Act was passed by the 82nd General Assembly
of the State of Arkansas. The Arkansas Economic Development Commission (AEDC)
has the authority to administer the program under the Act.
The goal of the program is to provide an income tax credit
incentive to any individual, fiduciary, or corporation subject to Arkansas
state income tax to make contributions in aid of the construction of public
roads through the Public Roads Incentive Fund.
II.
Definitions
A. "Capital improvements" means capital
improvements for public roads.
B.
"Contribution" means a contribution in aid of construction of a public road
project made by a taxpayer to the Public Roads Incentive Fund.
C. "Contribution in aid of construction" is a
direct contribution of cash made by a taxpayer for public road
improvements.
D. "County" means any
county in the State of Arkansas.
E.
"Commission" means the Arkansas Economic Development Commission.
F. "Director" is the director of the Arkansas
Economic Development Commission.
G.
"Fund" means the Public Roads Incentive Fund.
H. "Governing Authority" means the quorum
court of a county, the governing body of a municipality, and the Arkansas State
Highway Commission.
I.
"Municipality" means any city or incorporated town in the State of
Arkansas.
J. "Project" means all,
any combination or any part of the capital improvements for public roads, which
are authorized by a governing authority and approved by the director.
K. "Public roads" means roads maintained by a
governing authority.
L. "Taxpayer"
includes any individual, fiduciary, or corporation subject to Arkansas State
Income Tax.
III.
To Contribute to the Public Roads Incentive Fund
A. Contributions
1. Eligible contributors include any taxpayer
subject to Arkansas state income tax that contributes to the Public Roads
Incentive Fund of the Arkansas Economic Development Commission.
2. The Public Roads Incentive Fund shall
consist of contributions made by taxpayers for public roads projects approved
by the director, and any other funds as are designated or deposited to the fund
by law.
3. Each taxpayer that
contributes to the Public Roads Incentive Fund may make a general contribution
or may designate a project for which the contribution is earmarked. When
donations are made for dedicated projects, a separate account will be
established.
4. To contribute to
the Public Roads Incentive Fund, the taxpayer must send a completed application
and a contribution for the Public Roads Incentive Fund to the Arkansas Economic
Development Commission. An application can be obtained by contacting the AEDC
Incentives Manager.
5. The
contribution will be transmitted to the Treasurer of the State for deposit into
the Public Roads Incentive Fund.
B. Applicants
1. Governing authorities may apply to the
director of AEDC for funding assistance for capital improvement projects for
public roads. as provided by Act 1347 of 1999. The director is authorized to
approve capital improvements for funding assistance upon a finding that a
project is in the public interest and that there are sufficient dedicated
project funds, when combined with the requested funds from the Public Roads
Incentive Fund, to complete the project.
2. Applicants must provide documentation that
there are sufficient dedicated project funds available, when combined with the
amount requested from the Public Roads Incentive Fund, to complete the
improvement project.
3. The
application, endorsement resolution, and project plan must be sent to AEDC for
review. An application may be obtained by contacting the AEDC Incentives
Manager.
4. The application must
include:
(a) A city or county endorsement
resolution or a copy of a minute order from the Arkansas State Highway
Commission.
(b) A completed
application with a project plan.
(c) Documentation of sufficient dedicated
project funds to complete the improvement project.
IV.
Powers and
Duties of the Arkansas Economic Development Commission
A. The director of the Arkansas Economic
Development Commission will determine whether or not the project is in the
public interest and whether or not there are sufficient dedicated project
funds, when combined with the requested funds from the Public Roads Incentive
Fund, to complete the project. If the director determines that the project is
in the public interest and that sufficient funding is available, the governing
authority will be informed and a sub-account will be established for the
project.
B. Any project that is
submitted to AEDC for approval will have to be fully funded before AEDC will
release of funds for the project.
C. Any contributions which remain in a
project account after a project is completed or terminated will be held and
applied to other public roads projects approved by the director.
D. A separate account will be established for
each project, and contributions specified for a project shall be applied to
that account. The director is authorized to assist the governing authority in
obtaining assistance from any other department of state government. When
sufficient funds are accumulated for a particular project, the director will
authorize the release of funds for the project.
V.
Administration of Benefits
Eligible taxpayers will be entitled to a state income tax
credit that may be applied in any tax year after January 1, 1999.
The credit shall be determined in the following manner:
A. The credit is limited to an amount not to
exceed 33% of the taxpayer's contribution;
B. In any one (1) tax year, the credit
allowed shall not exceed 100% of the taxpayer's net Arkansas state income tax
liability; and
C. Any credit over
100% of the taxpayer's net Arkansas state income tax liability for any one (1)
tax year may be carried forward and applied against Arkansas state income tax
for the next-succeeding tax year (subject to the same terms as in "B." above)
and annually thereafter for a total period of ten(10) years next-succeeding the
year in which the credit arose or until the credit is exhausted, whichever
occurs first.
D. The Arkansas
Economic Development Commission will issue a letter certifying the amount
contributed to the Public Roads Incentive Fund. This certification must be
attached to the taxpayers' income tax return in order to claim the
credit.
Arkansas Public Roads Improvements Tax Credit Program
Rule Summary
The Arkansas Economic Development Commission (AEDC) has
promulgated an amended administrative rule for the Public Roads Improvements
Tax Credit Program to conform the rule to changes made by Act 628 of
2021.
Background
Act 1347 of 1999 created the Public Roads Improvements Credit
Act that established the Public Roads Tax Credit Program. The program provides
a tax credit to a taxpayer that contributes to the Public Roads Incentive Fund.
The tax credit is equal to 33% of the taxpayer's contribution. The Public Roads
Incentive Fund may be used to fund approved public roads projects. Governing
bodies may apply to AEDC for funding assistance for capital improvement
projects for public roads. Act 628 of 2021 amended the existing program.
Changes made to the program were retroactively effective for tax years on or
after January 1, 2020.
Key Points
The final rule includes the following changes:
* Increases the amount of tax credits a taxpayer may use of
offset their tax liability in any 1 year from 50% to 100%;
* Extends the carry forward period for unused tax credits from
3 years to 10 years; and
* Clarifies definitions and makes various technical corrections
to the rule.
Effective Date
The amended rule for the Arkansas Public Roads Improvements Tax
Credit Program is effective on November 29, 2021.
