Definitions

  1. Law
  2. Arkansas Code
  3. Taxation
  4. Local Taxes
  5. Local Sales and Use Tax Economic Development Project Funding Act
  6. Definitions

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As used in this chapter:

  1. (1) “Calendar quarter” means a three-month period that begins on January 1, April 1, July 1, or October 1;

  2. (2) “City” means any city of the first class, city of the second class, or incorporated town of the state;

  3. (3) “Develop” means to plan, design, construct, acquire by purchase, acquire by eminent domain, own, operate, rehabilitate, lease as lessor or lessee, enter into lease-purchase agreements with respect to, lend, make grants in respect of, or install or equip any lands, buildings, improvements, machinery, equipment, or other properties of whatever nature, whether real property, personal property, or mixed property;

  4. (4) “Economic development project” means infrastructure, land, buildings, and other improvements on the land and all other machinery, apparatus, equipment, office facilities, and furnishings that are necessary, suitable, or useful by a sponsor that meets at least three (3) of the following criteria:

    1. (A) The sponsor makes an investment of at least ten million dollars ($10,000,000) in the economic development project;

    2. (B) The economic development project creates at least fifty (50) new jobs;

    3. (C) The sponsor pays wages to new full-time permanent employees in excess of one hundred ten percent (110%) of the lesser of the state average wage or county average wage for the preceding calendar year;

    4. (D) The economic development project is related to a targeted industry as identified in a local, regional, or state strategic plan for economic development;

    5. (E) The economic development project has a benefit-to-cost ratio greater than two (2) as determined by the Arkansas Economic Development Commission;

    6. (F) The economic development project receives at least a three-fourths vote of support from the city council or quorum court; or

    7. (G) The sponsor signs a financial incentive agreement with the commission;

  5. (5) “Infrastructure” means:

    1. (A) Land acquisition;

    2. (B) Site preparation;

    3. (C) Road and highway improvements;

    4. (D) Rail spur construction;

    5. (E) Water service;

    6. (F) Wastewater treatment;

    7. (G) Employee training, including without limitation equipment used for the training;

    8. (H) Environmental mitigation;

    9. (I) Training and research facilities and the necessary equipment for the training and research facilities; and

    10. (J) Sponsor-owned electric equipment, including without limitation redundant transformers, redundant service lines, backup generation devices, substation equipment, and similar electric equipment that is owned by a sponsor;

  6. (6)

    1. (A) “Investment” means money expended by a sponsor on project costs directly related to an economic development project.

    2. (B) “Investment” does not include amounts expended in aid of an economic development project by the state or by a local entity;

  7. (7) “Levying entity” means a city or a county levying a local sales and use tax under this chapter;

  8. (8) “Local entity” means a nonprofit corporation, county, city, improvement district, or school district in the state or an agency or instrumentality of a nonprofit corporation, county, city, improvement district, or school district;

  9. (9) “Local sales and use tax” means a tax levied under this chapter on the gross proceeds or gross receipts derived from sales within a city or county of all items that are subject to taxation under the Arkansas Gross Receipts Act of 1941, § 26-52-101 et seq., or the Arkansas Compensating Tax Act of 1949, § 26-53-101 et seq.;

  10. (10) “New full-time permanent employee” means a position or job expected to be held by the employee or employees for at least twenty-six (26) consecutive weeks with an average of at least thirty (30) hours of work per week;

  11. (11) “New job” means a position for a new full-time permanent employee created at an economic development project;

  12. (12)

    1. (A) “Project costs” means costs associated with the:

      1. (i) Construction of a new plant or facility, including without limitation land, building, production equipment, or support infrastructure;

      2. (ii) Expansion of an established plant or facility by adding to the building, production equipment, or support infrastructure; or

      3. (iii) Modernization of an established plant or facility through the replacement of production or processing equipment or support infrastructure that improves efficiency or productivity.

    2. (B) “Project costs” does not include:

      1. (i) Expenditures for routine repair and maintenance that do not result in new construction or expansion;

      2. (ii) Routine operating expenditures;

      3. (iii) Expenditures incurred at multiple facilities; or

      4. (iv) The purchase or acquisition of an existing business unless:

        1. (a) There is sufficient documentation that the existing business was closed; and

        2. (b) The purchase of the existing business will result in the retention of the jobs that would have been lost due to the closure; and

  13. (13) “Sponsor” means a sole proprietor, partnership, corporation, limited liability company, or association taxable as a business entity, a nonprofit corporation, or a combination of these entities.


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