§ 15-4-2711 — Administration

(a) A person claiming an incentive under this subchapter is a "taxpayer" within the meaning of § 26-18-104 and is subject to all applicable provisions of that section. (b) Administration of § 15-4-2706(c) shall be under the Arkansas Tax Procedure Act, § 26-18-101 et seq., and the Independent Tax Appeals Commission Act, § 26-18-1101 et seq. (c) (1) All claims for sales and use tax refunds under § 15-4-2706(d) and (e) shall be filed annually with the Department of Finance and Administration within three (3) years from the date of the qualified purchase or purchases. (2) Claims filed after three (3) years from the date of the qualified purchase or purchases shall be denied. (d) (1) The time limitation for § 15-4-2706(d) and (e) for filing claims shall be tolled if: (A) A qualified business fails to pay sales tax on an item that was taxable; and (B) The applicable tax is subsequently assessed as a result of an audit by the department. (2) All claims for sales and use tax refunds relating to an audited purchase are entitled to a refund of interest paid on the amount of tax assessed on the audited purchase if a refund is approved for the purchase. (e) A qualified business shall reach the investment thresholds under § 15-4-2706 within four (4) years from the date of the approved financial incentive agreement. (f) (1) All claims for payroll rebate payments under § 15-4-2707 shall be certified to the department and shall be recertified annually thereafter during the term of the financial incentive agreement. (2) Failure to annually certify or recertify payroll figures and claim the rebate payment shall result in: (A) A ten-percent reduction of the earned rebate if not claimed within one (1) year from the end of the tax year in which the rebate was earned; (B) A one hundred percent (100%) forfeiture of the earned rebate if not claimed within two (2) years from the end of the tax year in which the rebate was earned; or (C) Termination of the financial incentive agreement if an initial certification has not been filed with the department within four (4) years after the date of the approved financial incentive agreement, unless the date has been extended by the Director of the Arkansas Economic Development Commission. (g) (1) If the annual payroll of the business applying for incentives under this subchapter is not met within two (2) years after signing the financial incentive agreement, the business may request in writing an extension of time to reach the required payroll threshold. (2) (A) If the director and the Secretary of the Department of Finance and Administration find that the qualified business has presented compelling reasons for an extension of time, the director may grant an extension of time not to exceed four (4) years from the effective date of the financial incentive agreement. (B) However, the extension on projects applying for incentives under § 15-4-2705 is limited to a two-year extension. (3) (A) If a qualified business fails to reach the annual payroll threshold required under the approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met. (B) If a qualified business fails to reach the annual payroll threshold required under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business or file a lawsuit to enforce the repayment provisions. (h) (1) If a qualified business fails to reach the investment threshold before the expiration of the four-year time limit, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the investment threshold was not met. (2) If a qualified business fails to reach the investment threshold of this subchapter under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the investment threshold has not been met or file a lawsuit to enforce the repayment provisions. (i) (1) If the annual payroll of a qualified business receiving incentives under this subchapter falls below the payroll threshold for qualification in a year subsequent to the year in which it initially qualified for the incentive, the incentives outlined in the financial incentive agreement shall be terminated unless a written application for an extension of incentives explaining why the payroll has fallen below the level required for qualification has been filed with and approved by the Arkansas Economic Development Commission. (2) The director and the secretary may approve the request for extension of time, not to exceed two (2) years, for the qualified business to bring the payroll back up to the requisite threshold amount and may approve the continuation of incentives during the period the extension is granted. (3) (A) If a qualified business fails to reach the payroll threshold before the expiration of the two (2) years or the time period established by a subsequent extension of time, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met. (B) If a qualified business fails to reach the payroll threshold required under an approved financial incentive agreement, the department has two (2) years to collect incentives previously received by the qualified business or file a lawsuit to enforce the repayment provisions. (j) (1) If a qualified business fails to reach the average hourly wage threshold for incentives under this subchapter as specified in an approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business for which the average hourly wage threshold has not been met. (2) If a qualified business fails to meet the hourly wage threshold, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the average hourly wage threshold has not been met or file a lawsuit to enforce the repayment provisions. (k) (1) Eligible businesses whose qualification depends on receiving either fifty-one percent (51%) or seventy-five percent (75%) of their sales revenue from out-of-state customers shall meet this requirement within three (3) years from the approval date of their financial incentive agreement. (2) (A) If the requirement under subdivision (k)(1) of this section is not met within three (3) years of the approved financial incentive agreement, the qualified business may request in writing an extension of time to reach the required sales threshold. (B) If the director finds that the qualified business has presented compelling reasons for an extension of time, the director may grant an extension of time not to exceed an additional two (2) years. (l) (1) If a qualified business fails to meet the out-of-state revenue requirements of this subchapter under the specified deadlines in the approved financial incentive agreement, the qualified business is liable for the repayment of all incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the sales threshold has not been met. (2) If a qualified business fails to meet the out-of-state revenue requirements, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the sales threshold has not been met or file a lawsuit to enforce the repayment provisions. (m) (1) If a qualified business fails to notify the department that the annual payroll of the qualified business has fallen below the payroll threshold for qualification for and retention of any incentive authorized by this subchapter, the qualified business is liable for the repayment of all incentives that were paid to the qualified business and that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met after it no longer qualified for the incentives. (2) If a qualified business fails to notify the department that the qualified business has fallen below the payroll threshold, the department has two (2) years to collect incentives previously received by the qualified business that were conditioned on the approved financial incentive agreement for which the payroll threshold has not been met or file a lawsuit to enforce the repayment provisions. (3) Interest shall also be due at the rate of ten percent (10%) per annum. (n) (1) For a qualified business taking advantage of one (1) or more of the investment incentives offered in § 15-4-2706 , if the project costs exceed the initial project cost estimate included in the approved financial incentive agreement, the qualified business shall submit an amended project plan to include updated cost figures as soon as the cost overrun is recognized. (2) (A) An amendment that exceeds twenty-five percent (25%) of the original financial incentive agreement estimate shall not be approved and shall be submitted as a new project. (B) An amendment shall not change the start date of the original project. (o) (1) The department may obtain whatever information is necessary from a qualified business and from the Division of Workforce Services to verify that a qualified business is complying with the terms of the financial incentive agreements and reporting accurate information concerning investments, payrolls, wages, and out-of-state revenues to the department. (2) The department shall provide the information obtained under subdivision (o)(1) of this section to the director upon request by the director. (p) The department may file a lawsuit in the Pulaski County Circuit Court or the circuit court in any county where a qualified business is located to enforce the repayment provisions of this subchapter. (q) (1) If a qualified business fails to satisfy or maintain any other requirement or threshold of this subchapter, the qualified business is liable for the repayment of all incentives that were paid to the qualified business after it no longer qualified. (2) If a qualified business fails to comply with the requirements or thresholds of this subchapter, the department has two (2) years to collect incentives previously received by the qualified business for noncompliant financial incentive agreements or file a lawsuit to enforce the repayment provisions. (r) If a repayment is required as a result of not complying with the requirements or thresholds of this subchapter, interest shall be due at the rate of ten percent (10%) per annum.

Legislative History

Amended by Act 2021, No. 593,§ 1, eff. 1/1/2023. Amended by Act 2019, No. 327,§ 1, eff. 7/24/2019. Amended by Act 2019, No. 910,§ 417, eff. 7/1/2019. Amended by Act 2019, No. 910,§ 416, eff. 7/1/2019. Amended by Act 2019, No. 910,§ 415, eff. 7/1/2019. Acts 2003, No. 182, § 1; 2005, No. 1296, §§ 9-12; 2009, No. 625, § 2; 2009, No. 716, § 12.