Economic Development Legislation

Arkansas has a pro-business government working to make it easier for companies to expand, locate, relocate, and thrive within the state.

The Arkansas legislature recently passed several laws that encourage economic development. The collective package of legislation promoted by the Arkansas Department of Commerce, in collaboration with many partners, is known as IMPACT – or Improving Markets, Promoting Arkansas Commerce and Trade. Below is a breakdown of the economic development legislation that was passed in the 2025 legislative session.

Modernization and Automation Incentive (Act 882 of 2025)

The Modernization and Automation Tax Credit is designed to encourage investment from existing businesses in Arkansas. Companies that have operated in Arkansas for at least two years must incur at least $25 million in investment costs, and they can be eligible for up to five percent of eligible project costs.

Data Center Incentive (Act 548 of 2025)

 

This legislation amends the sales and use tax emption for qualified data centers in Arkansas to support the purchase of data center equipment and other eligible data center costs.

 

Lithium Industry Incentive (SB 568)

 

Under this legislation, Arkansas would create a sales and use tax exemption for lithium resource development for eligible firms that have invested at least $100 million in the state. It also amends the state’s laws on the severance tax rate.

 

Corporate Headquarter Relocation Incentive (Act 881 of 2025)

 

With this legislation, AEDC can offer a tax credit of up to 10 percent for companies that relocate their corporate headquarters to Arkansas. Arkansas is a business-friendly state, and we look forward to encouraging companies to shift their corporate HQs to our state with either an income tax credit or a sales and use tax credit of up to 10 percent of total eligible project costs.

 

Small Business Innovation Research Program Reform (Act 440 of 2025)

 

The legislature has reformed the Arkansas Small Business Innovation Research Matching Grant Program, which will improve the program for Arkansas entrepreneurs and researchers. Our state is committed to encouraging innovation – making this an important step in fostering research and development.

 

Industrial Development Authorities (Act 576 of 2025)

 

Act 576 will enable the creation of industrial development authorities , which are public benefit corporation established to help secure economic development projects and develop industry in a given area. Establishing industrial development authorities is designed to help increase job creation and make Arkansas more economically competitive.

 

Economic Development Districts (SJR 15)

 

This legislation would authorize the creation of economic development districts, which could issue bonds for the purpose of financing projects within that district. SJR15 is a constitutional amendment that will be voted on by the people of Arkansas in 2026.

 

Generating Arkansas Jobs Act of 2025 (Act 373 of 2025)

 

This legislation reforms our state’s regulatory framework, enabling them to make strategic investments to support the growth of energy production in Arkansas. The Generating Arkansas Jobs Act will play an important role in ensuring that Arkansas has reliable electric and natural gas utility services, which will make Arkansas more competitive for economic development projects.