Stricken language would be deleted from and underlined language would be added to present law.
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State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1216 3
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By: Representative Long 5
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For An Act To Be Entitled 8
AN ACT TO CREATE THE FREE MARKET ZONES ACT; TO 9
PROVIDE TAX INCENTIVES FOR BUSINESS ENTITIES LOCATED 10
IN AN OPPORTUNITY ZONE; TO EXEMPT A BUSINESS LOCATED 11
IN AN OPPORTUNITY ZONE FROM THE INCOME TAX, THE 12
CORPORATE FRANCHISE TAX, AND THE ELECTIVE PASS -13
THROUGH ENTITY TAX; AND FOR OTHER PURPOSES. 14
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Subtitle 17
TO CREATE THE FREE MARKET ZONES ACT; AND 18
TO EXEMPT A BUSINESS LOCATED IN AN 19
OPPORTUNITY ZONE FROM THE INCOME TAX, 20
THE CORPORATE FRANCHISE TAX, AND THE 21
ELECTIVE PASS-THROUGH ENTITY TAX. 22
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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24
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SECTION 1. DO NOT CODIFY. Title. 26
This act shall be known and may be cited as the "Free Market Zones 27
Act". 28
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SECTION 2. Arkansas Code Title 26, Chapter 51, Subchapter 3, is 30
amended to add an additional section to read as follows: 31
26-51-317. Business located in opportunity zone — Definition. 32
(a) As used in this section, “opportunity zone” means a population 33
census tract located in Arkansas that is designated as a qualified 34
opportunity zone under 26 U.S.C. § 1400Z -1, as of January 1, 2019. 35
(b) There is allowed an exemption from the income tax imposed by this 36 HB1216
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chapter for a business entity that is: 1
(1) Located in an opportunity zone; and 2
(2) Required to file a corporate income tax return under this 3
chapter. 4
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SECTION 3. Arkansas Code § 26 -51-460 is repealed. 6
26-51-460. Opportunity zones — Definition. 7
(a) Except as provided in subsection (b) of this section, 26 U.S.C. § 8
1400Z-2, as in effect on January 1, 2018, regarding opportunity zones, is 9
adopted for the purpose of computing Arkansas income tax liability. 10
(b) As used in this section and for purposes of the adoption of 26 11
U.S.C. § 1400Z-2, “opportunity zone” means a population census tract located 12
in Arkansas that is designated as a qualified opportunity zone under 26 13
U.S.C. § 1400Z-1, as of January 1, 2019. 14
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SECTION 4. Arkansas Code § 26 -54-102(b), concerning the entities that 16
are not included in the definition of "corporation" under the Arkansas 17
Corporate Franchise Tax Act of 1979, is amended to add an additional 18
subdivision to read as follows: 19
(4) A business entity that is: 20
(A) Located in an opportunity zone, as defined in § 26 -51-21
317; and 22
(B) Required to file a: 23
(i) Corporate income tax return under the Income Tax 24
Act of 1929, § 26-51-101 et seq.; or 25
(ii) A tax return under the Elective Pass -Through 26
Entity Tax Act, § 26 -65-101 et seq. 27
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SECTION 5. Arkansas Code Title 26, Chapter 65, Subchapter 1, is 29
amended to add an additional section to read as follows: 30
26-65-109. Exemption for business located in opportunity zone — 31
Definition. 32
(a) As used in this section, “opportunity zone” means a population 33
census tract located in Arkansas that is designated as a qualified 34
opportunity zone under 26 U.S.C. § 1400Z -1, as of January 1, 2019. 35
(b) There is allowed an exemption from the tax imposed by this chapter 36 HB1216
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for a business entity that is: 1
(1) Located in an opportunity zone; and 2
(2) Subject to the tax levied under this chapter. 3
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SECTION 6. EFFECTIVE DATE. Sections 1 -5 of this act are effective for 5
tax years beginning on or after January 1, 2025. 6
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