Arkansas House Bill HB1935

Arkansas 2025 Regular Session

• Introduced: 3/31/25
• Refer: 3/31/25
• Report Pass: 4/7/25
• Engrossed: 4/9/25
• Refer: 4/9/25
• Report Pass: 4/10/25
• Enrolled: 4/15/25
• Chaptered: 4/17/25
• Passed: 4/17/25

Caption

To Create A Modernization And Automation Tax Credit To Encourage Investment By Existing Businesses Within The State.

Impact

If enacted, HB1935 would have significant implications for Arkansas law, particularly concerning tax incentives for businesses. The bill outlines specific qualifications for businesses seeking these tax credits, including requirements for operational duration, minimum investment thresholds, and the necessity of obtaining prior approvals. The tax credit can be as high as 5% of eligible project costs, thus providing substantial financial relief to qualifying businesses looking to modernize their operations.

Summary

House Bill 1935 aims to amend the Consolidated Incentive Act of 2003 by creating a new tax credit specifically for modernization and automation investments by existing businesses within Arkansas. The intent of this bill is to stimulate economic growth by encouraging businesses to invest in updated equipment and technologies, thereby improving efficiency and competitiveness. By offering these financial incentives, the state hopes to not only retain existing businesses but also attract new investments from outside the state.

Sentiment

The general sentiment surrounding HB1935 appears to be positive, particularly among business advocates and economic development supporters who view the modernization tax credit as a viable strategy to boost local economies. However, there are also concerns about the potential costs to the state budget and whether these tax credits would truly yield the desired economic benefits or merely serve to subsidize businesses that would have invested without such incentives.

Contention

Notable points of contention include the criteria for eligibility and the cap on the amount of tax credits distributed in a given fiscal year. Some legislators worry that the specified thresholds for investment could exclude smaller businesses that may also be in need of modernization assistance. Additionally, the provisions preventing the combination of this new credit with existing tax credits may restrict overall aid for business improvements, leading to debates about fairness and effectiveness in assisting businesses of varied sizes and sectors.