26 CAR pt. 67 | 26 CAR Part 67 — Tuition Reimbursement Tax Credit Program, Acts 1999, No. 1036

Chapter I

Subchapter C

Subpart 1

26 CAR § 67-101 Intent {#sec-26-car-67-101 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-101}

26 CAR § 67-101. Intent.

It is the intent of the tuition reimbursement tax credit program that the:

(1) Eligible company's arrangement with its employee requires the employee to complete the employee's financial arrangement with the school for the payment of the employee's tuition, books, and fees at the beginning of the course; and

(2) Company reimburses the employee after the employee completes the course to the satisfaction of the company.

26 CAR § 67-102 Definitions {#sec-26-car-67-102 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-102}

26 CAR § 67-102. Definitions.

As used in this part:

(1) "Accredited institution of postsecondary education" means a school currently:

(A) Accredited by the North Central Association of Colleges and Schools; or

(B) Certified by the Division of Higher Education;

(2) "Computer businesses" grouped in subdivision (7)(B) of this section fall generally into the following SIC codes with the additional conditions that they derive at least sixty percent (60%) of their revenues from out-of-state sales and have no retail sales to the general public:

(A) 7371;

(B) 7372;

(D) 7375; and

(E) 7379;

(3) "Corporate or regional headquarters" means the home or center of operations, including research and development, of a national or multinational corporation with no retail sales to the general public;

(4)(A) "Digital content production" means companies engaged in the creation of a product that includes acquiring, modeling, and manipulating:

(i) Video imagery;

(ii) Film; and

(iii) Animation.

(B) These products are:

(i) Created in digital form; and

(ii) Eligible for copyrighting under the copyrighting laws of the United States.

(i) Broadcast television;

(ii) Corporate presentations;

(iii) Cable shows;

(iv) Advertising;

(v) Video games;

(vi) Movies; and

(vii) Themed entertainment outlets.

(D) For companies engaged in digital content production to be eligible for benefits under this program, they must:

(i) Derive at least sixty percent (60%) of their revenue from out-of-state sales; and

(ii) Have no retail sales to the general public;

(5)(A) "Digital preservation" means companies engaged in the transformation, storage, archiving, and/or distribution of various forms of media which have been transferred into a digital format.

(B) Media transformation into digital content may include:

(i) Film;

(ii) Video; or

(iii) Written materials.

(i) Derive at least sixty percent (60%) of their revenue from out-of-state sales; and

(ii) Have no retail sales to the general public;

(6)(A) "Distribution center" means a facility for the reception, storage, or shipping of a business' own products or products which the business:

(i) Wholesales to retail businesses; or

(ii) Ships to its own retail outlets.

(B) Distribution centers can have no retail sales to the general public;

(7) "Eligible company" means an entity currently operating in the State of Arkansas that is classified in one (1) of the following:

(A) Manufacturers classified in federal Standard Industrial Classification (SIC) codes 20-39, including semiconductor and microelectronic manufacturers;

(B)(i) Computer businesses primarily engaged in providing:

(a) Computer programming services;

(b) The design and development of prepackaged software;

(d) Computer processing and data preparation services;

(e) Information retrieval services; or

(f) Computer and data processing consultants and developers.

(ii) All businesses in this group must:

(a) Derive at least sixty percent (60%) of their revenue from out-of-state sales; and

(b) Have no retail sales to the general public;

(D)(i) Businesses primarily engaged in motion picture production.

(ii) All businesses in this group must:

(a) Derive at least sixty percent (60%) of their revenue from out-of-state sales; and

(b) Have no retail sales to the general public;

(E) Distribution centers with no retail sales to the general public;

(F) An office sector business with no retail sales to the general public;

(G) A corporate or regional headquarters with no retail sales to the general public; and

(H) A trucking/distribution terminal, as classified by SIC code 4231, with no retail sales to the general public;

(8) "Full-time permanent employee" means a person working at an eligible company who:

(A) Has been employed for at least twenty-six (26) consecutive weeks;

(B) Works at least thirty (30) hours per week; and

(9)(A) "Motion picture production company" means a company that produces any motion picture or portion thereof for display at theaters, video release, television shows, music videos, and special effects, titles, and credits, all of which are embodied on film or prepared for digital presentation.

(B) Motion picture production companies are generally a subset of those companies classified in SIC code 7812 and must:

(i) Derive at least sixty percent (60%) of their revenue from out-of-state sales; and

(ii) Have no retail sales to the general public;

(10) "No retail sales to the general public" means no walk-in, point-of-sale service to the general public;

(11)(A) "Office sector business" means control centers that influence the environment in which data processing, customer service, credit accounting, telemarketing, claims processing, and other administrative functions that act as production centers are performed.

(B) Office sector businesses can have no retail sales to the general public; and

(12)(A) "Trucking sector business" means a business that is classified within the federal Standard Industrial Classification (SIC) code number 4231.

(B)(i) This SIC code includes:

(a) Companies that operate terminal facilities used by highway-type property carrying vehicles; and

(b) Terminals which provide maintenance and service for motor vehicles.

(ii) It does not include terminals operated by motor freight transportation companies for their own use.

26 CAR § 67-103 Qualifications {#sec-26-car-67-103 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-103}

26 CAR § 67-103. Qualifications.

(a)(1) The program allows eligible companies to claim an income tax credit equal to thirty percent (30%) of the cost of tuition, books, and fees reimbursed by a company to a full-time permanent employee of the company after the employee has satisfactorily completed one (1) semester of undergraduate or postgraduate education at an accredited institution of postsecondary education located in Arkansas.

(2) Courses taken by an employee must be directly related to the company's business or industry.

(b) The program applies only to reimbursements paid by eligible companies to their employees after July 30, 1999, for courses taken by such employees after July 30, 1999.

(c)(1) The tax credit claimed by the company cannot exceed twenty-five percent (25%) of the company's income tax liability for the tax year in which the credit is taken.

(2) Unused credits cannot be:

(A) Carried forward;

(B) Carried backward; or

(3) The company's income tax credit must be claimed for the tax year in which reimbursement was actually paid to the employee.

(d) A company cannot claim both the tuition reimbursement tax credit under Acts 1999, No. 1036, and the training tax credit under Acts 1997, No. 1117 (the Biotechnology Act), for the same courses.

History

Codification Notes: Acts 1997, No. 1117, was codified at Arkansas Code § 2-8-101 et seq. Arkansas Code § 2-8-101 et seq., was repealed by Acts 2009, No. 716, § 1. Authorities: Arkansas Code § 19-1-208; Arkansas Code § 26-18-301

26 CAR § 67-104 Certification {#sec-26-car-67-104 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-104}

26 CAR § 67-104. Certification.

(a)(1) To qualify for the benefits of this program, a company must complete Form AR1036 listing:

(A) Each employee’s name for which tuition reimbursement payments were made during the tax year;

(B) The total amount reimbursed for tuition, fees, and books for each employee; and

(2) Form AR1036 must be fully completed and attached to the eligible company's tax return.

(b)(1) If the eligible company is a partnership, limited liability company, or Subchapter S corporation, additional information is required in Section C of Form AR1036.

(2) The total amount of the allowable tuition reimbursement credit will flow through to the members of the income tax pass-through entity (partnership, limited liability company, or Subchapter S corporation).

(3)(A) The credit should then be allocated to each member based upon that member's proportionate share of the entity's net income and loss.

(B) A member's proportionate share is generally equivalent to the member's percentage of ownership in the entity.

(4) A duplicate Form AR1036 must be:

(A) Produced for each member; and

(B) Included with each member’s tax return.

26 CAR § 67-105 Verification {#sec-26-car-67-105 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-105}

26 CAR § 67-105. Verification.

(a) Tuition reimbursement tax credit claims, including information relating to Form AR1036, are subject to verification by the Department of Finance and Administration, including verification by audit.

(b)(1) The employer is responsible for maintaining records adequate to substantiate the employer's tuition reimbursement tax credit claim.

(2) These records must include clear proof that:

(A) The employees for whom credit is being claimed actually paid for:

(i) Tuition;

(ii) Books; and

(iii) Fees; and

(B) Such employees were actually reimbursed for those expenses by the employer.

26 CAR § 67-106 Additional information {#sec-26-car-67-106 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-106}

26 CAR § 67-106. Additional information.

For additional information, contact:

Mailing address: Arkansas Department of Finance and Administration Tax Credits and Special Refunds P.O. Box 8054, Room 2370 Little Rock, Arkansas 72203-8054

Delivery address: Tax Credits and Special Refunds Joel Y. Ledbetter Building, Room 2370

Little Rock, Arkansas 72201

26 CAR pt. 67, Appendix A AR1036 Tax Credit Documentation - Tuition Reimbursement Tax Credit Program {#sec-26-car-pt.-67-appendix-a omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR pt. 67, Appendix A}

AR1036 TAX CREDIT DOCUMENTATION Tuition Reimbursement Tax Credit Program

Section A. Tax Year Beginning _______________ and Ending _______________

Name of entity:________________________________________________________________

Address:_____________________________________________________________________

City, State, Zip Code:___________________________________________________________

FEIN/SSN:___________________________________________________________________

SIC CODE:___________________________________________________________________

Eligibility category (see backside, enter a letter A through H) ______________________.

If category "B" or "D", enter the percentage of your total Sales that are outside the State of Arkansas ______________________.

OWNERSHIP OF BUSINESS

 Individual  Partnership (Complete Section C)

 Taxable Corporation  LLC (Complete Section C)

 Fiduciary  Subchapter-S (Complete Section C)

Section B.

Employee's Name* Tuition, books, & fees For Term Ending reimbursed to employee ($) ______________ (date)

Total Amount Reimbursed ______________________

Total Tax Credit = (total amount reimbursed x (0.30) = ____________________

*If more space is needed for employees' names, attach addition sheet(s) and enter the total amount reimbursed for all employees in the space immediately above.

Section C.

Owner's Name* Percentage of Social Security Proportionate Ownership Number Share of Credit*

*The credit should be allocated to each member based upon that member's share of the entity's net income and loss. A member 's proportionate share is generally equivalent to the member's percentage of ownership in the entity.

Eligibility Categories.

(A) Manufacturers classified in Federal Standard Industrial Classification (SIC) codes 20-39, including semiconductor and microelectronic manufacturers;

(B) Computer businesses primarily engaged in providing computer programming services; the design and development of prepackaged software; businesses engaged in digital content production and digital preservation; computer processing and data preparation services; information retrieval services; computer and data processing consultants and developers. All businesses in this group must derive at least sixty percent (60%) of their revenue from out of state sales and have no retail sales to the general public;

(D) Businesses primarily engaged in motion picture production. All businesses in this group must derive at least 60% of their revenue from out of state sales and have no retail sales to the general public;

(E) Distribution centers with no retail sales to the general public;

(F) An office sector business with no retail sales to the general public;

(G) A corporate or regional headquarters with no retail sales to the general public and;

(H) A trucking/distribution terminal, as classified by SIC code 4231, with no retail sales to the general public.

26 CAR Part 67 — Tuition Reimbursement Tax Credit Program, Acts 1999, No. 1036

Chapter I

Subchapter C

Subpart 1

26 CAR § 67-101 Intent {#sec-26-car-67-101 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-101}

26 CAR § 67-102 Definitions {#sec-26-car-67-102 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-102}

26 CAR § 67-103 Qualifications {#sec-26-car-67-103 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-103}

26 CAR § 67-104 Certification {#sec-26-car-67-104 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-104}

26 CAR § 67-105 Verification {#sec-26-car-67-105 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-105}

26 CAR § 67-106 Additional information {#sec-26-car-67-106 omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR § 67-106}

26 CAR pt. 67, Appendix A AR1036 Tax Credit Documentation - Tuition Reimbursement Tax Credit Program {#sec-26-car-pt.-67-appendix-a omnilex-key=us-ar-regs-official--title-26-part-67--26 CAR pt. 67, Appendix A}

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