Wetlands and riparian zones provide significant benefits to Arkansans, including flood control, water quality enhancement, fish and wildlife habitat, recreational opportunities, and groundwater recharge. The Arkansas Wetland and Riparian Zone Creation, Restoration, and Conservation Tax Credits Act allows a state income tax credit to be taken by taxpayers who engage in the development, restoration, or conservation of wetland and riparian zones through projects approved by the Arkansas Department of Agriculture. The program promotes increased biological and ecological integrity through voluntary restoration or conservation of Arkansas’s important environmental landscapes.
What kind of projects & activities qualify for the tax credit program? Projects that restore and improve riparian zones, create wetlands, or conserve riparian habitat are generally eligible, pending approval by the Department before project activities occur. Examples include:
- Procurement of professional services for site development & project maintenance
- Site preparation
- Establishment of permanent vegetation
- Stream bank stabilization and erosion control
- Construction of berms
- Installation of water control structures
Specific eligibility criteria are outlined in Title XIII rules. Credits are limited to actual “out-of-pocket” expenses.
Are there restrictions? Yes. Projects required as part of mitigation under state or federal law are not eligible. Taxpayers cannot claim credits for the same project under both this program and the Water Resources Conservation Development Incentives Act of 1985. Credits only apply to actual taxpayer-incurred costs.
Who determines project eligibility? The Department must approve all projects before tax credits can be claimed.
Who is eligible? Any taxpayer—individual, partnership, LLC, S Corporation, or Corporation—whose project is certified and approved by the Department.
Maximum Tax Credit:
- Up to $50,000 per project
- No more than $5,000 may be claimed in any one tax year, over a maximum of 10 years
- The maximum credit is limited to actual project costs if less than $50,000
How to Apply: Submit a completed application and an administrative fee (3% of the total estimated project cost) to the Department. Instructions and details are outlined in Title XIII. Agency staff are available to assist.
What happens after application submission?
- The Department reviews the application
- A staff member schedules a preconstruction site visit
- If eligible, the applicant receives a Certificate of Tax Credit Approval and may proceed with the project
Project Completion Timeline: Projects must be completed within three years of the Certificate of Tax Credit Approval.
After Completion:
- Contact the Department for a final inspection
- Submit receipts for all qualified project expenses
- Once verified, a Certificate of Project Completion is issued
- This certificate must be filed with the next tax return, regardless of whether a credit is claimed that year
Project Maintenance: Approved projects must be maintained for at least 10 years after completion, as verified by the Department.
When to Claim the Credit: Credits may be claimed the same year the Certificate of Tax Credit Approval is issued. If delayed, the certificate must be included with the first return claiming the credit.
Forms
Program Contact: Zoie Autrey
Email: [email protected]
Phone: (501) 682-3909