§ 26-51-1505 - Credits granted. - Arkansas Statutes

26-51-1505. Credits granted.

(a) There shall be allowed a wetland and riparian zone creation and restoration tax credit against the tax imposed by the Income Tax Act of 1929, 26-51-101 et seq., in an amount as determined in subsection (c) of this section for any taxpayer engaged in the creation or restoration of wetlands and riparian zones.

(b) There shall be allowed a wetland and riparian zone conservation tax credit against the tax imposed by the Income Tax Act of 1929, 26-51-101 et seq., in an amount as determined in subsection (c) of this section for any eligible donor who donates a qualified real property interest for a qualified conservation purpose to an eligible donee.

(c) (1) The amount of the wetland and riparian zone creation and restoration tax credit allowed under subsection (a) of this section shall be equal to the project cost incurred in the creation or restoration of wetlands and riparian zones and shall not exceed fifty thousand dollars ($50,000).

(2) The amount of the wetland and riparian zone conservation tax credit allowed under subsection (b) of this section shall equal fifty percent (50%) of the fair market value of the qualified real property interest donation calculated to exclude any short term capital gain under 26 U.S.C. 170(e)(1)(A), as in effect on January 1, 2009, and shall not exceed fifty thousand dollars ($50,000).

(3) (A) The amount of the tax credit under this subchapter that may be used by a taxpayer for a taxable year may not exceed the lesser of:

(i) The amount of individual or corporate income tax otherwise due; or

(ii) Five thousand dollars ($5,000).

(B) Any unused tax credit under this subchapter may be carried over for a maximum of nine (9) consecutive taxable years following the taxable year in which the tax credit originated.

(C) Any unused tax credit under this subchapter shall survive the death of an individual taxpayer and may be used by the individual taxpayer's estate, subject to the limitations in this subdivision (c)(3).

(4) Tax credits under this subchapter may only be used by the taxpayer certified to earn a tax credit to offset the taxpayer's state income tax liability and are nontransferable.

(5) (A) Only one (1) wetland and riparian zone conservation tax credit may be earned per qualified real property interest donation.

(B) If the qualified real property interest is held in common ownership, the wetland and riparian zone conservation tax credit shall be allocated in proportion to each respective ownership share.

(C) If the qualified real property interest is held by a pass-through entity, the wetland and riparian zone conservation tax credit shall be allocated as prescribed under 26 U.S.C. 704(b), as in effect on January 1, 2009, and corresponding regulations in 26 C.F.R. 1.704-1(b)(4)(ii), as in effect on January 1, 2009.

(6) An eligible donor may earn only one (1) wetland and riparian zone conservation tax credit per income tax year.

(d) To claim the benefits of this section, a taxpayer must obtain a certification from the Arkansas Natural Resources Commission certifying to the Revenue Division of the Department of Finance and Administration that the taxpayer has met all the requirements and qualifications set forth in 26-51-1504(b)(2) and 26-51-1507(a) for a wetland and riparian zone creation and restoration tax credit or 26-51-1507(b) for a wetland and riparian zone conservation tax credit.

(e) The division shall promulgate such rules and regulations as may be deemed necessary to carry out the tax credit provisions of this subchapter.