Credit granted

(a)(1) A taxpayer may be granted an Arkansas corporate income tax credit or Arkansas individual income tax credit for donations and sales of new machinery and equipment, or both, to a qualified educational institution in connection with a qualified education program or a qualified research program.

(2) The amount of the credit to a taxpayer shall be thirty-three percent (33%) of the:

(A) Cost of the machinery and equipment donated for new machinery and equipment;

(B) Amount by which the cost is reduced for below-cost machinery and equipment; and

(C) Cash donation used by the educational institution to purchase new machinery and equipment from a wholesale, retail, or manufacturing business.

(b) A taxpayer may be granted an Arkansas corporate income tax credit or Arkansas individual income tax credit equal to thirty-three percent (33%) of the qualified research expenditures of a taxpayer in a qualified research program.
(c)(1) A taxpayer may be granted an Arkansas corporate income tax credit or Arkansas individual income tax credit equal to thirty-three percent (33%) of the donation (whether of machinery or equipment, sale below costs, or cash) made to an accredited higher education institution to support a research park authority.

(2) This donation must also directly or indirectly support research funded by one (1) or more of the following federal agencies:

(A) The National Science Foundation;

(B) The National Institutes of Health;

(C) The United States Department of Energy;

(D) The United States Department of Defense;

(E) The United States Environmental Protection Agency;

(F) The National Aeronautics and Space Administration;

(G) The United States Department of Agriculture;

(H) The United States Department of Transportation;

(I) The United States Department of Commerce;

(J) The United States Department of Education; and

(K) The United States Department of Homeland Security.

(d) Tax credits are allowed for up to one hundred percent (100%) of the net tax liability of the taxpayer after all other credits and reductions in tax have been calculated.
(e)(1) The credit must be claimed in the tax year that the qualified research expenditure, donation, or sale was made.

(2) All or part of any unused credit may be carried forward to the next succeeding tax year and annually thereafter for a total period of nine (9) years succeeding the year in which the credit was earned or until the credits are exhausted, whichever occurs first.

(f) A taxpayer awarded any tax credit under this program for any expense or contribution may not take a deduction under the Arkansas income tax law for the same expense or contribution.

(g) Tax credits issued under this program may not be sold or transferred.