Voluntary cancellation at the lesser of face value or purchase price

(a) Under Arkansas Code § 15-5-1406(a), the tax credit may be used to reduce a taxpayer's Arkansas income tax liability.

(b) As an alternative to offset payment of reported state income tax liability, a registered holder of a Tax Credit Certificate purchased through the DIG may deliver, in conjunction with the filing of its state income tax return, to the Revenue Division of the Department of Finance and Administration for voluntary cancellation its original certificate along with evidence of the purchase price paid for the tax credit (the "purchase price").

(c) The division will:

(1) Match the delivered certificate with the copy in its files; and

(2) Notify the DIG that the Tax Credit Certificate has been surrendered.

(d) The DIG shall:

(1) Verify the purchase price; and

(2) Notify the division of the registered holder's tax year for which the tax credit may be claimed.

(e) Discrepancies will be addressed in writing or by electronic mail (email) between the division and the DIG.

(f) The division shall:

(1) Cancel the surrendered certificate; and

(2) Treat the lesser of the purchase price or the face value of the Tax Credit Certificate as a payment of state income tax.

(g) Tax credits voluntarily cancelled shall be claimed on a state tax return as a tax payment in the amount of the lesser of the:

(1) Purchase price; or

(2) Face value of the Tax Credit Certificate.
(h)(1) Tax payments (including the lesser of the purchase price or the face value of the Tax Credit Certificate as a tax payment) which in total exceed net tax liabilities give rise to a refund, provided that the refund may not exceed the amount of tax payments, excluding the Tax Credit Certificate as a payment.

(2) See 26 CAR § 66-105, above.