Arkansas · research and development · AR-RD-002
AR-RD-002
Publication revised September 24, 2026. Sourcebook page 43.
Credit amount / calculation
33% of approved qualified research expenditures, limited to $50,000 per tax year.
Business fit and eligible activity
Potentially larger research credit for a project certified as strategically valuable. Qualified research activity. Ordinary production, routine quality control and an equipment purchase alone do not qualify.
Eligibility and practical use
Eligible research can take place at a wood-products business. The credit applies to qualifying research expenses, not the purchase price of production equipment. Obtain approval for the research project and document the work and eligible costs.
Illustrative business benefit
$200,000 of approved expenses x 33% = $66,000 before the cap. The annual claim is limited to $50,000; confirm the treatment of any unused certified credit under the nine-year carryforward rules.
Timing / first action
Seek approval before signing a purchase order, contract, lease or other binding commitment. Confirm the exact point at which a purchase order, contract, lease, or other binding commitment would make the project ineligible.
Official sources
Related programs
Advantage Arkansas Income Tax Credit
Credit based on new qualifying payroll at the applicable
Job-creation credit for qualifying businesses, including manufacturers, with thresholds varying by location.
Apprenticeship Tax Credit
Per-apprentice credit subject to certification
Registered apprenticeship can create a modest credit for forest-products employers.
ArkPlus Income Tax Credit
Generally
Large qualifying manufacturing expansions can receive a credit based on qualified investment after a financial-incentive agreement.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.
Rehabilitation Credit (Internal Revenue Code §47)
Generally
A forest-products company rehabilitating a certified historic mill or industrial building for income-producing use may qualify.