Arkansas · Forest-Specific / Biomass · AR-WOOD-001
Arkansas Wood Energy Products and Forest Maintenance Credit
Publication revised September 24, 2026. Sourcebook page 40.
Credit amount / calculation
20% of qualifying wood-energy equipment costs for tax years beginning January 1, 2026 or later; certification and an incentive agreement are required.
Business fit and eligible activity
Rare forest-specific credit for very large projects producing qualifying wood-energy products from forest residues. Qualifying production, feedstock or energy technology; ordinary wood residuals are not automatically eligible.
Eligibility and practical use
Act 709 raises the new-project threshold to investment exceeding $1 billion and at least 400 net new employees averaging $60,000 annually. Qualifying expansion projects have separate rules. Highway-licensed vehicles and trailers are excluded; other mobile equipment still must meet the exclusive-use and project tests.
Illustrative business benefit
Within an otherwise qualifying, state-certified project, $10 million of eligible equipment produces a nominal $2 million credit at 20%. A $10 million standalone project does not satisfy the new-project investment threshold.
Timing / first action
Seek approval before signing a purchase order, contract, lease or other binding commitment. Confirm whether the project qualifies under the new-project or expansion-project definition before applying the 20% rate.
Official sources
- arkleg.state.ar.us — Arkansas Act 709 of the Regular Session (2025) (arkleg.state.ar.us)
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.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Clean Fuel Production Credit (Internal Revenue Code §45Z)
Per-gallon or gallon-equivalent credit based on the
Potentially relevant only if a forest-products business actually produces qualifying transportation fuel.