Arkansas policymakers are preparing for a pivotal 2026 fiscal session, set to convene at noon on April 8, with pre-filing of appropriation bills beginning March 9. As lawmakers gather to address budget priorities, several significant tax policy changes are poised to reshape the state’s economic landscape. Recent legislation enacted in 2025 introduces new corporate incentives, expands sales and use tax exemptions for large-scale data centers, and modernizes Arkansas’ corporate income tax sourcing and nexus standards. Together, these measures signal a continued emphasis on economic development, competitiveness, and alignment with broader national tax trends.
Next Session:
The Bureau of Legislative Research’s official calendar states that the 2026 fiscal session of the Arkansas General Assembly will convene at noon on Wednesday, April 8, 2026. Pre‑filing of appropriation bills begins March 9th. The session is scheduled to adjourn Thursday, May 7th.
Recent Updates to Tax Code:
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- Corporate headquarters relocation credit (Act 881 / HB 1922) – Creates a new corporate headquarters relocation credit under the Consolidated Incentive Act. For projects approved by the Arkansas Economic Development Commission (AEDC), a relocating company may claim a tax credit up to 10 % of the total project cost and may offset up to 50 % of its income or sales tax liability per year. Unused credits carry forward nine years. The act is effective for tax years beginning January 1, 2026.
- Data‑center sales and use tax exemption (Act 548 / HB 1444) – Establishes an exemption for purchases of data‑center equipment, eligible facility costs, services, and electricity by qualified large data centers. A qualified large data center must invest at least $2 billion within 10 years, maintain $3 million in annual payroll, and not primarily engage in crypto‑asset mining. The Department of Finance and Administration (DFA) notes the exemption became effective Oct. 1, 2025.
- Market‑based sourcing and economic nexus (Act 719 / SB 567) – Arkansas rewrote its corporate apportionment rules. Beginning tax years starting Jan. 1, 2026, sales other than sales of tangible goods must be sourced to Arkansas if the property or service is delivered or used in the state; intangible property used for marketing is considered used in Arkansas if the consumer is in Arkansas. Telecommunications and similar service providers may elect to retain cost‑of‑performance sourcing until Dec. 31, 2035. A non‑resident corporation with no physical presence is now subject to Arkansas income tax when its Arkansas receipts exceed $250,000 in the current or prior tax year. These changes aim to align Arkansas with other market‑based states and broaden corporate tax nexus.
Amendments To Watch:
SJR 15 (Economic Development) – Places a constitutional amendment on the 2026 ballot to allow municipalities and counties to create economic development districts, freeze property and sales tax levies within those districts, and issue bonds to finance improvements. Voters will decide in November 2026.
With major tax reforms taking effect in 2026 and a proposed constitutional amendment on economic development districts heading to voters in November, Arkansas stands at an important inflection point in its fiscal and economic policy. Businesses operating in or considering investment in the state should closely monitor implementation guidance and legislative activity during the upcoming session. The decisions made in 2026 will not only shape Arkansas’ revenue framework but also define its competitive posture in attracting capital investment, corporate headquarters, and large-scale infrastructure projects for years to come. If you need further support, Advantous is equipped with state and local tax experts ready to assist you and your business needs. Reach out to info@advantous.com for more information.