Wetland and Riparian Zones
Tax Credit Program
What is the purpose
of this program?
This program, created by the Arkansas
Private Wetland Riparian Zone Creation and Restoration Incentive Act of
1995, allows a credit against the tax imposed by the Arkansas Income Tax
Act for any taxpayer engaged in the development or restoration of wetlands
and riparian zones. The program is designed to encourage private landowners
to restore and enhance existing wetlands and riparian zones, and when possible,
create new wetlands and riparian zones because the state continues to experience
significant loss of wetlands, and because most land suitable for wetlands
are privately owned. This program benefits the landowners through tax credits
and the state by increasing wetlands and riparian zones, which provide
flood control, water quality enhancement, fish and wildlife habitat, recreation
and ground water recharge.
Who is responsible
for administering the program and carrying out the rules?
The Executive Director of the
Arkansas Natural Resources Commission administers the Wetland/Riparian
Tax Credit Program in consultation with the Private Lands Restoration Committee.
Is there a fee involved?
Yes, the fee for enrollment is
three percent (3%) of the total approved tax credit (minimum of $100) to
be paid to the commission by the landowner when the application is filed.
If a project is rejected the full application fee will be refunded.
When can tax credits
be applied?
The tax credit provided under
the act may be applied to taxable years beginning on or after January 1,
1996 and all taxable years thereafter.
Are there any restrictions
to collecting tax credit in this program?
Yes, taxpayers claiming a tax
credit under this act may not claim a credit under the Water Resources
Conservation and Development Incentives Act of 985, or any similar act
for any costs related to the same project. Any portion of a project that
is a mitigation activity required under state or federal law if not eligible
for tax credits. Tax credits issued to partnerships or other corporate
entities may pass through to their members, managers, partners, shareholders
and/or other beneficiaries, but are not transferable to other individuals
or entities.
How much credit
may a taxpayer use?
The amount of credit that may
be used for a taxable year may not exceed the lesser of the amount of individual
or corporate income tax otherwise due or five thousand dollars ($5,000)
per taxpayer. Any unused credit may be carried over for nine years after
the year the credit originated for a total tax credit of $50,000 per project.
Are there specific
requirements related to project development and operation?
Yes. General requirements
specify that projects must be completed, and functioning in three years,
and maintained for a minimum of ten years after certified as being complete.
Taxpayers must maintain records, provide notification of project completion/maintenance,
etc.
Specific criteria indicate what costs are eligible for credit, such
as procurement of professional services required for project development
and maintenance, and for activities that are considered creation, restoration
or improvement are eligible for tax credit. Criteria detail activities
in Riparian Zones and Wetlands, and include such things as site preparation,
establishment of permanent vegetative cover, construction of exclosures,
bank stabilization end erosion control, construction of berms, water control
structures, and other activities.
Are there any design
standards requirements?
Yes. Project activities
have to meet or exceed the standards established in the program rules and
regulations, and structural aspects of the project must be reviewed by
a professional engineer prior to filing an application.
General standards, such as minimizing soil erosion and water degradation
during construction, utilization of Best Management Practices, and complying
with all applicable federal, state and local laws have been established
for all projects. In addition to the general standards required for all
projects, standards specific to projects in riparian zones and wetlands
have been established.
What happens if
the taxpayer fails to complete installation?
If the taxpayer fails to complete
the project as a result of conditions beyond his control, the project may
be extended for one year. All credits received must be repaid if the taxpayer
fails to complete the project within the specified period under any other
circumstances. Additionally, the project will no longer be authorized for
tax credit purposes and further credits will not be allowed. Other conditions
may apply for projects terminated prior to expiration of minimum life of
the project, projects determined to have been terminated without receipt
of written notice, or upon sale of the real estate involved in the project.
Any failure of the taxpayer to comply with the filing and required repayment
of taxes will result in an assessment by the Department according to the
Tax Procedures Act.
APPLICATION
FORMS : Download
a copy of the riparian tax credit forms in Adobe Acrobat format.
Contact: Kenneth Colbert, Environmental
Program Manager
Arkansas Natural Resources Commission
101 East Capitol Avenue, Suite 350
Little Rock, AR 72201
Phone: (501) 682-1608 Fax (501) 682-3991
E-mail:
kenneth.colbert@arkansas.gov
ANRC Homepage
