Arkansas Groundwater Conservation Tax Credit Program

Arkansas gives state income tax credits for projects that cut groundwater use: building water impoundments, converting irrigation from groundwater to surface water, and agricultural land leveling. Credits run 25–50% of project cost, up to $18,000 a year with 15-year carryover. Projects must be approved before construction and kept in place for 10 years.

• Individuals and entities that invest in qualifying projects: impoundments (at least 20 acre-feet), groundwater-to-surface-water conversion, agricultural land leveling to conserve irrigation water

• Higher conversion credit inside designated critical groundwater areas

• Must not begin construction before final approval; maintain project 10 years after the Certificate of Completion or credits may be recaptured

State income tax credit, 25–50% of cost; $18,000/yr cap for agricultural users; 15-year carryover; 10-year maintenance; optional tax deduction for cost above the credit.

Published amounts: Impoundments of at least 20 acre-feet: 50 percent of project cost. Conversion from groundwater to surface water: 25% outside / 50% inside a critical groundwater area; maximum tax credit amount for conversion is $35,000. Agricultural land leveling: 25%. The maximum credit in one taxable year is the lesser of the taxpayer's income tax due or $18,000 ($200,000 for industrial/commercial conversions in critical areas). Unused credit carries over up to 15 years. Fee: 3% of the approved credit (minimum $100, maximum $1,500).

Submit your application to your local Conservation District; after district approval the Arkansas Natural Resources Commission reviews it; pay the fee (3% of approved credit, $100–$1,500). File the Certificate of Completion application when the project is finished.

Deadline text on the page: No deadline; projects must be approved before construction begins.