2010 Arkansas Code
Title 26 - Taxation
Subtitle 5 - State Taxes
Chapter 51 - Income Taxes
Subchapter 5 - Tax Credits Generally
§ 26-51-511 - Coal mining, producing, and extracting.

26-51-511. Coal mining, producing, and extracting.

(a) As used in this section:

(1) "Coal mining enterprise" means:

(A) An Arkansas taxpayer primarily engaged in surface or highwall mining, producing, or extracting coal in Arkansas; and

(B) A holder of a valid mining permit issued by the Arkansas Department of Environmental Quality to allow surface or highwall mining;

(2) "Eligible transferee" means any Arkansas taxpayer subject to the Income Tax Act of 1929, 26-51-101 et seq., the premium tax imposed by 23-75-119, or the premium tax imposed by 23-63-1614; and

(3) "Taxpayer" means a coal mining enterprise or an eligible transferee.

(b) (1) There shall be allowed a credit against the income tax imposed by the Income Tax Act of 1929, 26-51-101 et seq., the premium tax imposed by 23-75-119, or the premium tax imposed by 23-63-1614 in an amount as determined in subsection (c) of this section for a taxpayer.

(2) A credit allowed under this section shall expire after five (5) tax years following the tax year in which the tax credit was earned.

(c) (1) (A) A credit of two dollars ($2.00) per ton of coal mined, produced, or extracted shall be allowed on each ton of coal mined in Arkansas by a coal mining enterprise in a tax year.

(B) An additional credit of three dollars ($3.00) per ton of coal mined, produced, or extracted shall be allowed on each ton of coal mined in Arkansas in excess of fifty thousand (50,000) tons by a coal mining enterprise in a tax year.

(2) A credit under this section is earned only if the coal is sold to an electric generation plant for less than forty dollars ($40.00) per ton excluding freight charges.

(3) At the election of the taxpayer, the credit may be treated as:

(A) Payment of a tax;

(B) Prepayment of a tax; or

(C) Prepayment of an estimated tax.

(d) (1) The credits allowed under this section shall be freely transferable by written agreement to subsequent transferees at any time during the five (5) years following the year the credit was earned.

(2) A coal mining enterprise that has earned a credit under this section may transfer the credit in writing to an eligible transferee.

(3) (A) The coal mining enterprise and the eligible transferee shall jointly file a copy of the written credit transfer agreement with the Director of the Department of Finance and Administration within thirty (30) days of the credit transfer.

(B) The written credit transfer agreement shall contain:

(i) The name of the parties to the transfer;

(ii) The amount of the credit transferred;

(iii) The tax year that the credit was originally earned by the coal mining enterprise; and

(iv) The tax year or years in which the credit may be claimed.

(C) (i) The Department of Finance and Administration shall promulgate rules and regulations to permit the verification of the validity and timeliness of a claimed tax credit that has been transferred under this subsection.

(ii) The rules and regulations shall not unduly restrict or hinder the transfers of credits under this section.