Arkansas Supreme Court Reverses Decision Regarding Application of Historic Rehabilitation Credit to Nonresidents’ Income Tax

The Arkansas Supreme Court March 7 found that the Phillips County Circuit Court erred in its application of certain credits to Taxpayers’ individual income tax assessment. Taxpayers filed their non-resident Arkansas tax returns, claiming no tax due after applying Arkansas Historic Rehabilitation Income Tax Credits that had been transferred to them. The Department of Finance and Administration (DFA) adjusted Taxpayers’ liability, applying the credits to Taxpayers’ total income, before calculation of the amount apportioned to Arkansas. Taxpayers filed a complaint in the circuit court, claiming that the tax credits should be applied to their tax after apportionment. The circuit court ...