Custom Aircraft Cabinets, which is opening up a new operation on Landers Road in the former National Home Center building, received approval from the Sherwood City Council on Aug. 27 for tax breaks for materials it is using to remodel and construct at its new location.
The council adopted a resolution so that Custom Aircraft Cabinets can participate in the state of Arkansas’ tax back program. However, for the company to get the tax breaks, the local governing body, which in this case is the city of Sherwood, must approve a resolution supporting the company’s request.
"The local government must authorize the refund of local sales and use tax as provided in the Consolidated Incentive Act of 2003," reads the resolution.
John Tice, assistant director of the Arkansas Department of Finance and Administration, said the state law allows companies that apply for the tax break to be reimbursed for any sales or use taxes they had to pay to remodel or build on the site which they are constructing.
"That would apply to any sales or use taxes paid to the state or the local government," Tice said.
Tice added that the tax break also would apply to any contractors Custom Aircraft Cabinets would be hiring to do remodeling work.
Applications for companies to enroll into the sales or use tax reimbursement program come through the Arkansas Economic Development Commission, Tice said.
"Custom Aircraft Cabinets Inc. has agreed to furnish the local government all necessary information for compliance," reads the resolution. "Custom Aircraft Cabinets Inc. has sought to participate in the program and more specifically has requested benefits accruing from additional employees and engineering software of the specific facility."
Tice said the Arkansas Department of Finance and Administration is charged with the responsibility of auditing the sales and use tax records for the company when it submits the necessary paperwork to get reimbursed for any sales or use taxes it has paid in relation to its remodeling and/or construction project in Sherwood.
"If a business chooses to locate into a city and is building a new facility or remodeling an existing facility, the business or contractors would pay sales tax for the construction materials if it were not for this program. With the tax back program, they get the money back from the state," Tice said.
The program also helps these companies be reimbursed on the sales or use taxes they had to pay for machinery, equipment or building furnishings, Tice said.
"Our department pays the refund," Tice said. (Arkansas) Economic Development (Commission) negotiates the agreement and incentives with the participating business. The Department of Finance and Administration collects the tax and when this business notifies my agency that they have made purchases that are eligible for refund, we would audit that business and verify the amount of refund is."