(b) Acts 2017, No. 465, amended the refund options by:

1. (1) Increasing the refund available for taxes paid on purchases related to the repair and partial replacement of manufacturing machinery and equipment;
2. (2) Sunsetting the tax refund for major maintenance and improvement programs; and
3. (3) Phasing in an exemption from tax for purchases related to the repair and partial replacement of manufacturing machinery and equipment.

(c)

1. (1) The first option, which provides for a graduated refund and subsequent exemption of sales and use taxes levied under Arkansas Code §§ 26-52-301, 26-52-302, 26-53-106, and 26-53-107, may be claimed by a taxpayer for the purchase and installation of certain machinery and equipment used directly in manufacturing and processing.

2. (2) Taxes levied under Arkansas Code §§ 26-52-301, 26-52-302, 26-53-106, and 26-53-107 subject to refund under this option are the taxes in excess of the following rates:

   1. (A) Beginning July 1, 2014, four and seven-eighths percent (4.875%);
   2. (B) Beginning July 1, 2018, three and seven-eighths percent (3.875%);
   3. (C) Beginning July 1, 2019, two and seven-eighths percent (2.875%);
   4. (D) Beginning July 1, 2020, one and seven-eighths percent (1.875%);
   5. (E) Beginning July 1, 2021, seven-eighths percent (0.875%); and
   6. (F) Beginning July 1, 2022, sales qualifying for the tax refund under this option are fully exempt from taxes levied under Arkansas Code §§ 26-52-301, 26-52-302, 26-53-106, and 26-53-107.

(e)

1. (1) A taxpayer may apply for an increased refund for major maintenance and improvement projects under the second option through June 30, 2022.
2. (2) An application for an increased refund for major maintenance and improvement projects under the second option shall not be accepted on or after July 1, 2022.

(f) To qualify for this discretionary refund, a taxpayer shall:

1. (1) Be eligible for a refund of taxes under Arkansas Code § 26-52-447 or § 26-53-149 (partial replacement and repair of certain machinery and equipment);
2. (2) Hold a direct pay or a limited direct pay sales and use tax permit from the Department of Finance and Administration and when claiming the refund, shall file their monthly direct pay sales and use tax report using the department’s electronic tax report filing system;
3. (3) Enter into a financial incentive agreement with the Arkansas Economic Development Commission for the major maintenance and improvement project prior to incurring project expenditures;
4. (4) Expend at least three million dollars ($3,000,000) on an approved major maintenance and improvement project that includes the purchase of tangible personal property and services that are either exempt or subject to partial refund of tax under Arkansas Code § 26-52-402, § 26-52-447, § 26-53-114, or § 26-53-149;
5. (5) File a completed Manufacturing Replacement and Repair Sales and Use Tax Refund Application with the commission; and
6. (6) Receive approval from the director to receive the increased refund of sales and use taxes for the major maintenance and improvement project.