- (a) Arkansas requires that estimated tax payments be made quarterly in an amount equal to the total of the prior year's net tax liability divided by four (4) unless there is reason to believe that the current year's net tax liability will be greater than or less than the prior year's, in which case a higher or lower amount may be paid.
(b)
- (1) Taxpayers are penalized for incorrectly estimating their net tax liability through assessment of penalties and interest on the amount underpaid.
- (2) Amounts overpaid are refunded.
- (c) Tax credits claimed will reduce net tax liability by the face value of the Tax Credit Certificate (assuming the gross tax liability is greater than the face value of the Tax Credit Certificate, see below).
(d)
- (1) A taxpayer may reduce a quarterly estimated payment by the face amount of the Tax Credit Certificate and not be subject to an assessment of a penalty or interest assuming that the balance (if any) of the estimated payment and subsequent estimated payments are greater than last year's net tax liability less the tax credit or were greater than ninety percent (90%) of this year's net tax liability.
- (2) See Annex 1 attached hereto for examples.
- (e) However, the Venture Capital Investment Act of 2001, Arkansas Code § 15-5-1401 et seq., does not authorize the use of the tax credit as an estimated income tax payment.