Arkansas Legislature Passes Landmark Economic Development Laws

LITTLE ROCK, Ark. — Economic development leaders are calling the 2025 Arkansas legislative session one of the most impactful in a generation, following the passage of several new laws aimed at boosting energy production, modernizing tax codes, and attracting high-tech industries.

At the center of the new legislation is Act 373, the Generating Arkansas Jobs Act, which allows utilities to finance new energy infrastructure to meet rising demands, particularly from energy-intensive sectors like data centers and AI-driven facilities. Arkansas Commerce Secretary called it “landmark legislation.”

Other significant measures include Act 548, expanding tax incentives for large, multi-site data centers, and Act 576, which enables local governments to form regional industrial development authorities with expanded powers to build infrastructure and negotiate economic agreements.

The legislature also approved Act 1012, offering incentives to grow the lithium industry in south Arkansas — from extraction to processing and battery manufacturing.

Additionally, Acts 881 and 882 provide tax credits for companies that modernize or relocate headquarters to Arkansas, while Act 719 updates corporate tax formulas to align with national standards, encouraging more multi-state businesses to operate in the state.

Finally, Act 740 reduces unemployment insurance rates for businesses and increases funding for skilled workforce training by lifting a longstanding cap.

A proposed constitutional amendment to further expand local development authority will appear on the 2026 general election ballot.