BOF Buys SPI Credit
by January 30, 2006 12:00 am 62 views
The Bank of Fayetteville purchased a research and development tax credit in mid-January from Fayetteville’s Space Photonics Inc.
The tax credit is part of a package passed by the Arkansas Legislature in 2003 to encourage the retention of knowledge-based companies within Arkansas. SPI was the first Arkansas company to receive the state’s new tax incentive that provides up to 33 percent in matching tax credits for federal research and development programs.
The transfer of the tax credit is the first of its kind in Arkansas.
Mitch Chandler, communications director with the Arkansas Department of Economic Development, said the deal between SPI and BOF means that SPI gets operating cash, BOF gets a break on its tax liability, and the state gets income tax from the continued operation of SPI.
Mary Beth Brooks, president and CEO of BOF, said the deal was essentially a “dollar-for-dollar” swap, but seemed like the perfect thing to do because it would help SPI.
Chuck Chalfant, president and CEO of SPI, declined to say how much money came back to the company, but said that between 20 percent and 30 percent of his research and development expenses this year will be offset by the deal.
SPI develops and sells optical networking systems and components for military and commercial aircraft and spacecraft. The company has won 13 contract Small Business Innovation Research awards since 1999.
In October, the company announced it received a four-year, $16.2 million military contract to build satellite laser communications components for the U.S. Air Force.