Department of Finance and Administration
Legislative Impact Statement
Bill: SB482
Bill Subtitle: TO AMEND THE INCOME TAX ACT OF 1929; AND TO PROVIDE AN
APPORTIONMENT FORMULA FOR THE INCOME OF RAILROADS.
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Basic Change :
Sponsors: Sen. J. Dismang and Rep. Eaves
SB482 amends §§ 26-5-101 and 26-51-204 to provide a railroad the ability to choose between two
different methods to apportion its income for corporation income tax purposes. A railroad would have
the ability to elect to use:
 Three-factor apportionment, which include property, payroll, and double-weighted sales; or
 Sales factor apportionment.
The bill also codifies the methods for railroads to calculate property, payroll, and sales that are
currently contained in Corporation Income Tax Rule 1.26-51-204. SB482 declares all rules of the
Department of Finance and Administration (DFA) that conflict with SB482 void including any provisions
of Rule 1.26-51-204. DFA would be authorized to promulgate any rules necessary to administer
SB482.
SB482 is effective for tax years beginning on or after January 1, 2023.
Revenue Impact :
Revenue neutral.
Taxpayer Impact :
A railroad will be able to choose on the apportionment methods under SB482 for corporation income
tax purposes.
Resources Required :
Computer programs, tax forms, and instructions will need to be updated. Programming for the
Arkansas Integrated Revenue System (AIRS) is estimated to cost $16,000.00.
Time Required :
Adequate time is provided for implementation.
Procedural Changes :
Department employees and the tax community will need to be educated on these changes.
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 Department of Finance and Administration
Legislative Impact Statement
Bill: SB482
Bill Subtitle: TO AMEND THE INCOME TAX ACT OF 1929; AND TO PROVIDE AN
APPORTIONMENT FORMULA FOR THE INCOME OF RAILROADS.
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Other Comments :
None.
Legal Analysis :
None.
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