The bill aims to enhance economic competitiveness in Arkansas by repealing the income tax apportionment throwback rule, which is believed to hinder job creation and investment in the state. The General Assembly has found that this rule places an undue burden on businesses compared to states without such a rule. The bill includes legislative findings that support the repeal, emphasizing the intent to encourage investment and job creation by multistate enterprises.

Additionally, the bill amends the Arkansas Code regarding the sourcing of sales of tangible personal property. It modifies the language to clarify that sales are considered in-state if the property is delivered to a purchaser within Arkansas, regardless of shipping conditions. The amendments also outline a phased approach for sourcing sales percentages over several tax years, ultimately leading to a complete shift of sourcing outside the state by 2030. The effective date for these changes is set for tax years beginning on or after January 1, 2025.

Statutes affected:
HB 1500: 26-5-101