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 specifies that sales are considered to occur in the state if the property is delivered to a purchaser within Arkansas, regardless of the shipping terms. The amendments also outline a phased approach to sourcing sales percentages for tax years beginning from 2024 to 2030, ultimately leading to a 100% sourcing of sales outside the state for tax years starting on or after January 1, 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