SB567

Senate Bill 567 amends Arkansas law regarding the Multistate Tax Compact and the Uniform Division of Income for Tax Purposes Act. The primary purpose of the bill is to modernize how multistate corporations apportion their income for tax purposes within the state. Specifically, the bill transitions the sourcing method for receipts from services and intangible property from a 'cost of performance' basis to a 'market-based sourcing' model. Under market-based sourcing, receipts are attributed to the state where the benefit of the service or intangible property is received or consumed, rather than where the service provider incurs the costs of performing the work. The bill also updates terminology, replacing terms such as 'business income' with 'apportionable income' and 'sales' with 'receipts.' These changes are intended to align Arkansas's corporate tax structure with current multistate tax standards and economic realities.