Arkansas 2025 Regular Session

Arkansas House Bill HB1500 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Stricken language would be deleted from and underlined language would be added to present law.
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3	3	State of Arkansas 1
4	4	95th General Assembly A Bill 2
5	5	Regular Session, 2025 HOUSE BILL 1500 3
6	6	4
7	7	By: Representative Beaty Jr. 5
8	8	By: Senator Gilmore 6
9	9	7
10	10	For An Act To Be Entitled 8
11	11	AN ACT TO ENHANCE ECONOMIC COMPETITIVENESS BY 9
12	12	REPEALING THE THROWBACK RULE; TO AMEND THE INCOME TAX 10
13	13	PROVISIONS CONCERNING THE APPORTIONMENT OF BUSINESS 11
14	14	INCOME; AND FOR OTHER PURPOSES. 12
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16	16	14
17	17	Subtitle 15
18	18	TO ENHANCE ECONOMIC COMPETITIVENESS BY 16
19	19	REPEALING THE THROWBACK RULE. 17
20	20	18
21	21	BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 19
22	22	20
23	23	SECTION 1. DO NOT CODIFY. Legislative findings and intent. 21
24	24	(a) The General Assembly finds that: 22
25	25	(1) The income tax apportionment throwback rule causes the 23
26	26	Arkansas income tax to unduly burden job creation and investment in the 24
27	27	state, thus harming economic competitiveness, especially in comparison to 25
28	28	states that do not have a throwback rule or that do not impose an income tax; 26
29	29	and 27
30	30	(2) The Arkansas Tax Reform and Relief Legislative Task Force 28
31	31	recommended repeal of the throwback rule. 29
32	32	(b) The General Assembly intends to repeal the throwback rule to 30
33	33	encourage investment and job creation in Arkansas by multistate enterprises. 31
34	34	32
35	35	SECTION 2. Arkansas Code § 26 -5-101, Article IV, paragraph 16, 33
36	36	concerning the division of income under the Multistate Tax Compact, is 34
37	37	amended to read as follows: 35
38	38	16. Sales of tangible personal property are in this 36 HB1500
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41	41	state if: 1
42	42	(a) The the property is delivered or shipped to a 2
43	43	purchaser within this state regardless of the f.o.b. point or other 3
44	44	conditions of the sale ; or 4
45	45	(b) The property is shipped from an office, store, 5
46	46	warehouse, factory, or other place of storage in this state and the taxpayer 6
47	47	is not taxable in the state of the purchaser, in which case the sales shall 7
48	48	be sourced as follows: 8
49	49	(1) For the tax year beginning on January 1, 9
50	50	2024, sales shall be sourced eighty -five and seventy-one hundredths percent 10
51	51	(85.71%) within this state and fourteen and twenty -nine hundredths percent 11
52	52	(14.29%) outside this state; 12
53	53	(2) For the tax year beginning on January 1, 13
54	54	2025, sales shall be sourced seventy -one and forty-two hundredths percent 14
55	55	(71.42%) within this state and twenty -eight and fifty-eight hundredths 15
56	56	percent (28.58%) outside this state; 16
57	57	(3) For the tax year beginning on January 1, 17
58	58	2026, sales shall be sourced fifty -seven and thirteen hundredths percent 18
59	59	(57.13%) within this state and forty -two and eighty-seven hundredths percent 19
60	60	(42.87%) outside this state; 20
61	61	(4) For the tax year beginning on January 1, 21
62	62	2027, sales shall be sourced forty -two and eighty-four hundredths percent 22
63	63	(42.84%) within this state and fifty -seven and sixteen hundredths percent 23
64	64	(57.16%) outside this state; 24
65	65	(5) For the tax year beginning on January 1, 25
66	66	2028, sales shall be sourced twenty -eight and fifty-five hundredths percent 26
67	67	(28.55%) within this state and seventy -one and forty-five hundredths percent 27
68	68	(71.45%) outside this state; 28
69	69	(6) For the tax year beginning on January 1, 29
70	70	2029, sales shall be sourced fourteen and twenty -six hundredths percent 30
71	71	(14.26%) within this state and eighty -five and seventy-four hundredths 31
72	72	percent (85.74%) outside this state; and 32
73	73	(7) For tax years beginning on or after 33
74	74	January 1, 2030, sales shall be sourced one hundred percent (100%) outside 34
75	75	this state. 35
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79	79	SECTION 3. Arkansas Code § 26 -51-716 is amended to read as follows: 1
80	80	26-51-716. Sales of tangible personal property. 2
81	81	Sales of tangible personal property are in this state if : 3
82	82	(a) the property is delivered or shipped to a purchaser within 4
83	83	this state regardless of the f.o.b. point or other conditions of the sale ; or 5
84	84	(b) the property is shipped from an office, store, warehouse, 6
85	85	factory, or other place of storage in this state and the taxpayer is not 7
86	86	taxable in the state of the purchaser, in which case the sales shall be 8
87	87	sourced as follows: 9
88	88	(1) For the tax year beginning on January 1, 2024, sales 10
89	89	shall be sourced eighty -five and seventy-one hundredths percent (85.71%) 11
90	90	within this state and fourteen and twenty -nine hundredths percent (14.29%) 12
91	91	outside this state; 13
92	92	(2) For the tax year beginning on January 1, 2025, sales 14
93	93	shall be sourced seventy -one and forty-two hundredths percent (71.42%) within 15
94	94	this state and twenty -eight and fifty-eight hundredths percent (28.58%) 16
95	95	outside this state; 17
96	96	(3) For the tax year beginning on January 1, 2026, sales 18
97	97	shall be sourced fifty -seven and thirteen hundredths percent (57.13%) within 19
98	98	this state and forty -two and eighty-seven hundredths percent (42.87%) outside 20
99	99	this state; 21
100	100	(4) For the tax year beginning on January 1, 2027, sales 22
101	101	shall be sourced forty -two and eighty-four hundredths percent (42.84%) within 23
102	102	this state and fifty -seven and sixteen hundredths percent (57.16%) outside 24
103	103	this state; 25
104	104	(5) For the tax year beginning on January 1, 2028, sales 26
105	105	shall be sourced twenty -eight and fifty-five hundredths percent (28.55%) 27
106	106	within this state and seventy -one and forty-five hundredths percent (71.45%) 28
107	107	outside this state; 29
108	108	(6) For the tax year beginning on January 1, 2029, sales 30
109	109	shall be sourced fourteen and twenty -six hundredths percent (14.26%) within 31
110	110	this state and eighty -five and seventy-four hundredths percent (85.74%) 32
111	111	outside this state; and 33
112	112	(7) For tax years beginning on or after January 1, 2030, 34
113	113	sales shall be sourced one hundred percent (100%) outside this state . 35
114	114	36 HB1500
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117	117	SECTION 4. EFFECTIVE DATE. Sections 2 and 3 of this act are effective 1
118	118	for tax years beginning on or after January 1, 2025. 2
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