Shown verbatim: the complete text as captured from the official PDF posted by the Arkansas General Assembly, fetched 2026-07-23. Page and line markers are part of the official record; nothing is edited or removed. The official bill page.
Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas A Bill
2 95th General Assembly
3 Regular Session, 2025 HOUSE BILL 1500
4
5 By: Representative Beaty Jr.
6 By: Senator Gilmore
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8 For An Act To Be Entitled
9 AN ACT TO ENHANCE ECONOMIC COMPETITIVENESS BY
10 REPEALING THE THROWBACK RULE; TO AMEND THE INCOME TAX
11 PROVISIONS CONCERNING THE APPORTIONMENT OF BUSINESS
12 INCOME; AND FOR OTHER PURPOSES.
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14
15 Subtitle
16 TO ENHANCE ECONOMIC COMPETITIVENESS BY
17 REPEALING THE THROWBACK RULE.
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19 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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21 SECTION 1. DO NOT CODIFY. Legislative findings and intent.
22 (a) The General Assembly finds that:
23 (1) The income tax apportionment throwback rule causes the
24 Arkansas income tax to unduly burden job creation and investment in the
25 state, thus harming economic competitiveness, especially in comparison to
26 states that do not have a throwback rule or that do not impose an income tax;
27 and
28 (2) The Arkansas Tax Reform and Relief Legislative Task Force
29 recommended repeal of the throwback rule.
30 (b) The General Assembly intends to repeal the throwback rule to
31 encourage investment and job creation in Arkansas by multistate enterprises.
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33 SECTION 2. Arkansas Code � 26-5-101, Article IV, paragraph 16,
34 concerning the division of income under the Multistate Tax Compact, is
35 amended to read as follows:
36 16. Sales of tangible personal property are in this
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HB1500
1 state if:
2 (a) The the property is delivered or shipped to a
3 purchaser within this state regardless of the f.o.b. point or other
4 conditions of the sale; or
5 (b) The property is shipped from an office, store,
6 warehouse, factory, or other place of storage in this state and the taxpayer
7 is not taxable in the state of the purchaser, in which case the sales shall
8 be sourced as follows:
9 (1) For the tax year beginning on January 1,
10 2024, sales shall be sourced eighty-five and seventy-one hundredths percent
11 (85.71%) within this state and fourteen and twenty-nine hundredths percent
12 (14.29%) outside this state;
13 (2) For the tax year beginning on January 1,
14 2025, sales shall be sourced seventy-one and forty-two hundredths percent
15 (71.42%) within this state and twenty-eight and fifty-eight hundredths
16 percent (28.58%) outside this state;
17 (3) For the tax year beginning on January 1,
18 2026, sales shall be sourced fifty-seven and thirteen hundredths percent
19 (57.13%) within this state and forty-two and eighty-seven hundredths percent
20 (42.87%) outside this state;
21 (4) For the tax year beginning on January 1,
22 2027, sales shall be sourced forty-two and eighty-four hundredths percent
23 (42.84%) within this state and fifty-seven and sixteen hundredths percent
24 (57.16%) outside this state;
25 (5) For the tax year beginning on January 1,
26 2028, sales shall be sourced twenty-eight and fifty-five hundredths percent
27 (28.55%) within this state and seventy-one and forty-five hundredths percent
28 (71.45%) outside this state;
29 (6) For the tax year beginning on January 1,
30 2029, sales shall be sourced fourteen and twenty-six hundredths percent
31 (14.26%) within this state and eighty-five and seventy-four hundredths
32 percent (85.74%) outside this state; and
33 (7) For tax years beginning on or after
34 January 1, 2030, sales shall be sourced one hundred percent (100%) outside
35 this state.
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HB1500
1 SECTION 3. Arkansas Code � 26-51-716 is amended to read as follows:
2 26-51-716. Sales of tangible personal property.
3 Sales of tangible personal property are in this state if:
4 (a) the property is delivered or shipped to a purchaser within
5 this state regardless of the f.o.b. point or other conditions of the sale; or
6 (b) the property is shipped from an office, store, warehouse,
7 factory, or other place of storage in this state and the taxpayer is not
8 taxable in the state of the purchaser, in which case the sales shall be
9 sourced as follows:
10 (1) For the tax year beginning on January 1, 2024, sales
11 shall be sourced eighty-five and seventy-one hundredths percent (85.71%)
12 within this state and fourteen and twenty-nine hundredths percent (14.29%)
13 outside this state;
14 (2) For the tax year beginning on January 1, 2025, sales
15 shall be sourced seventy-one and forty-two hundredths percent (71.42%) within
16 this state and twenty-eight and fifty-eight hundredths percent (28.58%)
17 outside this state;
18 (3) For the tax year beginning on January 1, 2026, sales
19 shall be sourced fifty-seven and thirteen hundredths percent (57.13%) within
20 this state and forty-two and eighty-seven hundredths percent (42.87%) outside
21 this state;
22 (4) For the tax year beginning on January 1, 2027, sales
23 shall be sourced forty-two and eighty-four hundredths percent (42.84%) within
24 this state and fifty-seven and sixteen hundredths percent (57.16%) outside
25 this state;
26 (5) For the tax year beginning on January 1, 2028, sales
27 shall be sourced twenty-eight and fifty-five hundredths percent (28.55%)
28 within this state and seventy-one and forty-five hundredths percent (71.45%)
29 outside this state;
30 (6) For the tax year beginning on January 1, 2029, sales
31 shall be sourced fourteen and twenty-six hundredths percent (14.26%) within
32 this state and eighty-five and seventy-four hundredths percent (85.74%)
33 outside this state; and
34 (7) For tax years beginning on or after January 1, 2030,
35 sales shall be sourced one hundred percent (100%) outside this state.
36
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1 SECTION 4. EFFECTIVE DATE. Sections 2 and 3 of this act are effective
2 for tax years beginning on or after January 1, 2025.
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4 02/17/2025 11:48:27 AM JLL218Every fact on this page links to its source, starting with the official bill record.