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Arkansas Tax and Incentives Update

Caution! Income Tax Apportionment Bill (MTC UDITPA Amendments) Advancing Quickly

Posted On: Thursday, March 09, 2017

Among the hundreds of bills filed on the March 6 deadline was HB2100, sponsored by House Revenue & Taxation Committee Chair Joe Jett. This is a Department of Finance and Administration bill that takes up the model amendments to the Uniform Division for Income Tax Purposes Act (UDITPA) that were adopted by the Multistate Tax Commission (MTC) in 2015. The legislation makes significant changes to Arkansas apportionment, particularly for receipts from services and intangibles. The expansion of the throwback rule and the adoption of a throwout rule particularly stand out for concern. Any affected taxpayers interested in adjusting the bill should act soon: the legislation already has moved out of the House Revenue & Taxation Committee and could be heard on the House floor next week. Read More

Arkansas DFA "Vodafones" Taxpayer's Refund Claims

Posted On: Sunday, July 10, 2016

Make sure that you get your apportionment right on the original return:  In a Department of Finance and Administration hearing decision, nos. 16-202 and 16-203 (May 27, 2016), the administrative law judge upheld the use of alternative apportionment to deny a refund claim.  The facts unfortunately resemble the unfairness of Tennessee's Vodafone case: The taxpayer realized that the wrong sourcing methodology had been used on the original returns and filed refund claims claiming the benefit of the statutory methodology. The tax administrator invoked alternative apportionment (Ark. Code Ann.ยง 26-51-718) to require the original return methodology and thereby deny the claims. Read More


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