reglab/statecodes huggingface dataset:
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-509 - YOUTH APPRENTICESHIP PROGRAM › Rule 1.26-51-509 - Youth Apprenticeship Credits

Current through Register Vol. 49, No. 6, June, 2024
Youth apprenticeship programs under ACA
					 26-51-1601
					 et seq. are certified by the Arkansas Department of Education, Votech Division.
					 Program related income tax credits are then verified and issued by the
					 Department's Tax Credits/Special Refunds Section. The original certificate
					 issued by the Tax Credits Section must be attached to the taxpayer's first year
					 income tax return upon which the credit is being claimed. The credit cannot
					 exceed the amount of income tax due and can be carried forward for up to two
					 (2) consecutive tax years immediately following the tax year in which the
					 credit originated.
ACA
					 26-51-1601
					 et seq., enacted in 1997, extends the availability of the credit to youth who
					 do not qualify under ACA
					 26-51-509.
					 ACA
					 26-51-1601
					 et seq. applies to tax years beginning on and after 01/01/98. ACA
					 26-51-509
					 applies to tax years beginning on and after 01/01/96. Any registered
					 apprenticeship program under Section 509 must conform to federal regulations in
					 effect on 01/01/95. Allowable credits and carryforward time are the same
					 between ACA 2651-509 and
					 26-51-1601.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-701 - MULTISTATE BUSINESS INCOME › Rule 1.26-51-701 - Source of Law

Current through Register Vol. 49, No. 6, June, 2024
Arkansas has adopted the Uniform Division of Income for Tax
					 Purposes Act ("UDITPA") at ACA
					 26-51-701
					 et seq. and the Multistate Tax Compact at ACA
					 26-5-101
					 et seq.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 1.26-51-702 - Apportionment of Net Income Authorized

Current through Register Vol. 49, No. 6, June, 2024
If a taxpayer's business activities occur both within and
					 outside of Arkansas, the taxpayer shall apportion its business income and
					 allocate any nonbusiness income to Arkansas as provided by Arkansas law.
					 "Taxpayer" means any corporation, partnership, firm, association or person
					 acting as a business entity in more than one state. See ACA
					 26-5-101,
					 Art. II(3).
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 2.26-51-702 - Nexus Generally

Current through Register Vol. 49, No. 6, June, 2024
Generally, a taxpayer has nexus with Arkansas if its
					 business activity in Arkansas goes beyond the mere solicitation of orders for
					 the sale of tangible personal property as set forth in Public Law 86-272, which
					 is codified at
					 15 U.S.C. §
											381.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 3.26-51-702 - Nature of Property Being Sold

Current through Register Vol. 49, No. 6, June, 2024
Only the solicitation to sell tangible personal property is
					 afforded protection under
					 15 U.S.C. §
											381. Therefore, the leasing, renting,
					 licensing or other disposition of tangible personal property, or transactions
					 involving intangibles, such as franchises, patents, copyrights, trade marks,
					 service marks and the like, or any other type of property, are not protected
					 activities under
					 15 U.S.C. §
											381.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 4.26-51-702 - Solicitation of Orders

Current through Register Vol. 49, No. 6, June, 2024
For in-state activity to be protected under
					 15 U.S.C. §
											381, it must be limited solely to the
					 solicitation of orders that if approved, will be filled by shipment or delivery
					 from a point outside of Arkansas. "Ancillary" activities described in 5.
					 26-51-702,
					 "de minimis" activities described in 6.
					 26-51-702
					 and those activities conducted by independent contractors described in 7.
					 26-51-702
					 are protected activities which, by themselves, will not establish nexus.
					 "Solicitation" means
(1) speech or
				  conduct that explicitly or implicitly invites an order and
(2) activities that neither explicitly nor
				  implicitly invite an order, but are entirely ancillary (that is, related) to
				  requests for an order.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 5.26-51-702 - Ancillary Activities

Current through Register Vol. 49, No. 6, June, 2024
Ancillary activities are those activities that serve no
					 independent business function for the seller apart from their connection to the
					 solicitation of orders. "Ancillary" activities are related solely to the
					 solicitation of orders. Activities that a seller engages in apart from
					 soliciting orders shall not be considered as ancillary to the solicitation of
					 orders. The mere assignment of certain activities to sales personnel does not,
					 merely by such assignment, make such activities ancillary to the solicitation
					 of orders. Activities that seek to "promote" sales, such as some marketing
					 activities, are not ancillary, as
					 15 U.S.C. §
											381 does not protect activity that
					 facilitates sales;
					 15 U.S.C. §
											381 only protects ancillary activities that
					 facilitate the request for an order. Engaging in activities which do not fall
					 within the foregoing definition of 'solicitation" will cause the taxpayer to
					 lose the protection afforded by
					 15 U.S.C. §
											381 unless the disqualifying activities,
					 taken together, are "de minimis" as described in 6.
					 26-51-702.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 6.26-51-702 - De Minimis Activities

Current through Register Vol. 49, No. 6, June, 2024
De minimis activities are those activities that, when taken
					 together, establish only a trivial or minor connection with Arkansas. An
					 activity conducted within Arkansas on a regular or systematic basis or pursuant
					 to a company policy, whether such policy is in writing or not, will not be
					 considered trivial. Whether or not an activity establishes a trivial or
					 nontrivial connection with Arkansas is to be measured on both a qualitative and
					 quantitative basis. If such activity either qualitatively or quantitatively
					 creates a nontrivial connection with Arkansas, then such activity exceeds the
					 protection of
					 15 U.S.C. §
											381. Establishing that the disqualifying
					 activities account for only a relatively small part of the business conducted
					 within Arkansas or that the economic importance of such activities is minimal
					 will not be determinative of whether a "de minimis" level of activity
					 exists.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 7.26-51-702 - Independent Contractors

Current through Register Vol. 49, No. 6, June, 2024
15 U.S.C. §
											381 provides protection to certain in-state
					 activities if conducted by an independent contractor that would not be afforded
					 if performed by the taxpayer or its employees or other representatives.
					 Independent contractors may engage in the following limited activities in
					 Arkansas without the taxpayer's loss of protection:
1. Soliciting sales;
2. Making sales; or
3. Maintaining an office.
Sales representatives who represent a single principal are
					 not considered to be independent contractors and are subject to the same
					 limitations as those provided under
					 15 U.S.C. §
												381 and these regulations.
Maintenance of a stock of goods in Arkansas by an
					 independent contractor under consignment or any other type of holding
					 arrangement with the taxpayer will remove the protection unless such stock is
					 used only for purposes of display and solicitation.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 9.26-51-702 - Application to Corporation Incorporated in Arkansas

Current through Register Vol. 49, No. 6, June, 2024
The protection afforded by
					 15 U.S.C. §
											381 does not apply to any corporation
					 incorporated by the Arkansas Secretary of State. See Arkansas Business
					 Corporation Act of 1987, ACA
					 4-27-101 et
					 seq.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 10.26-51-702 - Registration or Qualification to do Business

Current through Register Vol. 49, No. 6, June, 2024
A taxpayer that registers or otherwise formally qualifies
					 to do business within Arkansas does not, by that fact alone, lose its
					 protection under
					 15 U.S.C. §
											381. However, if the taxpayer engages in
					 activities within Arkansas that are not protected under
					 15 U.S.C. §
											381, such protection will be lost. See
					 Arkansas Business Corporation Act of 1987, ACA
					 4-27-1501
					 et seq.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-702 - APPORTIONMENT - DETERMINATION OF NEXUS › Rule 11.26-51-702 - Loss of Protection for Conducting Unprotected Activity During of Tax Year

Current through Register Vol. 49, No. 6, June, 2024
The protection afforded under
					 15 U.S.C. §
											381 will be determined on a tax year by tax
					 year basis. Therefore, if at any time during a tax year the taxpayer conducts
					 activities within Arkansas that are not protected under
					 15 U.S.C. §
											381, all income earned by the taxpayer
					 attributable to Arkansas during such tax year will be subject to Arkansas
					 income tax.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-704 - NONBUSINESS INCOME › Rule 1.26-51-704 - Allocation of Nonbusiness Income

Current through Register Vol. 49, No. 6, June, 2024
Generally, a taxpayer's nonbusiness income will be
					 allocated to the state in which the taxpayer has its commercial domicile (that
					 is, home office or corporate headquarters). However, under certain
					 circumstances, a taxpayer's income from rents, royalties and capital gains may
					 be allocable to Arkansas even though the taxpayer's commercial domicile is not
					 located in Arkansas. See ACA
					 26-51-705
					 through
					 26-51-708.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-709 - APPORTIONMENT - BUSINESS INCOME › Rule 1.26-51-709 - Determining Apportionment Factor

Current through Register Vol. 49, No. 6, June, 2024
All business income of the taxpayer shall be apportioned to
					 Arkansas by use of an apportionment formula. The apportionment formula consists
					 of a fraction of which the numerator is the property factor plus the payroll
					 factor plus double the sales factor and the denominator of which is four (4). A
					 change in the law requires a double weighted sales factor for years beginning
					 on or after 01/01/95. If the denominator is missing in one or more of the three
					 factors, then the denominator of four must be reduced by the number of missing
					 factors. For example, the denominator shall be the same as the number of
					 entries, other than zero, that apply to the total (everywhere) amounts of the
					 property, payroll and sales factors.
Examples 1 & 2 apply to tax years beginning before
					 01/01/95.
Examples 3 & 4 apply to tax years beginning after
					 01/01/95.
Example 1:
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					 to view image
Example 2:
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					 to view image
Example 3:
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					 to view image
Example 4:
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					 to view image
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-710 - PROPERTY FACTOR › Rule 1.26-51-710.1 - Includable Property

Current through Register Vol. 49, No. 6, June, 2024
Property shall be included in the property factor if it is
					 actually used or is available for use or capable of being used during the tax
					 year in the regular course of the taxpayer's trade or business. Property held
					 as reserves (including reserves of materials) and standby facilities shall be
					 included in the factor. Property or equipment under construction during the tax
					 year shall be excluded from the factor until such property is actually used in
					 the regular course of the taxpayer's trade or business. "Goods in process"
					 which can be or are included in the taxpayer's inventory shall be included in
					 the property factor. If the property is partially used in the regular course of
					 the taxpayer's trade or business while under construction, the value of the
					 property to the extent used shall be included in the property factor. Property
					 used in the regular course of the taxpayer's trade or business shall remain in
					 the property factor until its permanent withdrawal is established by an
					 identifiable event, such as its conversion to the production of nonbusiness
					 income, its sale, or the lapse of an extended period of time, normally five (5)
					 years, during which time the property sits idle and is held for
					 sale.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-710 - PROPERTY FACTOR › Rule 2.26-51-710 - Consistency

Current through Register Vol. 49, No. 6, June, 2024
If the taxpayer departs from or modifies the method of
					 valuing property or of excluding property from or including property in the
					 property factor used in returns for prior years, the taxpayer shall disclose in
					 its Arkansas return for the current year the nature and extent of the
					 modification.
If the returns filed by the taxpayer with all states to
					 which the taxpayer reports are not uniform in the valuation of property or in
					 the exclusion or inclusion of property in the property factor, the taxpayer
					 shall disclose in its Arkansas return the nature and extent of the
					 variance.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-710 - PROPERTY FACTOR › Rule 3.26-51-710 - Numerator

Current through Register Vol. 49, No. 6, June, 2024
The numerator of the property factor shall include the
					 average value of the real and tangible personal property owned or rented by the
					 taxpayer and used in Arkansas during the tax year in the regular course of the
					 taxpayer's trade or business. Property in transit between locations of the
					 taxpayer shall be considered to be at the destination for purposes of the
					 property factor. Property in transit between a buyer and seller which is
					 included by the taxpayer in the denominator of its property factor shall be
					 included in the numerator according to the state of destination. The value of
					 mobile or movable property such as construction equipment, trucks or leased
					 electronic equipment which are located both inside and outside of Arkansas
					 during the tax year shall be determined for purposes of the numerator of the
					 factor on the basis of total time within Arkansas during the tax year. An
					 automobile assigned to a traveling employee shall be included in the numerator
					 of the factor on the basis of total miles driven within Arkansas compared to
					 total miles driven everywhere during the tax year.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-711 - PROPERTY FACTOR - VALUATION OF PROPERTY › Rule 1.26-51-711 - Owned Property

Current through Register Vol. 49, No. 6, June, 2024
Property owned by the taxpayer shall be valued at its
					 original cost. As a general rule, original cost is deemed to be the basis of
					 the property for federal income tax purposes, prior to any federal adjustments,
					 at the time of acquisition by the taxpayer and adjusted by subsequent capital
					 additions or improvements thereto and partial disposition thereof, by reason of
					 sale, exchange, abandonment, etc. However, capitalized intangible drilling and
					 development costs shall be included in the property factor whether or not they
					 have been expensed for either federal or state tax purposes.
If the original cost of property is unascertainable, the
					 property is included in the factor at its fair market value as of the date of
					 acquisition by the taxpayer.
Inventory of stock of goods shall be included in the factor
					 in accordance with the valuation method used for federal income tax
					 purposes.
Property acquired by gift or inheritance shall be included
					 in the factor at its basis for determining depreciation for federal income tax
					 purposes.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-713 - PAYROLL FACTOR › Rule 2.26-51-713 - Consistency

Current through Register Vol. 49, No. 6, June, 2024
If the taxpayer departs from or modifies the treatment of
					 compensation paid which has been used in returns for prior years, the taxpayer
					 shall disclose in its Arkansas return for the current year the nature and
					 extent of the modification.
If the returns filed by the taxpayer with all states to
					 which the taxpayer reports are not uniform in the treatment of compensation
					 paid, the taxpayer shall disclose in its Arkansas return the nature and extent
					 of the variance.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-713 - PAYROLL FACTOR › Rule 3.26-51-713 - Numerator

Current through Register Vol. 49, No. 6, June, 2024
The numerator of the payroll factor is the total amount
					 paid in Arkansas during the tax period by the taxpayer for
					 compensation.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-715 - SALES FACTOR › Rule 1.26-51-715 - Sales Factor Generally

Current through Register Vol. 49, No. 6, June, 2024
The term 'sales" means all gross receipts derived by the
					 taxpayer from transactions and activity in the regular course of its trade or
					 business. The following are rules for determining 'sales" in various
					 situations:
1. In the case of a
				  taxpayer engaged in manufacturing and selling or purchasing and reselling goods
				  or products, "sales" includes all gross receipts from the sales of such goods
				  or products (or other property of a kind which would properly be included in
				  the inventory of the taxpayer if on hand at the close of the tax year) held by
				  the taxpayer primarily for sale to customers in the ordinary course of its
				  trade or business. "Gross receipts" for this purpose means gross sales less
				  returns and allowances, and includes all interest income, service charges,
				  carrying charges, or time-price differential charges incidental to such sales.
				  Federal and state excise taxes (including sales taxes) shall be included as
				  part of such receipts if the taxes are passed on to the buyer or included as
				  part of the selling price of the product.
2. In the case of cost plus fixed fee
				  contracts, such as the operation of a government-owned plant for a fee, "sales"
				  includes the entire reimbursed cost plus the fee.
3. In the case of a taxpayer engaged in
				  providing services, such as the operation of an advertising agency or the
				  performance of equipment service contracts or research and development
				  contracts, "sales" includes the gross receipts from the performance of such
				  services, including fees, commissions, and similar items.
4. In the case of a taxpayer engaged in
				  renting real or tangible property, "sales" includes the gross receipts from the
				  rental, lease, or licensing the use of the property.
5. In the case of a taxpayer engaged in the
				  sale, assignment, or licensing of intangible personal property such as patents
				  and copyrights, "sales" includes the gross receipts therefrom.
6. If a taxpayer derives receipts from the
				  sale of equipment used in its business, those receipts constitute sales. For
				  example, a truck express company owns a fleet of trucks and sells its trucks
				  under a regular replacement program. The gross receipts from the sales of the
				  trucks are included in the sales factor.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-715 - SALES FACTOR › Rule 2.26-51-715 - Exceptions

Current through Register Vol. 49, No. 6, June, 2024
The following special rules are established with respect to
					 the sales factor of the apportionment formula:
1. Where substantial amounts of gross
				  receipts arise from an occasional sale of a fixed asset used in the regular
				  course of the taxpayer's trade or business, those gross receipts shall be
				  excluded from the sales factor if such receipts will materially distort the
				  sales factor. For example, gross receipts from the sale of a factory or plant
				  will be excluded.
2. Where the
				  income producing activity with respect to business income from intangible
				  personal property can be readily identified, the income is included in the
				  denominator of the sales factor and, if the income producing activity occurs in
				  Arkansas, in the numerator of the sales factor as well. For example, usually
				  the income producing activity can be readily identified with respect to
				  interest income received on deferred payments on sales of tangible property and
				  income from the sale, licensing or other use of intangible personal property.
Where business income from intangible property cannot
					 readily be attributed to any particular income producing activity of the
					 taxpayer, the income cannot be assigned to the numerator of the sales factor
					 for any state and shall be excluded from the denominator of the sales factor.
					 For example, where business income in the form of dividends received on stock,
					 royalties received on patents or copyrights, or interest received on bonds,
					 debentures or government securities results from the mere holding of the
					 intangible personal property by the taxpayer, the dividends and interest shall
					 be excluded from the denominator of the sales factor.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-715 - SALES FACTOR › Rule 3.26-51-715 - Consistency

Current through Register Vol. 49, No. 6, June, 2024
If the taxpayer departs from or modifies the basis for
					 excluding or including gross receipts in the sales factor used in returns for
					 prior years, the taxpayer shall disclose in its Arkansas return for the current
					 year the nature and extent of the modification.
If the returns filed by the taxpayer with all states to
					 which the taxpayer reports are not uniform in the inclusion or exclusion of
					 gross receipts, the taxpayer shall disclose in its Arkansas return the nature
					 and extent of the variance.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-715 - SALES FACTOR › Rule 4.26-51-715 - Numerator

Current through Register Vol. 49, No. 6, June, 2024
The numerator of the sales factor shall include gross
					 receipts attributable to Arkansas and derived by the taxpayer from transactions
					 and activity in the regular course of its trade or business. All interest
					 income, service charges, carrying charges, or time-price differential charges
					 incidental to such gross receipts shall be included regardless of (1) the place
					 where the accounting records are maintained or (2) the location of the contract
					 or other evidence of indebtedness.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-717 - SALES FACTOR › Rule 1.26-51-717 - Other than Tangible Personal Property

Current through Register Vol. 49, No. 6, June, 2024
Gross receipts from transactions other than sales of
					 tangible personal property are attributed to Arkansas if:
1. The income producing activity is performed
				  entirely within Arkansas; or
2. The
				  income producing activity is performed both inside and outside of Arkansas, in
				  which event the portion of income reportable to Arkansas shall be the
				  percentage that is used in the formula for apportioning income to Arkansas
				  during the year of the sale.
The term "income producing activity" applies to each
					 separate item of income and means the transactions and activity directly
					 engaged in by the taxpayer, or by anyone acting on the taxpayer's behalf, in
					 the regular course of its trade or business for the ultimate purpose of
					 obtaining gains or profit. Accordingly, income producing activity includes, but
					 is not limited to, the following:
1.
				  The rendering of personal services by employees or the utilization of tangible
				  and intangible property by the taxpayer in performing a service;
2. The sale, rental, leasing, licensing or
				  other use of real property;
3. The
				  rental, leasing, licensing or other use of tangible personal property;
				  or
4. The sale, licensing or other
				  use of intangible personal property.
The mere holding of intangible personal property is not, of
					 itself, an income producing activity.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-718 - MODIFICATION OF APPORTIONMENT AND ALLOCATION › Rule 4.26-51-718(d) - Airlines

Current through Register Vol. 49, No. 6, June, 2024
Every taxpayer engaged in the business of transportation of
					 passengers or freight by air both inside and outside of Arkansas shall
					 determine its net income subject to Arkansas income tax by taking that portion
					 of total net operating revenue that the total passenger and freight receipts in
					 Arkansas bears to total receipts from both inside and outside of
					 Arkansas.
Example: Airline Apportionment
Click
					 here to view image
($10,000,000 ÷ $50,000,000) x $500,000 = $100,000 Ark.
					 taxable income
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-718 - MODIFICATION OF APPORTIONMENT AND ALLOCATION › Rule 5.26-51-718(d) - Bus Lines and Trucking Companies

Current through Register Vol. 49, No. 6, June, 2024
Every taxpayer engaged in the business of operating a bus
					 line or trucking company both inside and outside of Arkansas shall determine
					 its net income subject to Arkansas income tax by taking that portion of the
					 total net operating income that the total number of miles operated within
					 Arkansas bears to the total system miles.
Example: XYZ Trucking Company had federal taxable income of
					 $1,000,000. It operated 10,000,000 total miles and 500,000 miles in Arkansas.
					 The Arkansas apportionment factor is 500,000 divided by 10,000,000 or 5% and,
					 assuming no adjustments to federal taxable income are necessary to arrive at
					 apportionable income, Arkansas taxable income is $1,000,000 X 5% or
					 $50,000.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-718 - MODIFICATION OF APPORTIONMENT AND ALLOCATION › Rule 6.26-51-718(d) - Pipelines

Current through Register Vol. 49, No. 6, June, 2024
Every taxpayer operating a pipeline for the transportation
					 of oil or gas both inside and outside of Arkansas shall apportion its net
					 operating income attributable to Arkansas by multiplying the net income by a
					 fraction, the numerator of which is the property factor plus the payroll factor
					 plus double the sales factor and the denominator of which is four.
Property factor - The property factor is a fraction, the
					 numerator of which is the average value of the taxpayer's real and personal
					 property owned or rented and used in Arkansas and the denominator of which is
					 the average value of all the taxpayer's real and personal property owned or
					 rented during the tax year.
Average value of the property owned by the taxpayer means
					 the average of the original cost of the property at the beginning and ending of
					 the tax year. Rental property is valued at eight times the net annual
					 rental.
Payroll factor - The payroll factor is a fraction, the
					 numerator of which is compensation paid for services performed entirely within
					 Arkansas plus a ratable part of compensation paid for services performed both
					 inside and outside of Arkansas, based on the total number of barrel or unit
					 miles in Arkansas, divided by the total barrel or unit miles system wide and
					 the denominator of which is the total compensation paid everywhere during the
					 tax year.
Sales factor - The sales factor is a fraction, the
					 numerator of which is the total sales within Arkansas plus a proportionate part
					 of system revenue earned in Arkansas determined on the basis of the total
					 barrel or unit miles within Arkansas to the total barrel or unit miles in the
					 system during the tax year, and the denominator of which is the total revenue
					 everywhere during the tax year.
Example: Pipeline Company
Property Factor:
Total Property
$1,000,000
Arkansas Property
$ 100,000
($100,000 ÷,000,000) = 10.000000%
Payroll Factor: (Assuming one pipeline and constant
					 volume)
Total Payroll
$ 200,000
Multistate Payroll
$ 100,000
Arkansas Payroll
$ 20,000
Total Barrels
500,000
Arkansas Barrels
50,000
Total Pipeline Miles
1,000
Arkansas Pipeline Miles
100
$20,000 + ([50,000 x 100 miles] ÷ [500,000 x 1,000 miles] x
					 $100,000) ÷ $200,000 = ($20,000 + $1,000) ÷ $00,000 = 10.500000%
Sales Factor:
Total Sales
$1,000,000
Arkansas Sales
$ 200,000
Multistate Sales
$ 500,000
Barrel Miles Ratio (from the payroll
								factor)
.01
$200,000 + (.01 x $500,000) ÷ $1,000,000 = 20.500000% x 2 =
					 41.000000%
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Apportionment Factor:
10% (property) + 10.5% (payroll) + 41% (sales) =
					 61.5%
61.500000% ÷ 4 = 15.375000%
$100,000 (net operating income) x 15.375000% =
					 $15,375
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-802 - PARTNERSHIP RETURNS › Rule 1.26-51-802(b) - Corporations with Partnership Interest

Current through Register Vol. 49, No. 6, June, 2024
Any taxpayer with an interest in a partnership which has
					 gross income from sources within Arkansas must directly allocate the
					 partnership's Arkansas income to Arkansas, rather than include partnership
					 income and apportionment factors in the taxpayer's apportionment
					 formula.
Example:
Partnership Total Income
$100,000
Partnership Income Directly Allocated to
								Arkansas
$50,000
Corporation A's Ownership
10%
Corporation B's Ownership
90%
Corporation A: $50,000 x .10 = $5,000
Corporation B: $50,000 x .90 = $45,000
The amount of partnership income directly allocated to
					 Arkansas will be entered on page 1 of the "Other Income" line or on page 2,
					 Schedule A, Part C, "Direct Income Allocated To Arkansas" line of Form
					 AR1100CT.
If the taxpayer's operations are multistate, all
					 partnership income must be deducted on Schedule A, Part A, "Deduct Adjustments"
					 line. The partnership's Arkansas income should then be entered on Schedule A,
					 Part C, "Direct Income Allocated To Arkansas" line of Form
					 AR1100CT.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-804 - CORPORATION RETURNS › Rule 1.26-51-804(a) - Federal Employer Identification Number - FEIN

Current through Register Vol. 49, No. 6, June, 2024
Every corporation income tax return, information return,
					 amended return, report, declaration of estimated tax return or claim for refund
					 must include a correct Federal Employer Identification Number ("FEIN"). FEINs
					 are assigned by the Internal Revenue Service.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-804 - CORPORATION RETURNS › Rule 1.26-51-804(d) - Bankruptcy, Dissolution and Receivership

Current through Register Vol. 49, No. 6, June, 2024
A receiver, assignee or trustee operating the property or
					 business of a taxpayer, must file an income tax return for such taxpayer (Form
					 AR1100CT) for each year or part of a year during which the fiduciary is in
					 control. Because the powers and functions of the taxpayer are suspended and the
					 taxpayer's property and business are for the time being in the custody of a
					 fiduciary, the fiduciary stands in the place of the taxpayer's officers and is
					 required to perform all the duties and assume all the liabilities which would
					 normally rest with the taxpayer's officers were they in control. A fiduciary in
					 charge of only part of the property of a taxpayer, such as a receiver in
					 mortgage foreclosure proceedings involving only a small portion of the
					 taxpayer's property, need not file an Arkansas corporation income tax return on
					 behalf of the taxpayer.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-805 - CONSOLIDATED CORPORATE RETURNS › Rule 1.26-51-805 - Generally

Current through Register Vol. 49, No. 6, June, 2024
If two or more members of a federal consolidated group file
					 an Arkansas consolidated return, all members who have income from sources
					 within Arkansas must join in the filing of the Arkansas consolidated return. If
					 a corporation is acquired by a parent corporation which has members that file a
					 consolidated Arkansas return, the acquired corporation must join in the filing
					 of the Arkansas consolidated return. If members of an Arkansas consolidated
					 group are acquired by a new parent corporation, they may elect to file separate
					 returns if the acquiring parent has no members who file an Arkansas
					 consolidated return.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-805 - CONSOLIDATED CORPORATE RETURNS › Rule 1.26-51-805(a)(1) - Eligible Members

Current through Register Vol. 49, No. 6, June, 2024
All eligible members of a federal affiliated group that
					 join in the filing of a federal consolidated income tax return may elect to
					 file an Arkansas consolidated income tax return. However, only those eligible
					 members that have gross income from sources within Arkansas may join in the
					 filing of an Arkansas consolidated income tax return. A member of a
					 consolidated group which joins or leaves the group during a tax year must
					 compute its Arkansas taxable income based on the period for which it was a
					 member of the group.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-805 - CONSOLIDATED CORPORATE RETURNS › Rule 1.26-51-805(d)(1) - Change of Ownership

Current through Register Vol. 49, No. 6, June, 2024
If a corporation has a change of ownership under IRC
					 Section 1501 et seq., it must submit a statement outlining the specific changes
					 of ownership which qualify to file a federal consolidated return under Section
					 1501 et seq. with the separate returns of any affected members and with the
					 consolidated return of the remaining members if applicable.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-805 - CONSOLIDATED CORPORATE RETURNS › Rule 1.26-51-805(e) - Allocation of Tax Credits

Current through Register Vol. 49, No. 6, June, 2024
If any member of a consolidated group has an income tax
					 credit, the credit may be applied to the group's consolidated income,
					 regardless of whether or not the member earning the credit had taxable
					 income.
If a member of a consolidated group which earns a credit
					 leaves the group, the credit will first be applied to the last consolidated
					 return in which the member participated. Any remaining balance will be applied
					 to the next return of the member which earned the credit.
If a corporation with an income tax credit merges into
					 another corporation, the credit may be claimed by the surviving corporation
					 only when the ownership of both the acquired and acquiring corporations is
					 substantially the same and at least 80% of the voting stock is owned by the
					 same person or, prior to the acquisition, the acquiring corporation owned at
					 least 80% of the voting stock of the acquired corporation.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-805 - CONSOLIDATED CORPORATE RETURNS › Rule 2.26-51-805(f) - Separate Computation of Taxable Income or Loss

Current through Register Vol. 49, No. 6, June, 2024
A consolidated net operating loss ("NOL") carryover shall
					 be allowed as a deduction from gross income on the consolidated return of an
					 affiliated group under the following rules:
(A) Consolidated NOL carryover shall consist
				  of any consolidated net operating losses (as determined under paragraph C) of
				  the group plus any net operating losses incurred by members of the group in
				  separate return years (as defined in paragraph D) which may be carried over
				  under the provisions of ACA 2651-427. However, a NOL incurred by a member
				  corporation in a separate return limitation year (as defined in paragraph E)
				  shall be subject to the limitation set forth in paragraph B;
(B) With respect to the limitation on NOL
				  carryovers from separate return limitation years, in the case of a NOL of a
				  member of the group carried forward from a separate return limitation year, the
				  amount of the NOL allowed to be carried to the consolidated return shall not
				  exceed:
1) the income of the member
				  corporation which incurred the loss computed for the consolidated year,
				  minus
2) the net operating losses
				  attributable to such member which may be carried to the consolidated year
				  arising in tax years prior to the separate return limitation year;
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-806 - FILING RETURNS › Rule 1.26-51-806(a) - Time and Place

Current through Register Vol. 49, No. 6, June, 2024
Income tax returns must be filed on or before the 15th day
					 of May following the close of the calendar year. If the taxpayer files a return
					 on the basis of a fiscal year, the return must be filed with the Director on or
					 before the expiration of four and one-half (41/2) months from the end of the
					 fiscal year.
A corporation going into liquidation during any given tax
					 year may, upon the completion of such liquidation, prepare a return for that
					 year covering its income for the part of the year in which it was engaged in
					 business and may immediately file such return with the
					 Director.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-806 - FILING RETURNS › Rule 2.26-51-806(a) - Time and Place - Federal Consolidated Group

Current through Register Vol. 49, No. 6, June, 2024
In the case of a member of a federal consolidated group
					 which files a separate return in Arkansas, and which ceases to be a member of
					 the consolidated group at some point during the tax year, the due date for
					 filing the Arkansas short period return shall be the same date as the due date
					 for the remaining members of the consolidated group. No penalty for late filing
					 will be due for any such return if it is filed on or before the due date (or
					 extended due date) for the other members. However, interest will be charged on
					 any unpaid tax liability beginning on the 15th day of the fifth month following
					 the end of the short period. See Regulation 1.
					 26-51-102(17)(B)
					 for an explanation of when short tax periods are deemed to have ended.
EXAMPLE 1: D Corporation, a member of DEF group, files a
					 separate Arkansas return and a federal consolidated return on a calendar year
					 basis. D Corporation is sold on 04/12/93. DEF group has a federal extension to
					 file its 12/93 return on 09/15/94. The separate Arkansas return of D
					 Corporation for the tax period beginning 01/01/93 and ending 04/12/93 will be
					 due 09/15/94. No penalty for late filing of D Corporation's Arkansas return
					 will be assessed unless it is filed after 09/15/94. However, interest on any
					 unpaid tax liability will be charged from 08/15/93 until the return is filed
					 and the tax is paid.
EXAMPLE 2: Same facts as above except no federal extension
					 was made. The Arkansas return of D Corporation for the short tax year ending
					 04/12/93 will be due 05/15/94 for purposes of determining late filing penalty,
					 and any applicable interest will be charged from 08/15/93.
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-806 - FILING RETURNS › Rule 1.26-51-806(b)(1) - Forms

Current through Register Vol. 49, No. 6, June, 2024
Corporation Income Tax booklets, which include forms and
					 instructions, will be mailed to those corporations on record as filing their
					 return during the previous year. Those corporations that used a paid tax
					 preparer will receive a post card with a label to be given to their tax
					 preparer. However, it is the responsibility of the taxpayer to obtain forms and
					 file income tax returns. "C" corporation income tax forms can be obtained by
					 mail at the following address: Corporation Income Tax Section, P.O. Box 919,
					 Little Rock, AR 72203-0919; or may be obtained at the Corporation Income Tax
					 Section during normal office hours. Most forms may be downloaded from the
					 website found under the Arkansas homepage (
www.state.ar.us/revenue
).
Arkansas Administrative Code › Agency 006 - Department of Finance and Administration › Division 05 - Division of Revenues › 1998-1 - Comprehensive Corporation Income Tax Regulations › Rule 26-51-806 - FILING RETURNS › Rule 2.26-51-806(b)(1) - Substitute Forms

Current through Register Vol. 49, No. 6, June, 2024
To ensure accurate, uniform, and efficient processing of
					 tax information, any substitute tax forms must be preapproved in writing,
					 before use, by the manager of the Corporation Income Tax Section. A substitute
					 tax form is any tax return, schedule, statement or declaration (including any
					 commercially or electronically reproduced versions) for which the Department
					 has prescribed a certain format and which is not an exact reproduction or copy
					 of such format. Any substitute tax forms filed with the Department, for which
					 prior written approval from the Corporation Income Tax Section was not
					 obtained, may be categorized by the Department as an incomplete filing.
					 Approval requests should be submitted to the manager of the Section at the
					 address listed in 1.
					 26-51-806(b)(1).
					 Other references: ACA
					 26-18-301(c)
					 and
					 26-51-904.