HB1495 Summary

• Creates the Arkansas Small Business Tax Fairness Act requiring corporations engaged in unitary businesses to file combined income tax reports instead of separate returns, effective for tax years beginning January 1, 2012.

• Defines unitary business as commonly controlled entities that are sufficiently interdependent, integrated, and interrelated to provide synergy and mutual benefit with shared or exchanged value among members.

• Allows taxpayers to elect "water's-edge" treatment to exclude foreign corporations and certain foreign-source income from combined reporting, subject to specific requirements and a 10-year binding period.

• Requires one member of the combined group to designate as surety and file a single consolidated return on behalf of all members, either the federal consolidated parent corporation or an Arkansas-nexus subsidiary.

• Establishes provisions for determining combined group business income, apportionment percentages, tax credits, deductions, and net operating losses under unified reporting standards.