AR HB1845

Creates the Arkansas Small Business Tax Fairness Act establishing combined reporting requirements for corporations engaged in unitary businesses with nexus to Arkansas.

Requires corporations that are members of a unitary business to file a combined report including income and apportionment factors of all combined group members; allows water's-edge elections to exclude foreign members under specified conditions.

Replaces Arkansas's progressive corporate income tax rate structure with a flat rate of 6% for all corporations, effective for tax years beginning January 1, 2014.

Permits the Director of the Department of Finance and Administration to require combined reporting for non-subject entities and to adjust apportionment factors to prevent tax avoidance or evasion.

Defines "tax haven" jurisdictions by multiple criteria including nominal tax rates, lack of transparency, and prohibition of foreign-owned entities, which may be included in combined reporting groups unless excluded by water's-edge election.