AR SB482

Allows railroads operating partly within and partly outside Arkansas to choose between two apportionment methods for calculating state income tax liability: using only the sales factor, or using a combined formula of property factor plus payroll factor plus doubled sales factor divided by four.

Defines the sales factor as gross revenue from within Arkansas plus proportionate interstate revenues based on miles operated in Arkansas compared to total miles in the railway system, divided by total operating revenues.

Defines the property factor based on average value of real and tangible property owned or rented in Arkansas, with operating equipment apportioned by ratio of miles operated in Arkansas to total system miles, and rented property valued at eight times net annual rental amount.

Defines the payroll factor as compensation for services performed in Arkansas plus proportionate compensation for services performed in and outside Arkansas based on miles traveled, divided by total compensation paid.

Effective for tax years beginning January 1, 2023, and voids conflicting provisions of Corporation Income Tax Rule 1.26-51-204.