AR SB567

Changes Arkansas corporate income tax sourcing for services and intangibles from "cost of performance" method to "market-based sourcing," meaning income is taxed where customers receive the benefit rather than where the work is performed

Replaces terminology throughout tax code, changing "business income" to "apportionable income," "nonbusiness income" to "nonapportionable income," and "sales" to "receipts"

Establishes economic nexus threshold of $250,000 in Arkansas receipts for nonresident corporations and partnerships with no physical presence in the state to be subject to state income tax

Provides telecommunications, cable, internet access, and satellite TV service providers an election to continue using cost-of-performance sourcing for tax years January 1, 2026 through December 31, 2035

Effective for tax years beginning on or after January 1, 2026; approved April 16, 2025