AZ SB1046

Amends Arizona Revised Statutes Section 43-1147 to allow multistate service providers to elect an alternative method for allocating business income based on market sales rather than solely income-producing activity.

Multistate service providers deriving more than 85% of sales from out-of-state services may elect to use a blended approach combining market sales and income-producing activity sales, with market sales percentage increasing over time (85% for 2013-2014, 90% for 2014-2015, 95% for 2015-2016, and 100% from December 31, 2016 onward).

Election must be made on the taxpayer's timely filed original income tax return and is effective retroactively for the full taxable year; binding for at least five consecutive taxable years and renewable thereafter if the taxpayer still qualifies.

Defines key terms including "income producing activity sales," "market sales," "multistate service provider," and "received the benefit of the service in this state" with provisions for determining service location when unclear.

Effective for taxable years beginning from and after December 31, 2013.