HB 2296 Summary

• Extends the sales factor apportionment method for corporate income tax allocation through December 31, 2024, then reverts to the traditional three-factor method (property, payroll, and sales) beginning January 1, 2025.

• Eliminates the multistate service provider election for market-based sales allocation after December 31, 2024, ending the gradual transition to market-based apportionment.

• Implements comprehensive market-based sales sourcing rules for non-tangible personal property sales effective January 1, 2025, including specific provisions for real property leases, loans, investment assets, services, and intangible property.

• Specifies that aircraft used in business are located in Arizona based on the fraction of total landings occurring in the state.

• Requires the Department of Revenue to adopt rules necessary to implement the new market-based sales sourcing provisions.