AZ SB1575

Eliminates the option for corporations to use a single sales factor (100% sales) for apportioning business income to Arizona, effective for taxable years beginning after December 31, 2026.

Requires corporations to use a four-factor apportionment formula after December 31, 2026, weighting property, payroll, and sales factors equally (property + payroll + 2x sales, divided by four).

Establishes new market-based sourcing rules for sales of services and intangible property for tax years after December 31, 2026, assigning sales based on where the customer receives the benefit rather than where the income-producing activity occurs.

Specifies detailed sourcing rules for various transaction types including real property, tangible personal property rentals, loans, investment income, services, and intangible property based on customer or property location.

Preserves the existing election for multistate service providers to use market-based sales sourcing through December 31, 2025, with the five-year binding election requirement remaining in effect.