Bill > SB1468

This bill modifies Arizona's corporate tax law, specifically addressing how businesses calculate and allocate their income for tax purposes. The bill makes changes to how businesses report their income across multiple tax years, with key modifications focusing on the sales factor and market sales methodology. For taxable years through December 31, 2025, businesses can choose between two methods of income allocation: either using a combination of property, payroll, and sales factors, or using primarily the sales factor. Starting December 31, 2025, the bill shifts to a market-based approach for determining where sales are considered to have occurred, which means sales will be attributed to the state where the customer is located or receives the service. The bill introduces more detailed rules for determining the location of sales across various types of transactions, including real property, loans, investment assets, services, and intangible property. Additionally, the bill provides specific provisions for multistate service providers, allowing them to make elections about how they calculate and report their sales, with requirements about the duration and conditions of such elections. The changes aim to provide more clarity and potentially simplify corporate tax reporting while ensuring fair allocation of tax revenue based on where economic activity occurs.

Budget and Finance

https://apps.azleg.gov/BillStatus/BillOverview/82892