Arkansas ~ Corporate Income Tax: Apportionment Using Market-Based Sourcing Sustained

first_imgA denial of a corporate income taxpayer’s refund claims was upheld because the taxpayer failed to show by a preponderance of the evidence that the Arkansas Department of Finance and Administration abused its discretion when it required the use of the market-based apportionment method in lieu of the applicable statutory apportionment method provided. In the originally filed tax returns for the years at issue, the taxpayer inadvertently used market-based sourcing to calculate the sales factor apportionment percentage for the sales of services. Later on, the taxpayer filed amended returns using the statutory cost-of-performance sourcing method to figure the sales factor. The amended returns, requesting refunds, were denied because Arkansas determined that the cost-of-performance method did not accurately reflect the taxpayer’s business activity in the state.Administrative Decision Nos. 16-202, 16-213, Arkansas Department of Finance and Administration, Office of Hearings & Appeals, May 27, 2016, ¶400-689last_img

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