Close
Close

Arkansas ALJ upholds director’s discretionary power to require alternative apportionment

An administrative law judge (ALJ) for the Arkansas Office of Hearings and Appeals recently held that the director of the Arkansas Department of Finance and Administration properly exercised his discretionary power to require a taxpayer to apply market-based sourcing to certain interstate sales of services to calculate its Arkansas corporation income tax apportionment factor rather than the statutory cost of performance method. According to the director, the statutory cost of performance method as applied to these sales did not fairly represent the taxpayer’s business activity in the state.

Download the PDF.