26 CAR § 130-138. Apportionment — Business income — Determining apportionment factor — Arkansas Code § 26-51-709

(a) All business income of the taxpayer shall be apportioned to Arkansas by use of an apportionment formula. (b) The apportionment formula consists of a fraction, of which the: (1) Numerator is the property factor plus the payroll factor plus double the sales factor; and (2) Denominator is four (4). (c) A change in the law requires a double weighted sales factor for years beginning on or after January 1, 1995. (d)(1) If the denominator is missing in one (1) or more of the three (3) factors, then the denominator of four (4) must be reduced by the number of missing factors. (2) For example, the denominator shall be the same as the number of entries, other than zero (0), that apply to the total (everywhere) amounts of the property, payroll, and sales factors. Examples: Examples 1 and 2 apply to tax years beginning before January 1, 1995. Examples 3 and 4 apply to tax years beginning after January 1, 1995. Example 1: (A) Amounts in Arkansas (B) Total Amounts (C) Percentage (A) ÷ (B) Total Tangible Property 200,000 1,000,000 20.000000% Payrolls -0- 1,000,000 -0- Sales 400,000 1,000,000 40.000000% Sum of the Percentages 60.000000% Percentage Attributable to Arkansas: 60.000000% Sum of the Percentages divided by 3 = 3 = 20.000000% Example 2: (A) Amounts in Arkansas (B) Total Amounts (C) Percentage (A) ÷ (B) Total Tangible Property 100,000 1,000,000 10.000000% Payrolls -0- -0- -0- Sales 400,000 1,000,000 40.000000% Sum of the Percentages 50.000000% Percentage Attributable to Arkansas: 50.000000% Sum of the Percentages divided by 2 = 2 = 25.000000% Example 3: (A) Amounts in Arkansas (B) Total Amounts (C) Percentage (A) ÷ (B) Total Tangible Property 200,000 1,000,000 20.000000% Payrolls -0- 1,000,000 -0- Sales 400,000 1,000,000 40.000000% Double Weighted Sales Factor 80.000000% Sum of the Percentages 100.000000% Percentage Attributable to Arkansas: 100.000000% Sum of the Percentages divided by 4 = 4 = 25.000000% Example 4: (A) Amounts in Arkansas (B) Total Amounts (C) Percentage (A) ÷ (B) Total Tangible Property 100,000 1,000,000 10.000000% Payrolls -0- -0- -0- Sales 400,000 1,000,000 40.000000% Double Weighted Sales Factor 80.000000% Sum of the Percentages 90.000000% Percentage Attributable to Arkansas: 90.000000% Sum of the Percentages divided by 3 = 3 = 30.000000%