corporate tax; business income; allocation

SB 1468 amends Arizona's corporate tax rules to change how businesses apportion income for state taxation. It revises Section 43-1139 to provide multiple formulas for calculating taxable income, gradually shifting from weighted property/payroll/sales factors toward using only the sales factor for most businesses after 2016. Section 43-1147 updates rules for taxing service sales, requiring businesses to increasingly base taxation on where the market is located rather than where work is performed, fully transitioning to market-based rules after 2025. These changes directly affect corporations operating in Arizona, particularly service providers and air commerce businesses (which face specific apportionment rules under Section 43-1139B). The bill establishes a phased transition across multiple tax years, with the most significant shift occurring in 2016-2025 when businesses can choose the sales-factor-only method.