TO ENHANCE ECONOMIC COMPETITIVENESS BY REPEALING THE THROWBACK RULE.

House Bill 1500 proposed to repeal Arkansas's "throwback rule" for income tax apportionment, impacting how multistate businesses calculate their taxable income in the state. Currently, if a business ships tangible goods from Arkansas to another state where it is not subject to income tax, those sales are "thrown back" and treated as Arkansas sales for tax purposes. The bill aimed to gradually phase out this rule by progressively reducing the percentage of such sales considered within Arkansas, starting in 2025. By tax year 2030, these sales would be entirely sourced outside Arkansas, meaning they would not be subject to Arkansas income tax. The stated intent was to enhance economic competitiveness and encourage investment and job creation by multistate enterprises.