AN ACT RELATING TO TAXATION -- TAXATION OF BANKS

This bill allows banks to choose a specific method for calculating how much of their income is subject to state tax. Under the new rules, if a bank elects to use this allocation and apportionment method, it must add back certain business expenses paid to related companies within the same corporate group to its taxable income. The law includes exceptions for these added expenses if the bank can prove the transactions were made for legitimate business reasons at fair market rates. These changes apply to tax years starting on or after January 1, 2025, and also provide a process for banks to request alternative calculation methods if the standard formula does not accurately reflect their state business activity.