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------------------------------------------------------------------------------------------ ¦ REFERENCE TITLE: corporate income tax; sales factor ¦ ------------------------------------------------------------------------------------------ ¦ ¦ ¦ ¦ ¦ ¦ ¦ State of Arizona ¦ ¦ House of Representatives ¦ ¦ Forty-sixth Legislature ¦ ¦ Second Special Session ¦ ¦ 2003 ¦ ¦ ¦ ------------------------------------------------------------------------------------------ ¦ HB 2021 ¦ ------------------------------------------------------------------------------------------ ¦ Introduced by ¦ ¦ Representatives Huffman, Barnes, Gray C, Huppenthal, Reagan, Thompson: Arnold, Burns J, ¦ ¦ Carruthers, Farnsworth, Graf, Gullett, Hanson, Hershberger, Hubbs, Jayne, Johnson, ¦ ¦ Konopnicki, Mason, McClure, O'Halleran, Robson, Stump, Tully, Wagner, Yarbrough (with ¦ ¦ permission of committee on Rules) ¦ ------------------------------------------------------------------------------------------
AN ACT
AMENDING SECTION 43-1139, ARIZONA REVISED STATUTES; RELATING TO CORPORATE INCOME TAX ALLOCATION; PROVIDING FOR CONDITIONAL ENACTMENT.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 43-1139, Arizona Revised Statutes, is amended to read:
43-1139. Allocation of business income
A. Except as provided in subsection B of this section, THE TAXPAYER SHALL ELECT
TO APPORTION all business income shall be apportioned to this state by FOR
TAXABLE YEARS BEGINNING FROM AND AFTER:
1. DECEMBER 31, 2004 THROUGH DECEMBER 31, 2005 BY EITHER:
(a) Multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus two times the sales factor, and the denominator of which is four.
(b) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS TWO TIMES THE PROPERTY FACTOR PLUS TWO TIMES THE PAYROLL FACTOR PLUS SIX TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS TEN.
2. DECEMBER 31, 2005 THROUGH DECEMBER 31, 2006 BY EITHER:
(a) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS THE PROPERTY FACTOR PLUS THE PAYROLL FACTOR PLUS TWO TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS FOUR.
(b) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS ONE AND ONE-HALF TIMES THE PROPERTY FACTOR PLUS ONE AND ONE-HALF TIMES THE PAYROLL FACTOR PLUS SEVEN TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS TEN.
3. DECEMBER 31, 2006 THROUGH DECEMBER 31, 2007 BY EITHER:
(a) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS THE PROPERTY FACTOR PLUS THE PAYROLL FACTOR PLUS TWO TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS FOUR.
(b) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS THE PROPERTY FACTOR PLUS THE PAYROLL FACTOR PLUS EIGHT TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS TEN.
4. DECEMBER 31, 2007 THROUGH DECEMBER 31, 2008 BY EITHER:
(a) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS THE PROPERTY FACTOR PLUS THE PAYROLL FACTOR PLUS TWO TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS FOUR.
(b) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS ONE-HALF TIMES THE PROPERTY FACTOR PLUS ONE-HALF TIMES THE PAYROLL FACTOR PLUS NINE TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS TEN.
5. DECEMBER 31, 2009 BY EITHER:
(a) MULTIPLYING THE INCOME BY A FRACTION, THE NUMERATOR OF WHICH IS THE PROPERTY FACTOR PLUS THE PAYROLL FACTOR PLUS TWO TIMES THE SALES FACTOR, AND THE DENOMINATOR OF WHICH IS FOUR.
(b) MULTIPLYING THE INCOME BY THE SALES FACTOR.
B. All business income of a taxpayer engaged in air commerce shall be apportioned to this state by multiplying the income by a fraction, the numerator of which is the revenue aircraft miles flown within this state for flights beginning or ending in this state and the denominator of which is the total revenue aircraft miles flown by the taxpayer's aircraft everywhere. This subsection applies to each taxpayer, including a combined group filing a combined return or an affiliated group electing to file a consolidated return under section 43-947, if fifty per cent or more of that taxpayer's gross income is derived from air commerce. For THE purposes of this subsection:
1. "Air commerce" means transporting persons or property for hire by aircraft in interstate, intrastate or international transportation.
2. "Revenue aircraft miles flown" has the same meaning prescribed by the United States department of transportation uniform system of accounts and reports for large certificated air carriers (14 Code of Federal Regulations part 241).
Sec. 2. Conditional enactment
This act does not become effective unless all of the following measures from the forty-sixth legislature, second special session are enacted into law and take effect:
1. House Bill _____, relating to withholding tax rates.
2. House Bill _____, relating to an appropriation to the department of revenue for legal costs and payments.
3. House Bill _____, relating to an appropriation to the department of revenue for revenue enhancement.