26-51-1405. Payroll factor — Definition. [Repealed effective January 1, 2021.]

Arkansas Code — all titles (historical 2020) · legal_authorities

26-51-1405. Payroll factor — Definition. [Repealed effective January 1, 2021.]

26-51-1405. Payroll factor — Definition. [Repealed effective January 1, 2021.] (a) Generally. The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the taxable year by the taxpayer for compensation and the denominator of which is the total compensation paid both within and without this state during the taxable year. The payroll factor shall include only that compensation which is included in the computation of the apportionable income tax base for the taxable year. (b) Compensation Relating to Nonbusiness Income and Independent Contractors. The compensation of any employee for services or activities which are connected with the production of nonbusiness income, which is income that is not includable in the apportionable income base, and payments made to any independent contractor or any other person not properly classifiable as an employee shall be excluded from both the numerator and denominator of the factor. (c) When Compensation Paid in this State. Compensation is paid in this state if any one (1) of the following tests, applied consecutively, is met: (1) The employee's services are performed entirely within this state; (2) The employee's services are performed both within and without the state, but the service performed without the state is incidental to the employee's service within the state. “Incidental” means any service which is temporary or transitory in nature, or which is rendered in connection with an isolated transaction; and (3) If the employee's services are performed both within and without this state, the employee's compensation will be attributed to this state: (A) If the employee's principal base of operations is within this state; (B) If there is no principal base of operations in

Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-1405

Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: repealed. A text match is a research starting point; applicability is not established.