On April 9, 2019, Arkansas Senate Bill 576, the product of a multi-year tax reform effort, was signed into law. This bill reduces the corporate income tax rate, requires corporations, including financial institutions, to use single-sales factor apportionment, and extends the NOL carryforward period. First and foremost, the bill reduces the maximum corporation income tax rate for income exceeding $100,000 from 6.5 percent to 6.2 percent for tax years beginning on or after January 1, 2021. For tax years beginning on or after January 1, 2022, the maximum corporate income tax rate is further reduced to 5.9 percent on income exceeding $25,000. Under current law, corporations and financial institutions use a double-weighted sales factor formula to apportion business income to Arkansas. Under Senate Bill 576, for tax years beginning on or after January 1, 2021, all business income of both general corporations and financial institutions will be apportioned to Arkansas using a single-sales or receipts factor method. Finally, Senate Bill 576 extends the net operating loss carryforward period from five years to eight years for losses occurring in tax years beginning on or after January 1, 2020. The carryforward period is increased to ten years for losses occurring in tax years beginning on or after January 1, 2021. Please stay tuned to TWIST for additional corporate income tax updates.