Arkansas Supreme Court Holds Gain from Sale of Entire Business Is Nonbusiness Income

The Arkansas Supreme Court affirmed the circuit court’s grant of summary judgment to the taxpayer, holding that gains from the sale of intangible assets constituted nonbusiness income allocable to Oklahoma rather than Arkansas. The taxpayer, an Oklahoma-based corporation, operated restaurant franchises in multiple states, including Arkansas, until it sold its entire business in 2018, treating approximately $176.7 million in gains from intangible assets as nonbusiness income. The court applied the functional test under Arkansas’s Uniform Division of Income for Tax Purposes Act. It determined that while the taxpayer regularly acquired and managed franchise assets, it did not regularly dispose of ...