An administrative law judge (ALJ) of the Arkansas Department of Finance and Administration upheld the denial of a taxpayer’s corporate income tax refund claim, after the taxpayer attempted to amend its returns to apply the cost of performance method of sourcing income. Arkansas has adopted section 18 of the Uniform Division of Income for Tax Purposes Act, which grants the Department discretionary authority to require taxpayers to utilize alternative apportionment methods when the prescribed method produces an inequitable result. By refusing to process the taxpayer’s amended returns, the Department required the taxpayer to use market-based sourcing in place of the applicable cost of performance method. In finding that the Department did not abuse its discretion, the ALJ stated that application of the cost of performance method would omit three of the taxpayer’s four Arkansas revenue streams. Notably, the ALJ explained that the Department’s determination was not unreasonable, because the taxpayer had originally used market-based sourcing for its interstate sales on its returns. Redacted Decision, Docket Nos.16-267, 16-268, 16-269 (Ark. Dep’t of Fin. & Admin, June 21, 2016).