Arby’s Franchise Sale Taxable in Arkansas, State Tells Justices

Arkansas was right to deny a $1.27 million corporation income tax refund because a company’s sale of Arby’s franchises was part of its regular business, the state tax agency told the Arkansas Supreme Court.

Arkansas Department of Finance and Administration Secretary Jim Hudson wants the justices to reverse a trial court ruling that US Beef Corp.'s capital gains on the sale weren’t taxable “business income” because the transaction disposed of the entire business.

“Here, the income-producing property was US Beef’s regular business,” the department argued in its opening brief filed Tuesday. Once the court finds that the taxpayer acquired, managed, ...