Section 20 Eligibility for Allocation and Apportionment of Income

• Library: Tax Law 2009

Under the Compact, the test of entitlement to allocation and apportionment of income for Missouri tax purposes is whether the taxpayer is “taxable in another state” within the meaning of §§ 2 and 3 of Article IV of the Compact. If it is not taxable in any state other than Missouri, the taxpayer is subject to Missouri income tax on its entire net income. For purposes of Article IV of the Compact, the term “state” includes “any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, and any foreign country or political subdivision thereof.” Compact, Article IV, § 1(8).

Article IV, § 3, of the Compact provides that a taxpayer is considered to be taxable in another state if, in that state, it is subject to a net income tax, a franchise tax for the privilege of doing business, or a...