Section 28 Sales Factor

LibraryTax Law 2009

“The sales factor is a fraction, the numerator of which is
the total sales of the taxpayer in this state during the
tax period, and the denominator of which is the total sales
of the taxpayer everywhere during the tax period.” Compact, Article IV, § 15.

In general, the term “sales” includes all gross receipts derived from transactions and activities in the ordinary course of business, and it excludes nonbusiness income. 12 C.S.R. § 10-2.075(42). It includes gross receipts derived from sales
of goods and products by taxpayers in the business of manufacturing and selling or purchasing and reselling
goods and products, 12 C.S.R. § 10-2.075(42)(A), and it also includes gross receipts derived from business activity not involving the sale of goods, e.g., leasing of property, 12 C.S.R. § 10-2.075(42)(B)-(E). It also includes federal and state excise taxes, including sales taxes if passed on to the buyer or included as part of the selling price of the products, and interest, service charges, carrying charges, and time-price differentials, but it excludes returns and allowances. 12 C.S.R. § 10-2.075(42)(A). If a taxpayer sells property used in its business, the regulations provide that receipts from these transactions constitute “sales.” 12 C.S.R. § 10-2.075(42)(F).

Sales of tangible personal property are attributed to Missouri if the property is shipped or delivered to a purchaser in Missouri, regardless of f.o.b. point or other conditions of sale. 12 C.S.R. § 10-2.075(47)(A). Property is deemed delivered or shipped to a purchaser within Missouri if the recipient is located in Missouri, even though the property was ordered from outside Missouri, or if the shipment terminates in Missouri, even though the purchaser subsequently transfers the property to another state. 12 C.S.R. § 10-2.075(48) and (49). If the taxpayer...

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