Section 4 Introduction

• Library: Tax Law 2009

Missouri taxable income includes income from the transaction of business partly within and partly outside Missouri. Section 143.451.2, RSMo 2000. If the income and deductions relating to the portion of the taxpayer’s business conducted in Missouri “cannot be segregated,” income and deductions are to be allocated and apportioned among the relevant states in a manner that will “distribute to [Missouri] a portion based upon the portion of the transaction in this state and the portion in such other state or states.” Section 143.451.2(1).

Generally, a corporate taxpayer entitled to allocate and apportion its income must determine its Missouri taxable income in accordance with either the single-factor formula under § 143.451 or the three-factor formula under Article IV of the Multistate Tax Compact (the Compact), § 32.200, RSMo 2000; it must seek the permission...