Section 5 Relation to Other Taxes

• Library: Tax Law 2009

Banks are subject to Missouri income tax just like any other corporation. Section 143.441, RSMo 2000. States are authorized under 12 U.S.C. § 548 to levy a tax on the net income of national banks. People v. Loughman, 100 F.2d 387 (2^nd Cir. 1938). Accordingly, the Missouri Bank Tax is not a substitute for the Missouri income tax assessed against national banks under Chapter 143, RSMo. But as noted in §18.1 above, a bank receives a dollar-for-dollar credit against its Missouri Bank Tax equal to the Missouri income taxes paid.

Before the 1986 amendments to Missouri’s tax law, all Missouri corporations and those engaged in business in Missouri, including state and national banks, were subject to the Missouri corporate franchise tax under Chapter 147, RSMo. The 1986 amendments essentially merged the corporate franchise tax with the old Missouri Bank Tax and exempted banks from the general corporate franchise tax. Section 147.010, RSMo 2000. The result of this change is that
the Missouri Bank Tax consists of the sum of two distinct parts. Section 148.030.2(1), RSMo 2000, provides for an asset-based portion “determined in accordance with section 147.010, RSMo” (the general corporate franchise tax provision). Similarly, § 148.030.2(2) provides a reduction in the income-based portion for the asset-based portion of the Missouri Bank Tax. This treatment results in reduction identical to the credit received for other taxes paid to the state of Missouri.

Before 1969, states could not assess sales and use taxes against national banks because subjecting national banks to sales tax was not authorized under...