Section 6 Use of a Nonstandard Apportionment Formula

• Library: Tax Law 2009

If a taxpayer seeks to use a nonstandard apportionment formula, it should seek and receive express approval from the Director. In J.C. Nichols Co. v. Director of Revenue, 796 S.W.2d 16 (Mo. banc 1990), the taxpayer, a real estate developer, was headquartered in Kansas City but operated properties both in Kansas and Missouri. In 1944, it adopted a system of accounting that permitted it to allocate its income on a property-by-property basis; it was also able to allocate about 82% of its expenses to specific properties. The remaining expenses were allocated among the properties by various formulae...