SB 642 - This act makes various modifications to Missouri tax law. The act: (1) Decouples Missouri's income tax from the federal income tax code. The act adopts the IRC as it was written January 1, 2004 (Section 143.091);
(2) Reinstates the decoupling from the federal accelerated depreciation and makes it permanent (Section 143.121);
(3) Eliminates the timely filing discount for employers who withhold their employees' income tax (Sections 143.225 & 143.261);
(4) Modifies the way losses and operating expenses are deducted among parties for various types of property, including intellectual property. Minimum standards are established regarding what connections among various corporate entities constitute related parties and affiliated groups for multi-state corporate income tax purposes. Under this provision, the entire profit of a unitary group will be aggregated and then divided among the members of the group. This allocation will be based upon the relative incomes of the members, without regard to intra-group transfers of these certain targeted operating expenses ("Geoffrey" scenario). The effect of this provision will be to eliminate income classified by the courts as "non-Missouri source income" (Sections 143.431 & 143.434);
(5) Eliminates the filing of single factor apportionment for multi-state income tax calculations (Sections 143.431, 143.451, 143.461, & 143.471);
(6) Restricts the current definition of "common carrier" for purposes of qualifying for a state and local sales and use tax exemption (Sections 144.010 & 144.030); and
(7) Prohibits retailers from obtaining refunds of sales and use taxes without crediting the original purchasers. In the case of over-collections of less than $1,000, such over-collections may be refunded without the higher burden of returning the funds to the purchaser. The $1,000 threshold is an aggregate sum over a five-year period. In the alternative, a retailer, upon submission of an approved plan by the Director of the Department of Revenue, may offer fixed value coupons to customers to satisfy the distribution of the over-collections.
The act has an effective date of 9/1/2007.
This act is identical to Senate Bill 717 (2006) & Senate Bill 360 (2005).
JASON ZAMKUS