ALLOCATION OF INTERSTATE INCOME FOR CORPORATE INCOME TAXES

(Section 143.451)

Currently, in determining what portion of a corporation's income is taxable in Missouri, the business may use a method whereby the ratio of instate sales to total sales is multiplied by the net income. A method for determining whether sales of tangible property are to be considered instate is already established in current law. This amendment specifies a process for all other sales.

For sales of real property or rentals of tangible personal property, the portion of the property sold or rented that is located in this state will be considered an instate sale. For sales of service, the portion of the benefits delivered to purchasers in this state will be considered an instate sale.

For rentals or licenses of intangible property, the portion used in this state by the rentee or licensee will be considered an instate sale. Intangible property used for marketing will be considered used in this state if the good or service being marketed is purchased by a consumer in this state. Franchise fees or royalties for intangible property are considered used in this state if the franchise is located in this state.

For sales of intangible property, the portion of the sale used in this state will be considered an instate sale. If the sale is for the right to conduct business activity in a certain geographic area, the sale will be instate if the geographic area is in this state. If receipts for sales of intangible property are dependent on use or productivity, such sale shall be considered a lease or rental of intangible property. All sales of intangible property other than the right to conduct business in a specific area or sales with receipts contingent on productivity or use will be excluded from the sales factor when determining corporate income tax.

If it can not be determined or reasonably approximated that a sale occurs in this state, such sale shall excluded from the sales factor for corporate income taxation.

This provision is similar to HB 2215 (2014). This provision is similar to a provision in SCS/HCS/HB 1296 (2014), CCS/HCS/SB 584 (2014), CCS/SCS/SB 612 (2014), CCS/HCS/SB 662 (2014), CCS#2/HCS/SB 693 (2014), and HCS#2/SCS/SB 777 (2014).

SALES AND USE TAX EXEMPTION FOR FOOD PREPARATION

(Section 144.055)

This act creates a state sales and use tax exemption for utilities used to process food or to research food preparation processes.

MIKE HAMMANN