Missouri — Corporate Income / Franchise Tax

Missouri imposes a corporate income tax on corporations taxable under sections 143.011 to 143.996 of the Missouri Revised Statutes. The tax is computed on Missouri taxable income at the rates specified in section 143.071.

Source: RSMo § 143.431

Entities Required to File

Every corporation required to file a federal income tax return and having gross income from sources within Missouri of $100 or more must register and file a Missouri corporation income tax return (Form MO-1120).

Source: Missouri DOR – Business Tax Registration FAQs

For federal tax classification purposes, Missouri follows the Internal Revenue Code. If an LLC is treated as a corporation for federal purposes and files federal Form 1120, it is treated as a corporation for Missouri purposes and must file Form MO-1120.

Source: Missouri DOR – Corporation Income Tax FAQs

S Corporations

An S corporation, as defined by Internal Revenue Code Section 1361(a)(1), is not subject to the corporate income tax imposed by section 143.071 or other provisions imposing income tax on corporations. Instead, S corporations file Form MO-1120S for informational purposes, and the tax is paid by shareholders on their individual Missouri income tax returns.

Source: RSMo § 143.471

Every S corporation must register and file if it files federal Form 1120S and either (1) has a shareholder who is a Missouri resident or (2) has any income derived from Missouri sources.

Source: Missouri DOR – Business Tax Registration FAQs

Exempt Entities

The tax does not apply to:

• A corporation exempt from federal income tax by reason of its purposes and activities (except for unrelated business taxable income on which federal tax is imposed);
• An express company that pays an annual tax on its gross receipts in Missouri;
• An insurance company subject to an annual tax on its gross premium receipts in Missouri;
• A Missouri mutual or extended Missouri mutual insurance company organized under Chapter 380; and
• An association or credit union that pays an annual tax pursuant to section 148.620.

Source: RSMo § 143.441

Corporations filing federal Form 990, 990-EZ, 990-N, or 990-PF are not required to file a Missouri corporation income tax return and should not send a copy of the federal form to the Department of Revenue.

Source: Missouri DOR – Corporation Income Tax FAQs

Missouri imposes a 4% corporate income tax on Missouri taxable income for all tax years beginning on or after January 1, 2020.

Source: RSMo § 143.071(3)

For tax years beginning on or after January 1, 2020, Missouri uses a single-sales-factor apportionment formula. Corporations taxable in Missouri and at least one other state apportion their income by multiplying net apportionable income by a fraction. The numerator is total receipts in Missouri during the tax period; the denominator is total receipts everywhere during the tax period.

Source: RSMo § 143.455(2) and (10)

Missouri imposes corporate income tax on corporations that derive income from sources within the state. Missouri taxable income of a corporation includes all income derived from sources within Missouri, as determined under the allocation and apportionment rules in section 143.451. Missouri does not impose a dollar-threshold economic nexus standard for corporate income tax; instead, nexus is established through physical presence or business activity sufficient to create constitutional nexus under the Commerce Clause.

Public Law 86-272 (15 U.S.C. §§ 381–385) protects out-of-state corporations from Missouri corporate income tax if their only in-state activity is the solicitation of orders for tangible personal property that are approved and shipped from outside Missouri.

Source: RSMo § 143.451

Standard Due Date

Missouri corporate income tax returns must be filed "on or before the fifteenth day of the fourth month following the close of the taxpayer's taxable year," except for exempt organizations. For calendar-year corporations, the return is due April 15; for fiscal-year corporations, the fifteenth day of the fourth month after the fiscal year ends. A corporation required to file a return under RSMo §§ 143.011 to 143.996 must "without assessment, notice, or demand, pay any tax due thereon to the director of revenue on or before the date fixed for filing such return (determined without regard to any extension of time for filing the return)."

Source: RSMo § 143.511

Automatic Extension for Federal Extension Filers

If a corporation has been granted an extension of time for filing its federal income tax return, "the filing of a copy of the extension or the form relating to an automatic extension with the director of revenue shall automatically extend the due date of the income tax return required by sections 143.011 to 143.996." The maximum extension for filing any return shall not exceed six months, except for taxpayers outside the United States.

A separate Missouri extension form is not required if the corporation has a federal extension on file with Missouri. An extension of time to file is not an extension of time to pay—payment remains due on the original due date.

Source: RSMo § 143.551

Estimated Tax Installment Due Dates

Corporations required to make estimated tax payments generally pay in four installments: the fifteenth day of the fourth, sixth, and ninth months of the taxable year, and a final installment. For calendar-year corporations, the statute provides that "installments indicated as being due on January fifteenth of the succeeding year shall be paid on or before December fifteenth of the taxable year." Thus, calendar-year corporations pay estimated tax installments on April 15, June 15, September 15, and December 15. For fiscal-year corporations, the corresponding months are substituted.

Source: RSMo § 143.541(6)

Exempt Organizations — Exception

RSMo § 143.511 provides that exempt organizations "shall have the same due date as set by the Internal Revenue Code of 1986, as amended." For example, tax-exempt organizations filing federal Form 990-T follow the federal due date for that form (the fifteenth day of the fifth month after the close of the organization's taxable year under IRC § 6072(e), or May 15 for calendar-year filers). Cooperatives filing federal Form 1120-C that are tax-exempt follow the federal due date; for calendar-year filers, this is September 15, and for fiscal-year filers, the fifteenth day of the ninth month following the close of the taxable year.

Source: RSMo § 143.511

Missouri corporate income tax is computed on Missouri taxable income. The starting point is federal taxable income, which is then modified and, for multistate corporations, apportioned to Missouri sources.

Statutory Framework

RSMo § 143.431(1) defines Missouri taxable income as "so much of its federal taxable income for the taxable year, with the modifications specified in subsections 2 to 4 of this section, as is derived from sources within Missouri as provided in section 143.451." For tax years ending on or after July 1, 2002, federal taxable income may be a positive or negative amount.

The computation follows this sequence:

1. Start with federal taxable income (from federal Form 1120, line 30)
2. Apply Missouri modifications (additions and subtractions)
3. Apportion to Missouri (if multistate)
4. Apply the 4% tax rate to Missouri taxable income

Required Modifications to Federal Taxable Income

RSMo § 143.431(2) requires corporations to add or subtract from federal taxable income the modifications to adjusted gross income provided in RSMo § 143.121 (except subdivision (5) of subsection 2, which is reserved for individual taxpayers) and the applicable modifications to itemized deductions provided in RSMo § 143.141.

Key Corporate-Specific Subtractions

Two corporate-specific subtractions apply under RSMo § 143.431(2):

• Federal income tax deduction: Corporations deduct 50% of their federal income tax liability under Chapter 1 of the Internal Revenue Code for the same taxable year, after reduction for credits (except the credit for payments of federal estimated tax, the credit for overpayment, and the credits allowed by 26 U.S.C. §§ 31, 27, and 34). This deduction has been available for all tax years beginning on or after September 1, 1993.

• Missouri-source corporate dividends: Corporations subtract corporate dividends from sources within Missouri to the extent included in federal taxable income, preventing double taxation of Missouri-source income.

Common Additions Under RSMo § 143.121(2)

While corporations incorporate the individual modifications in § 143.121, the most common additions to federal taxable income include:

• Federal income tax refunds received for a prior year that resulted in a Missouri income tax benefit
• Interest on certain governmental obligations excluded from federal gross income under 26 U.S.C. § 103 (other than Missouri obligations or their political subdivisions)
• Certain disallowed business interest expense carryforwards under 26 U.S.C. § 163(j) (for tax years beginning on or after January 1, 2018)

Common Subtractions Under RSMo § 143.121(3)

Common subtractions from federal taxable income include:

• Interest or dividends on U.S. government obligations and obligations of U.S. territories and possessions (to the extent included in federal adjusted gross income)
• Interest on Missouri state and local government obligations

Net Operating Loss Modification

If a corporation uses a net operating loss (NOL) deduction in the current year, RSMo § 143.431(4) requires an addition to federal taxable income equal to the "net operating loss modification" for each loss year to which a portion of the NOL deduction is attributable.

The NOL modification adjusts for the fact that Missouri modifications (additions minus subtractions) in the loss year may have created a larger loss for federal purposes than for Missouri purposes. The modification ensures that the NOL deduction used against current-year income reflects only the loss that would have been allowed under Missouri law.

Missouri follows the federal NOL deduction under IRC § 172 but with modifications. For NOLs carried back more than two years or carried forward more than twenty years for federal purposes, those amounts must be added back to federal taxable income under RSMo § 143.121(2)(4), but may be carried forward on the Missouri return for up to twenty years from the year of initial loss.

Separate-Company vs. Consolidated Returns

Corporations filing a federal consolidated return may elect to file a Missouri consolidated return, in which case the federal consolidated taxable income of the electing affiliated group is the starting point. If an affiliated group files a federal consolidated return but does not elect Missouri consolidated filing, each member must compute its federal taxable income "as if a separate federal income tax return had been filed by each such member" under RSMo § 143.431(3)(4).

Source: RSMo § 143.431

Source: RSMo § 143.121

Source: RSMo § 143.171