Corporation Income Tax

General Information

New Jobs Deduction

Net Operating Losses


General Information

Who can use the New Optional Single Sales Factor Apportionment Method 2A?

Corporations filing their original income tax return on or after August 28, 2013 may elect the new apportionment method authorized by Section 143.451.2(3), RSMo, to compute its Missouri corporate taxable income.

back to top


What form do I use to file an amended income tax return?

For tax years beginning on or after January 1, 1993, the same form is used to file an amended return that was used to file the original return. For tax years prior to 1993, the Form MO-1120X is used. Forms may be obtained by calling (800) 877-6881 or downloading from our tax forms page

back to top


If I am a Limited Liability Company (LLC), how do I file?

LLC's shall be classified consistent with Federal income tax purposes. If for federal purpose you are treated as a corporation and file a Federal Form 1120 then you will be treated as a corporation with Missouri and would file a Form MO-1120. (Section 347.187.2, RSMo).

back to top


What is the tax rate for Missouri corporation income tax?

For tax years beginning on or after September 1, 1993, the tax rate is 6.25 percent. For tax years before September 1, 1993, the tax rate is five percent, except for tax years 1990 and 1991 when the rate was graduated.

back to top


How is the graduated tax calculated?

For all tax years beginning on or after January 1, 1990, but not after December 31, 1991, use the income rates below:

Missouri Taxable Income on Line 10 of Form MO-1120X:

Over But Not Over Tax Rate On Excess Over
$0 $100,000 5% $0
$100,000 $335,000 $5,000+6% $100,000
$335,000   $19,100+6.5% $335,000

back to top


How do I pay tax on my S Corporation?

For Missouri income tax purposes, the S Corporation income tax return is filed for informational purposes only. The tax is paid by the shareholder on their Missouri individual income tax return. However, a Form MO-1120S return must be filed to fulfill the S Corporation's franchise tax liability, and payment of franchise tax must be paid if the corporation's assets (in or apportioned to Missouri) exceed one million dollars for franchise taxable years beginning on or after January 1, 2000, or ten million dollars for franchise taxable periods beginning on or after January 1, 2010.

back to top


If my company for any reason is required to file a short period return, when is my Missouri return due?

Your Missouri return is due the 15th day of the 4th month following the year end. If your short period return ended August 31, 2013, then your Missouri corporation return would have been due December 15, 2013. Missouri does not follow the federal guidelines for due dates on short period returns.

Note:
When the due date falls on a Saturday, Sunday, or a legal holiday, the return and payment will be considered timely if made on the next business day.

back to top


What if my Missouri due date falls before the federal due date?

You must file and pay an estimated return by the original Missouri due date and when the federal return is completed, file an amended Missouri return.

back to top


What are additions to tax and interest charges?

Additions to tax are imposed for failure to file or failure to pay. Additions to tax are imposed for failure to file by the due date at the rate of 5 percent per month, not to exceed 25 percent of the unpaid balance. Additions to tax are imposed for failure to pay by the due date at the rate of 5 percent of the unpaid balance.

Interest is imposed on the portion of your Missouri tax liability that is not received on or before the due date. Simple interest is charged on all delinquent taxes. Click here to obtain current or previous interest rates.

If you have delinquent tax and want help figuring the amount due, access the Additions to Tax and Interest Calculator.

back to top


If I file a Federal Form 990, 990EZ, 990N, or 990PF, what do I file for Missouri?

Any corporation filing a Federal Form 990, 990EZ, 990N, or 990PF is 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.

back to top


If I am filing an amended Missouri return to carry back a federal net operating loss, what documentation should I include?

If your consolidated federal income is positive and you are carrying back a separate company loss, attach a copy of the consolidated Federal Form 1120 to document there was no consolidated loss to be carried back. If your consolidated federal return was a loss for 2004 and the previous tax periods are consolidated losses, attach a copy of the consolidated Federal Form 1120 for 2004 and the consolidated Federal 1120 for the tax period being amended on a separate company basis. For tax periods that your consolidated and separate company incur a net operating loss that is carried back, attach a copy of the consolidated Federal Form 1139. Also include a revised income statement for the loss year and the amended tax period and a schedule showing the calculation of the federal income tax deduction on the amended return.

back to top


What do I need to provide to the Missouri Department of Revenue if I claim non-business or wholly passive investment income (non-Missouri source income)?

For non-business income, a schedule must be attached that clearly states the nature and/or source of the non-business income in order to be considered by the Missouri Department of Revenue. The schedule must state the reasons that the income is being allocated. For example, a corporation owns a ten story building. The first two stories are used for the corporation's headquarters and the remaining eight floors are rented to an unrelated company. The rental income for the remaining eight floors is non-business income as it is incidental to the corporation's main business activity.

Wholly passive investment income from outside Missouri will be considered only with an attached detailed explanation.

Missouri corporate income tax is imposed upon Missouri taxable income. Missouri taxable income shall be so much of a corporation's federal taxable income for the taxable year with modification as is derived from sources within Missouri as provided. When a corporation elects single sales or optional single sales factor apportionment, the apportionment and allocation of the listed items is as follows:

Royalties: Royalties are included in Missouri taxable income - all sources and are subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, royalties received from an entity located and operating solely in a foreign country or countries and received from the licensing of trademarks, trade names, or patents may be allocated as wholly passive investment income.

Interest: Interest income from loans or investments made by the taxpayer are an important part of the business and are subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, interest income earned on non-operating excess funds invested by the corporation's out-of-state parent company and invested in another state may be allocated as wholly passive investment income. In addition, interest income received from non-Missouri municipal bonds may be allocated as wholly passive investment income.

Rent: Rent income is included in Missouri taxable income - all sources and is subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate; provided however, rent income from a passive investment outside of Missouri where the corporation had no control of management may be included in the apportionment fraction as a transaction wholly without Missouri.

Capital Gain: Capital Gain income is included in Missouri taxable income - all sources and is subject to apportionment by inclusion in the numerator of the apportionment factor as wholly within or partly within and partly without as appropriate.

Dividends: Dividends to the extent included in federal taxable income are subtracted in determining Missouri taxable income. Dividends from a Missouri payor are apportioned and then subtracted from apportioned income. Dividends from non-Missouri payors are subtracted on the MO-MS schedule in computation of Partial Missouri taxable income - Missouri Sources.

NOTE: If income is allocated as wholly passive investment income, any related expenses must also be allocated.

back to top


What information must I provide to the Missouri Department of Revenue if I am filing an amended Missouri consolidated federal/separate Missouri corporation income tax return due to a federal audit or a federal amended return?

Federal audits and federal amended returns may contain numerous pages. When filing the Missouri amended income tax return, not all of the federal audit or amended return is needed. The minimum information needed is the consolidated federal tax liability (federal audit or federal amended - this information has to be from the Internal Revenue Service or Form 1120X); separate company adjustments (adjustments affecting the amended Missouri return); income statement (or summary of positive federal taxable income companies) before and after federal changes; and federal income tax calculation (before and after federal changes).

back to top


Does Missouri have a claim of right doctrine similar to the Internal Revenue Service?

No. Missouri does not have a claim of right doctrine similar to the Internal Revenue Service. Form MO-1120, Line 1, is the federal taxable income reported to the Internal Revenue Service and the federal income tax deduction is based on Federal Form 1120, Schedule J. No additional modifications are allowed on the Missouri income tax return related to the claim of right doctrine calculations on the federal income tax return.

back to top


What is the MITS/MO ID number that is asked for on the Form MO-1120?

A MITS/MO ID number is assigned to all corporations registered with the Missouri Department of Revenue. This number is used to locate financial information associated with the corporation. This includes original returns, estimated tax payments, Form MO-7004 payments, etc. Every Form MO-1120 filed must have a MITS/MO ID number on it. A return without this number or one with an incorrect number may cause a delay in processing.

If you do not have a MITS number, or need to locate the MITS number, an officer may call the Missouri Department of Revenue, Business Tax Registration at (573) 751-5860.

back to top


How does a corporation compute its Missouri taxable income on Form MO-MS?

The corporation must include in its Form MO-MS its percentage of ownership of the partnership's or Subchapter S Corporation's factors. For example, Company C owns 40 percent of Partnership P. The corporation does not have any property, payroll, or sales except for in its ownership of the partnership. The corporation would take 40 percent of the partnership's property, payroll, and sales everywhere and Missouri only and use these amounts to complete the Form MO-MS.

back to top


How are Qualified Subchapter S Subsidiaries (QSSS) treated for Missouri income and franchise taxes?

QSSS's are treated the same way for Missouri income tax purposes as they are treated with the Internal Revenue Service. One Form MO-1120S is filed under the parent's name and includes all of the activity of the parent and subsidiaries. However, for Missouri franchise tax purposes (Form MO-FT), each company (parent and subsidiaries) must file a separate Form MO-FT. For example, Company P and QSSS companies S1 and S2 file a Federal Form 1120S as parent and Qualified Subchapter S Subsidiaries. Company P would file Form MO-1120S as Company P and subsidiaries. Company P would complete Form MO-FT on just its balance sheet items. Subsidiaries S1 and S2 will file a separate Form MO-1120S, mark the box indicating the filing is for Franchise Tax Only and complete Form MO-FT on each company's balance sheet. Each company would be responsible for paying their franchise tax on the separate Form MO-1120S.

back to top


Who can discuss a corporate income tax question concerning payments, adjustments, etc. with the Missouri Department of Revenue?

General questions that do not address confidential information filed with the Missouri Department of Revenue may be discussed with anyone. Confidential information (including any payment received, return, adjustment, extension filed, etc.) can only be discussed with an officer of the corporation, the preparer (or any member of the preparer's firm or if internally prepared, any member of the internal staff) if the authorization box is checked on Form MO-1120, Page 1, or Form MO-1120S, Page 1, or a person who has a Missouri power of attorney on file (Form 2827).

back to top


Does Missouri require depreciation to be added back?

No. The provision requiring the adding back of bonus depreciation includes property purchased on or after July 1, 2002 but before July 1, 2003, in determining if the bonus depreciation must be used as a Missouri modification. Property purchased before July 1, 2002 and after June 30, 2003, does not qualify for the modification.

back to top


For federal purposes, our company carried back a net operating loss 5 years with the Internal Revenue Service. Are we required to carry back our net operating loss 5 years on our Missouri return?

Yes. If the loss for federal purposes is carried back 5 years, the same tax periods must be amended for state tax purposes. However, in carry back years three, four and five, the loss must be added back as an addition modification. Losses required to be added back will be available for use as a subtraction modification (on Form MO-1120, page 2, Part 2, line 9) beginning with the return following the year of the loss.

Corporations that file a Missouri return with a federal net operating loss (NOL) must treat the loss under the provisions of the Internal Revenue Code. Corporations that file a consolidated federal and separate Missouri return shall compute the separate federal taxable income as if each member filed a separate federal return. The corporation is bound by the federal return election to carry losses forward or back, (i.e., if the loss is carried back on your federal return, the separate company loss must be carried back).

back to top


New Jobs Deduction

How does the new law passed in 2012 expand the New Jobs Deduction?

House Bill 1661 was passed by the General Assembly in the 2012 regular session, and it was signed into law by Governor Nixon on June 27, 2012.  House Bill 1661 expands the New Jobs Deduction, established in 2011 by House Bill 45, to all businesses that meet statutory criteria regardless of how the business entity is structured. Sole proprietors, partnerships, C corporations, S corporations, limited liability companies, limited liability partnerships and other business entities are now all eligible for the New Jobs Deduction if they meet all other qualifying criteria.

back to top


What is the Small Business Deduction for New Jobs and how much is the deduction?

For all taxable years beginning on or after January 1, 2011, and ending on or before December 31, 2014, (or in the case of pass through entities all taxable years ending on or after August 28, 2012) if a small business creates new jobs, it may qualify to claim a deduction for the taxable year each new employee completes at least 52 weeks of full-time employment.  The deduction is $10,000 for each new job created, or $20,000 for each new job created by a small business that paid at least 50 percent of all employees’ health insurance premiums.


How can I claim the New Jobs Deduction?

The deduction may be taken when filing your individual income tax return or corporate income or franchise tax return for the deduction year.  The form “Small Business Deduction For New Jobs Under Section 143.173, RSMo” (MO-NJD) must be attached to your tax return.  The MO-NJD may be found at http://dor.mo.gov/forms/MO-NJD.pdf.

back to top


I own a small business. How does my business qualify to claim the Small Business Deduction for New Jobs under Section 143.173, RSMo?

A business is eligible for the New Jobs Deduction if it meets the following criteria:

For the business to claim an employee in calculating the deduction, the employee:

back to top


How do I determine what comparison date to use when calculating the deduction?

Each small business must choose a date to compare the number of full-time employees in the deduction year and the number employed on the same date in the immediately preceding year. The deduction year comparison date can be any date within the tax year and the previous year comparison date will be one year earlier.

back to top


Can a corporation filing a short period return claim the Small Business Deduction for New Jobs?

Yes, a corporation filing a short period return can qualify for the deduction if the comparison dates are one year apart and the latter comparison date is on or after January 1, 2011 if they meet the other qualifying criteria.

back to top


How do I determine the county average wage or the state average wage?

The county average wage and statewide average wage is calculated by the Department of Economic Development and can be found at www.missourieconomy.org/indicators/countywage.stm. The statewide average wage is listed last on the table.

back to top


Does the parent corporation that is the sole member of an LLC include the LLC’s employees when calculating the deduction?

Yes, if it is a single member LLC disregarded for federal income tax purposes.

back to top


I am a partner, member or shareholder of the business.  How do I take the deduction?

Each partner, member, or shareholder may claim the applicable amount of his or her deduction by entering the amount on Form MO-1040, Line 18 or Form MO-1120, Line 7 and attaching a copy of Form MO-NJD, including page 2 which allocates the deduction between each partner, member, or shareholder.

back to top


If a corporation does business in other states, does it include only the employees in Missouri when determining whether it meets the requirement of less than 50 employees?

No.  To determine whether the business meets the requirement of less than 50 employees, the business must include all employees of the business, even those employed in a state other than Missouri. NOTE: This calculation is only for determining whether the business qualifies as a small business. To calculate the amount of the deduction, only the Missouri employees are counted.

back to top


Net Operating Losses

If a taxpayer has incurred a net operating loss, when is a net operating loss modification computed?

A net operating loss modification is computed when a net operating loss deduction is claimed. If there was a net operating loss for the tax year 2008 and the taxpayer carried it back two years and claimed a net operating loss deduction on an amended federal return for tax year 2006, then a net operating loss modification would be computed for the 2006 amended Missouri return.

Note: Modifications should only be completed if positive additions were offset in the year of the loss.

back to top


Is the Net Operating Loss Modification computed for the year of the loss?

No, it is computed for the year a net operating loss deduction is claimed.

back to top


If a taxpayer has claimed a net operating loss deduction and in the year of the initial loss Missouri addition modifications are less than its subtraction modifications, does it have to compute a net operating loss modification?

No, there is no net operating loss modification attributable to that net operating loss deduction when in the year of the initial loss the Missouri addition modifications are less than the Missouri subtraction modifications.

back to top


What are Missouri addition modifications for purposes of Section 143.431.4 RSMo Cum. Supp. 2004?

back to top


What are Missouri subtraction modifications for purposes of Section 143.431.4 RSMo Cum. Supp. 2004?

back to top


If the net operating loss deduction is composed of net operating loss amounts from more than one year, is there more than one net operating loss modification?

Yes, a net operating loss modification must be computed for each net operating loss included in the net operating loss deduction.

back to top


If more than one net operating loss modification is computed, in what order are the amounts computed?

The net operating loss modifications are computed in the same order as the net operating losses are used as net operating loss deductions for federal income tax purposes.

back to top


When did SB 1394 become effective?

Absent a specified effective date, SB 1394 became effective August 28, 2004. The changes to Section 143.431.4, RSMo, became effective August 28, 2004.

back to top


Can line 1 on the Missouri return be zero?

Yes, line 1 of the Missouri return can be zero only when federal taxable income is zero. When a corporation has a net operating loss (negative line 30 on the Federal Form 1120), line 1 on the Missouri return must equal the same negative amount. A corporation may show the negative amount on line 1 and use it to offset positive modifications, if it chooses. If a negative amount is entered on line 1 and it is used to offset positive additions in the initial year of the loss, Form MO-5090 must be completed when the corporation uses the net operating loss as a carry back or carryfoward on the Federal return.

back to top


If line 1 on Form MO-1120 is negative and the corporation has net addition modifications, i.e., the addition modifications exceed the subtraction modification for that year, does the corporation have to file Form MO-5090 for the year of the loss?

No, the corporation only computes the net operating loss modification and files Form MO-5090 for each year a net operating loss deduction is claimed on a federal return not when the loss was incurred.

back to top


An affiliated group of corporations that files a consolidated federal income tax return may elect to file a consolidated Missouri income tax return. If the affiliated group incurs a consolidated net operating loss and has net addition modifications on its consolidated Missouri return, does the affiliated group have to file Form MO-5090?

No, the affiliated group would only file Form MO-5090 for each year a net operating loss deduction is claimed on a consolidated federal return not in the year that the loss was incurred.

back to top


An affiliated group of corporations files a consolidated federal income tax return but does not file a consolidated Missouri income tax return. Some members of the group file separate company Missouri returns. If a separate company incurs a net operating loss and has net addition modifications on its separate company Missouri return, does the separate company have to file Form MO-5090?

No, the separate company would only file Form MO-5090 for each year a net operating loss deduction is reported on a separate company pro forma federal return not in the year that the loss was incurred.

back to top


Can't find an answer to your question(s)? Email us! We look forward to hearing from you!

Related Forms: MO-1120S and MO-1120