Section 143.081

Title X TAXATION AND REVENUE

Chapter 143

Effective - 28 Aug 2024, 4 histories   

  143.081.  Credit for income tax paid to another state. — 1.  A resident individual, resident estate, and resident trust shall be allowed a credit against the tax otherwise due pursuant to sections 143.005 to 143.998 for the amount of any income tax imposed for the taxable year by another state of the United States (or a political subdivision thereof) or the District of Columbia on income derived from sources therein and which is also subject to tax pursuant to sections 143.005 to 143.998.  For purposes of this subsection, the phrase "income tax imposed" shall be that amount of tax before any income tax credit allowed by such other state or the District of Columbia if the other state or the District of Columbia authorizes a reciprocal benefit for residents of this state.

  2.  The credit provided pursuant to this section shall not exceed an amount which bears the same ratio to the tax otherwise due pursuant to sections 143.005 to 143.998 as the amount of the taxpayer's Missouri adjusted gross income derived from sources in the other jurisdiction bears to the taxpayer's Missouri adjusted gross income derived from all sources.  In applying the limitation of the previous sentence to an estate or trust, Missouri taxable income shall be substituted for Missouri adjusted gross income.  If the tax of more than one other jurisdiction is imposed on the same item of income, the credit shall not exceed the limitation that would result if the taxes of all the other jurisdictions applicable to the item were deemed to be of a single jurisdiction.  The provisions of this subsection shall apply to any credit allowed under this section.

  3.  (1)  For the purposes of this section, in the case of an S corporation, each resident S shareholder shall be considered to have paid a tax imposed on the shareholder in an amount equal to the shareholder's pro rata share of any net income tax paid by the S corporation to a state which does not measure the income of shareholders on an S corporation by reference to the income of the S corporation or where a composite return and composite payments are made in such state on behalf of the S shareholders by the S corporation.

  (2)  A resident S shareholder shall be eligible for a credit issued pursuant to this section in an amount equal to the individual income tax imposed pursuant to this chapter on such shareholder's share of the S corporation's income derived from sources in another state of the United States or the District of Columbia, and which is subject to income tax pursuant to this chapter but is not subject to income tax in such other jurisdiction or a political subdivision thereof.

  4.  For purposes of subsection 3 of this section, in the case of an S corporation that is a bank chartered by a state, the Office of Thrift Supervision^*, or the comptroller of currency, each Missouri resident S shareholder of such out-of-state bank shall qualify for the shareholder's pro rata share of any net tax paid, including a bank franchise tax based on the income of the bank, by such S corporation where bank payment of taxes are made in such state on behalf of the S shareholders by the S bank to the extent of the tax paid.

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(L. 1972 S.B. 549, A.L. 1993 S.B. 66 & 20, A.L. 1999 H.B. 701, A.L. 2002 S.B. 895, A.L. 2004 S.B. 1394, A.L. 2022 H.B. 2400, A.L. 2024 H.B. 1912)

*Office of Thrift Supervision, U.S. Department of the Treasury

(2001) Credit does not apply to shareholders of subchapter S corporation which elects to pay other state's taxes as a subchapter C corporation.  Hermann v. Director of Revenue, 47 S.W.3d 362 (Mo.banc).