Missouri Revised Statutes
Chapter 143
Income Tax
←143.461
Section 143.471.1
143.481→
August 28, 2015
Small business corporation--composite returns--withholding required, when, how determined--banking S corporation shareholder allowed pro rata share of certain tax credits, when--pro rata share of certain tax credits for S corporations that are associations--pro rata share of certain tax credits for S corporations that are credit institutions.
143.471. 1. An S corporation, as defined by Section 1361 (a)(1) of the
Internal Revenue Code, shall not be subject to the taxes imposed by section
143.071, or other sections imposing income tax on corporations.
2. A shareholder of an S corporation shall determine such shareholder's S
corporation modification and pro rata share, including its character, by
applying the following:
(1) Any modification described in sections 143.121 and 143.141 which
relates to an item of S corporation income, gain, loss, or deduction shall be
made in accordance with the shareholder's pro rata share, for federal income
tax purposes, of the item to which the modification relates. Where a
shareholder's pro rata share of any such item is not required to be taken
into account separately for federal income tax purposes, the shareholder's
pro rata share of such item shall be determined in accordance with his pro
rata share, for federal income tax purposes, of S corporation taxable income
or loss generally;
(2) Each item of S corporation income, gain, loss, or deduction shall
have the same character for a shareholder pursuant to sections 143.005 to
143.998 as it has for federal income tax purposes. Where an item is not
characterized for federal income tax purposes, it shall have the same
character for a shareholder as if realized directly from the source from which
realized by the S corporation or incurred in the same manner as incurred by
the S corporation.
3. A nonresident shareholder of an S corporation shall determine such
shareholder's Missouri nonresident adjusted gross income and his or her
nonresident shareholder modification by applying the provisions of this
subsection. Items shall be determined to be from sources within this state
pursuant to regulations of the director of revenue in a manner consistent
with the division of income provisions of section 143.451, section 143.461,
or section 32.200 (Multistate Tax Compact). In determining the adjusted
gross income of a nonresident shareholder of any S corporation, there shall be
included only that part derived from or connected with sources in this state
of the shareholder's pro rata share of items of S corporation income, gain,
loss or deduction entering into shareholder's federal adjusted gross income,
as such part is determined pursuant to regulations prescribed by the director
of revenue in accordance with the general rules in section 143.181. Any
modification described in subsections 2 and 3 of section 143.121 and in
section 143.141, which relates to an item of S corporation income, gain,
loss, or deduction shall be made in accordance with the shareholder's pro rata
share, for federal income tax purposes, of the item to which the modification
relates, but limited to the portion of such item derived from or connected
with sources in this state.
4. The director of revenue shall permit S corporations to file composite
returns and to make composite payments of tax on behalf of its nonresident
shareholders not otherwise required to file a return. If the nonresident
shareholder's filing requirements result solely from one or more interests in
any other partnerships or subchapter S corporations, that nonresident
shareholder may be included in the composite return.
5. If an S corporation pays or credits amounts to any of its nonresident
individual shareholders as dividends or as their share of the S corporation's
undistributed taxable income for the taxable year, the S corporation shall
either timely file with the department of revenue an agreement as provided in
subsection 6 of this section or withhold Missouri income tax as provided in
subsection 7 of this section. An S corporation that timely files an
agreement as provided in subsection 6 of this section with respect to a
nonresident shareholder for a taxable year shall be considered to have timely
filed such an agreement for each subsequent taxable year. An S corporation
that does not timely file such an agreement for a taxable year shall not be
precluded from timely filing such an agreement for subsequent taxable years.
An S corporation is not required to deduct and withhold Missouri income tax
for a nonresident shareholder if:
(1) The nonresident shareholder not otherwise required to file a return
agrees to have the Missouri income tax due paid as part of the S
corporation's composite return;
(2) The nonresident shareholder not otherwise required to file a return
had Missouri assignable federal adjusted gross income from the S corporation
of less than twelve hundred dollars;
(3) The S corporation is liquidated or terminated;
(4) Income was generated by a transaction related to termination or
liquidation; or
(5) No cash or other property was distributed in the current and prior
taxable year.
6. The agreement referred to in subdivision (1) of subsection 5 of this
section is an agreement of a nonresident shareholder of the S corporation to:
(1) File a return in accordance with the provisions of section 143.481
and to make timely payment of all taxes imposed on the shareholder by this
state with respect to income of the S corporation; and
(2) Be subject to personal jurisdiction in this state for purposes of
the collection of income taxes, together with related interest and penalties,
imposed on the shareholder by this state with respect to the income of the S
corporation.
The agreement will be considered timely filed for a taxable year, and for all
subsequent taxable years, if it is filed at or before the time the annual
return for such taxable year is required to be filed pursuant to section
143.511.
7. The amount of Missouri income tax to be withheld is determined by
multiplying the amount of dividends or undistributed income allocable to
Missouri that is paid or credited to a nonresident shareholder during the
taxable year by the highest rate used to determine a Missouri income tax
liability for an individual, except that the amount of the tax withheld may
be determined based on withholding tables provided by the director of revenue
if the shareholder submits a Missouri withholding allowance certificate.
8. An S corporation shall be entitled to recover for a shareholder on
whose behalf a tax payment was made pursuant to this section, if such
shareholder has no tax liability.
9. With respect to S corporations that are banks or bank holding
companies, a pro rata share of the tax credit for the tax payable pursuant to
chapter 148 shall be allowed against each S corporation shareholders' state
income tax as follows, provided the bank otherwise complies with section
148.112:
(1) The credit allowed by this subsection shall be equal to the bank tax
calculated pursuant to chapter 148 based on bank income in 1999 and after, on
a bank that makes an election pursuant to 26 U.S.C. Section 1362, and such
credit shall be allocated to the qualifying shareholder according to stock
ownership, determined by multiplying a fraction, where the numerator is the
shareholder's stock, and the denominator is the total stock issued by such
bank or bank holding company;
(2) The tax credit authorized in this subsection shall be permitted only
to the shareholders that qualify as S corporation shareholders, provided the
stock at all times during the taxable period qualifies as S corporation stock
as defined in 26 U.S.C. Section 1361, and such stock is held by the
shareholder during the taxable period. The credit created by this section on
a yearly basis is available to each qualifying shareholder, including
shareholders filing joint returns. A bank holding company is not allowed
this credit, except that, such credit shall flow through to such bank holding
company's qualified shareholders, and be allocated to such shareholders under
the same conditions; and
(3) In the event such shareholder cannot use all or part of the tax
credit in the taxable period of receipt, such shareholder may carry forward
such tax credit for a period of the lesser of five years or until used,
provided such credits are used as soon as the taxpayer has Missouri taxable
income.
10. With respect to S corporations that are associations, a pro rata
share of the tax credit for the tax payable under chapter 148 shall be
allowed against each S corporation shareholders' state income tax as follows,
provided the association otherwise complies with section 148.655:
(1) The credit allowed by this subsection shall be equal to the savings
and loan association tax calculated under chapter 148 based on the
computations provided in section 148.630 on an association that makes an
election under 26 U.S.C. Section 1362, and such credit shall be allocated to
the qualifying shareholder according to stock ownership, determined by
multiplying a fraction, where the numerator is the shareholder's stock, and
the denominator is the total stock issued by the association;
(2) The tax credit authorized in this subsection shall be permitted only
to the shareholders that qualify as S corporation shareholders, provided the
stock at all times during the taxable period qualifies as S corporation stock
as defined in 26 U.S.C. Section 1361, and such stock is held by the
shareholder during the taxable period. The credit created by this section on
a yearly basis is available to each qualifying shareholder, including
shareholders filing joint returns. A savings and loan association holding
company is not allowed this credit, except that, such credit shall flow
through to such savings and loan association holding company's qualified
shareholders, and be allocated to such shareholders under the same
conditions; and
(3) In the event such shareholder cannot use all or part of the tax
credit in the taxable period of receipt, such shareholder may carry forward
such tax credit for a period of the lesser of five years or until used,
provided such credits are used as soon as the taxpayer has Missouri taxable
income.
11. With respect to S corporations that are credit institutions, a pro
rata share of the tax credit for the tax payable under chapter 148 shall be
allowed against each S corporation shareholders' state income tax as follows,
provided the credit institution otherwise complies with section 148.657:
(1) The credit allowed by this subsection shall be equal to the credit
institution tax calculated under chapter 148 based on the computations
provided in section 148.150 on a credit institution that makes an election
under 26 U.S.C. Section 1362, and such credit shall be allocated to the
qualifying shareholder according to stock ownership, determined by
multiplying a fraction, where the numerator is the shareholder's stock, and
the denominator is the total stock issued by such credit institution;
(2) The tax credit authorized in this subsection shall be permitted only
to the shareholders that qualify as S corporation shareholders, provided the
stock at all times during the taxable period qualifies as S corporation stock
as defined in 26 U.S.C. Section 1361, and such stock is held by the
shareholder during the taxable period. The credit created by this section on
a yearly basis is available to each qualifying shareholder, including
shareholders filing joint returns. A credit institution holding company is
not allowed this credit, except that, such credit shall flow through to such
credit institution holding company's qualified shareholders, and be allocated
to such shareholders under the same conditions; and
(3) In the event such shareholder cannot use all or part of the tax
credit in the taxable period of receipt, such shareholder may carry forward
such tax credit for a period of the lesser of five years or until used,
provided such credits are used as soon as the taxpayer has Missouri taxable
income.
(L. 1972 S.B. 549, A.L. 1983 H.B. 849, A.L. 1989 H.B. 35, et al., A.L.
1993 S.B. 66 & 20, A.L. 1997 H.B. 655 merged with S.B. 170, A.L.
1999 S.B. 386, A.L. 2006 S.B. 892)
1999
1999
143.471. 1. An S corporation, as defined by Section 1361 (a)(1) of
the Internal Revenue Code, shall not be subject to the taxes imposed by
section 143.071, or other sections imposing income tax on corporations.
2. A shareholder of an S corporation shall determine such
shareholder's S corporation modification and pro rata share, including its
character, by applying the following:
(1) Any modification described in sections 143.121 and 143.141 which
relates to an item of S corporation income, gain, loss, or deduction shall
be made in accordance with the shareholder's pro rata share, for federal
income tax purposes, of the item to which the modification relates. Where
a shareholder's pro rata share of any such item is not required to be taken
into account separately for federal income tax purposes, the shareholder's
pro rata share of such item shall be determined in accordance with his pro
rata share, for federal income tax purposes, of S corporation taxable
income or loss generally;
(2) Each item of S corporation income, gain, loss, or deduction shall
have the same character for a shareholder pursuant to sections 143.005 to
143.998 as it has for federal income tax purposes. Where an item is not
characterized for federal income tax purposes, it shall have the same
character for a shareholder as if realized directly from the source from
which realized by the S corporation or incurred in the same manner as
incurred by the S corporation.
3. A nonresident shareholder of an S corporation shall determine such
shareholder's Missouri nonresident adjusted gross income and his or her
nonresident shareholder modification by applying the provisions of this
subsection. Items shall be determined to be from sources within this state
pursuant to regulations of the director of revenue in a manner consistent
with the division of income provisions of section 143.451, section 143.461,
or section 32.200, RSMo (Multistate Tax Compact). In determining the
adjusted gross income of a nonresident shareholder of any S corporation,
there shall be included only that part derived from or connected with
sources in this state of the shareholder's pro rata share of items of S
corporation income, gain, loss or deduction entering into shareholder's
federal adjusted gross income, as such part is determined pursuant to
regulations prescribed by the director of revenue in accordance with the
general rules in section 143.181. Any modification described in
subsections 2 and 3 of section 143.121 and in section 143.141, which
relates to an item of S corporation income, gain, loss, or deduction shall
be made in accordance with the shareholder's pro rata share, for federal
income tax purposes, of the item to which the modification relates, but
limited to the portion of such item derived from or connected with sources
in this state.
4. The director of revenue shall permit S corporations to file
composite returns and to make composite payments of tax on behalf of its
nonresident shareholders not otherwise required to file a return. If the
nonresident shareholder's filing requirements result solely from one or
more interests in any other partnerships or subchapter S corporations, that
nonresident shareholder may be included in the composite return.
5. If an S corporation pays or credits amounts to any of its
nonresident individual shareholders as dividends or as their share of the S
corporation's undistributed taxable income for the taxable year, the S
corporation shall either timely file with the department of revenue an
agreement as provided in subsection 6 of this section or withhold Missouri
income tax as provided in subsection 7 of this section. An S corporation
that timely files an agreement as provided in subsection 6 of this section
with respect to a nonresident shareholder for a taxable year shall be
considered to have timely filed such an agreement for each subsequent
taxable year. An S corporation that does not timely file such an agreement
for a taxable year shall not be precluded from timely filing such an
agreement for subsequent taxable years. An S corporation is not required
to deduct and withhold Missouri income tax for a nonresident shareholder
if:
(1) The nonresident shareholder not otherwise required to file a
return agrees to have the Missouri income tax due paid as part of the S
corporation's composite return;
(2) The nonresident shareholder not otherwise required to file a
return had Missouri assignable federal adjusted gross income from the S
corporation of less than twelve hundred dollars;
(3) The S corporation is liquidated or terminated;
(4) Income was generated by a transaction related to termination or
liquidation; or
(5) No cash or other property was distributed in the current and
prior taxable year.
6. The agreement referred to in subdivision (1) of subsection 5 of
this section is an agreement of a nonresident shareholder of the S
corporation to:
(1) File a return in accordance with the provisions of section
143.481 and to make timely payment of all taxes imposed on the shareholder
by this state with respect to income of the S corporation; and
(2) Be subject to personal jurisdiction in this state for purposes of
the collection of income taxes, together with related interest and
penalties, imposed on the shareholder by this state with respect to the
income of the S corporation.
The agreement will be considered timely filed for a taxable year, and for
all subsequent taxable years, if it is filed at or before the time the
annual return for such taxable year is required to be filed pursuant to
section 143.511.
7. The amount of Missouri income tax to be withheld is determined by
multiplying the amount of dividends or undistributed income allocable to
Missouri that is paid or credited to a nonresident shareholder during the
taxable year by the highest rate used to determine a Missouri income tax
liability for an individual, except that the amount of the tax withheld may
be determined based on withholding tables provided by the director of
revenue if the shareholder submits a Missouri withholding allowance
certificate.
8. An S corporation shall be entitled to recover for a shareholder on
whose behalf a tax payment was made pursuant to this section, if such
shareholder has no tax liability.
9. With respect to S corporations that are banks or bank holding
companies, a pro rata share of the tax credit for the tax payable pursuant
to chapter 148, RSMo, shall be allowed against each S corporation
shareholders' state income tax as follows, provided the bank otherwise
complies with section 148.112:
(1) The credit allowed by this subsection shall be equal to the bank
tax calculated pursuant to chapter 148, RSMo, based on bank income in 1999
and after, on a bank that makes an election pursuant to 26 U.S.C. Section
1362, and such credit shall be allocated to the qualifying shareholder
according to stock ownership, determined by multiplying a fraction, where
the numerator is the shareholder's stock, and the denominator is the total
stock issued by such bank or bank holding company;
(2) The tax credit authorized in this subsection shall be permitted
only to the shareholders that qualify as S corporation shareholders,
provided the stock at all times during the taxable period qualifies as S
corporation stock as defined in 26 U.S.C. Section 1361, and such stock is
held by the shareholder during the taxable period. The credit created by
this section on a yearly basis is available to each qualifying shareholder,
including shareholders filing joint returns. A bank holding company is not
allowed this credit, except that, such credit shall flow through to such
bank holding company's qualified shareholders, and be allocated to such
shareholders under the same conditions; and
(3) In the event such shareholder cannot use all or part of the tax
credit in the taxable period of receipt, such shareholder may carry forward
such tax credit for a period of the lesser of five years or until used,
provided such credits are used as soon as the taxpayer has Missouri taxable
income.
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