143.081. Credit for income tax paid to another state. - Missouri Statutes

Credit for income tax paid to another state.

143.081. 1. A resident individual, resident estate, and residenttrust shall be allowed a credit against the tax otherwise due pursuant tosections 143.005 to 143.998 for the amount of any income tax imposed forthe taxable year by another state of the United States (or a politicalsubdivision thereof) or the District of Columbia on income derived fromsources therein and which is also subject to tax pursuant to sections143.005 to 143.998. For purposes of this subsection, the phrase "incometax imposed" shall be that amount of tax before any income tax creditallowed by such other state or the District of Columbia if the other stateor the District of Columbia authorizes a reciprocal benefit for residentsof this state.

2. The credit provided pursuant to this section shall not exceed anamount which bears the same ratio to the tax otherwise due pursuant tosections 143.005 to 143.998 as the amount of the taxpayer's Missouriadjusted gross income derived from sources in the other taxing jurisdictionbears to the taxpayer's Missouri adjusted gross income derived from allsources. In applying the limitation of the previous sentence to an estateor trust, Missouri taxable income shall be substituted for Missouriadjusted gross income. If the tax of more than one other taxingjurisdiction is imposed on the same item of income, the credit shall notexceed the limitation that would result if the taxes of all the otherjurisdictions applicable to the item were deemed to be of a singlejurisdiction.

3. 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 imposedon the shareholder in an amount equal to the shareholder's pro rata shareof any net income tax paid by the S corporation to a state which does notmeasure the income of shareholders on an S corporation by reference to theincome of the S corporation or where a composite return and compositepayments are made in such state on behalf of the S shareholders by the Scorporation.

4. For purposes of subsection 3 of this section, in the case of an Scorporation that is a bank chartered by a state, the Office of ThriftSupervision*, or the comptroller of currency, each Missouri resident Sshareholder of such out-of-state bank shall qualify for the shareholder'spro rata share of any net tax paid, including a bank franchise tax based onthe income of the bank, by such S corporation where bank payment of taxesare made in such state on behalf of the S shareholders by the S bank to theextent of the tax paid.

(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)

Effective 1-01-05

*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).