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Newly Signed Bill Clarifies Tax Calculation

06.04.2015

New Missouri Law Provides Incentives to Self-Insure with CaptivesMissouri Governor Jay Nixon has signed Senate Bill 19, which enacts a market-based approach for sourcing sales other than sales of tangible personal property for taxpayers electing the optional single-sales factor method (“Method Two A”).  For taxpayers electing Method Two A, a transaction involving the sale other than the sale of tangible personal property is considered “in this state” if the taxpayer’s market for the sale is in Missouri.  The taxpayer’s market for sales in this state is determined as follows:

  • Sale, rental, lease or license of real or tangible personal property if such property is located in this state;
  • Sales of service to the extent the benefit of the service is delivered to a purchaser location in this state; or
  • Intangible property to the extent the property is used in this state.

This bill will serve to clarify a 2013 law, which allowed only taxpayers with sales of tangible personal property to utilize Method Two A for apportioning income to Missouri. According to Governor Nixon, “This clarification to state tax law will ensure a level playing field for technology and service-based companies located in the Show-Me State.”

Huelsman_PamelaThis new law becomes effective August 28, 2015 and will apply to original tax returns filed on or after August 28, 2015. If you have any questions, please contact your Brown Smith Wallace tax advisor, or Pam Huelsman, at 314.983.1392 or phuelsman@bswllc.com.

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