Computation of Federal Income Tax Deduction for Consolidated Groups

PURPOSE: This rule sets out the formula that will be used to determine the federal income tax deduction of a member of the affiliated group for each taxable year an affiliated group of corporations filed a federal consolidated income tax return and did not file a Missouri consolidated income tax return. PUBLISHER’S NOTE: The secretary of state has determined that publication of the entire text of the material that is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. This material as incorporated by reference in this rule shall be maintained by the agency at its headquarters and shall be made available to the public for inspection and copying at no more than the actual cost of reproduction. This note applies only to the reference material. The entire text of the rule is printed here. (1) For each taxable year an affiliated group of corporations filing a federal consolidated income tax return does not file a Missouri consolidated income tax return, the federal income tax deduction of a member of the affiliated group shall be determined by applying the formula set forth as follows: (A) The group’s consolidated federal income tax liability under Chapter 1 of the Internal Revenue Code (IRC) for the same taxable year for which the Missouri return is being filed after reduction for all credits on the return, except for the credit for the overpayment of any federal tax and the credits allowed by the IRC of 1986 by Section 31 (tax withheld on wages), Section 27 (taxes of foreign countries and possessions of the United States) and Section 34 (certain uses of gasoline and special fuels) shall be multiplied by a fraction, the numerator of which shall be the federal taxable income of the member in question and the denominator of which shall be the sum of the federal taxable incomes of each member of the consolidated group with a positive federal taxable income; and (B) The product computed in subsection (1)(A) shall be multiplied by the apportionment factor of the member in question calculated under section 143.455, RSMo, or such other apportionment factor as is computed under the apportionment method applicable to the member in question. AUTHORITY: sections 143.431 and 143.961, RSMo 2016.* Original rule filed Feb. 24, 1984, effective June 11, 1984. Amended: Filed Aug. 17, 1984, effective Dec. 13, 1984. Amended: Filed Nov. 9, 2023, effective May 30, 2024. *Original authority: 143.431, RSMo 1972, amended 2004, 2007, 2018, and 143.961, RSMo 1972.