Missouri - New single-sales factor apportionment election 

July 29:  New law in Missouri allows taxpayers to elect single-sales factor apportionment.

Missouri H.B. 128 [PDF 124 KB] was signed into law on July 12, 2013. In addition to making certain property tax changes, the legislation adopts a new elective single-sales factor apportionment methodology.


Previously, multistate businesses could elect to use a modified single-sales factor formula or an equally weighted three-factor formula.

The numerator of the modified single-sales factor formula equals all of the taxpayer’s sales or business transacted wholly within Missouri and half of its sales or business transacted partly within and partly without Missouri.

New single-sales factor method

H.B. 128 authorizes the use of a more traditional single-sales factor methodology to determine Missouri taxable income based on total sales from transactions within Missouri divided by total sales everywhere.

For sellers of tangible personal property, a sale will not be considered a Missouri sale if the purchaser's destination point is outside Missouri (which is determined without regard to the F.O.B. point or other conditions of the sale).

Furthermore, the legislation adopts an ultimate destination rule. Specifically, the destination point will not be Missouri if the purchaser received the tangible personal property from the seller in Missouri for delivery to the purchaser's location outside Missouri.

No throwback rule

As with the modified single-sales factor election, there is no throwback rule that applies to receipts from sales of tangible personal property that are destined to states where the taxpayer is not taxable.

For purposes of the new election, the legislation does not adopt any new, specific rules for determining whether a sale of other than tangible personal property will be considered a sale from a transaction in Missouri.

Effective date is uncertain

There is no specific effective date for the new apportionment election. As such, the new election arguably is effective on August 28, 2013—i.e., 90 days after the Missouri legislature adjourned sine die.

For more information, contact a KPMG State and Local Tax professional:

Guy Creveling


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