Taxation Law in Missouri
John P. Barrie, Esquire
Income Tax – Sale of intangibles by non-Missouri seller to non-Missouri buyer not income from a Missouri source. Watkins Motor Lines, Inc. v. Director of Revenue, No. 10-1418 RI (Mo. AHC, September 27, 2013) C. Teer
Taxpayer, a Florida corporation doing business in Missouri and other states, sold its business, including the sale of its intangibles (good will, customer lists, software, etc.), to a buyer who was also not domiciled in Missouri. The director determined that the gain should be taxed based on the apportionment formula applied to all of the taxpayer’s income.
Held: Director’s determination reversed. The commission found that because the sale was between non-Missouri domiciled corporations, the gain is treated as non-Missouri source even though the taxpayer was engaged in business in Missouri.