Missouri Franchise Tax

Missouri Franchise Tax is based on the company’s assets or par value of its stock, whichever is higher. A franchise tax is a state tax levied on businesses, and corporations chartered within a jurisdiction for the right to do business in that jurisdiction. It is based on the corporation’s total assets or the par value of outstanding and issued stock. Generally, a franchise tax is based on a company’s net income from its operations within a state. It’s calculated by subtracting all nonbusiness income from total net income. The result is divided by the company’s number of taxable days in the state. The company must then multiply that figure by the state’s franchise tax rate.

Who Must Pay Missouri Franchise Tax?

Regardless of their size or location, all businesses must pay the state’s franchise tax. A recent court ruling held that even out-of-state companies must pay the tax if they have assets in Missouri or their partners engage in business in the state. This is in contrast to other states that have exemptions for certain types of business activities.

Most businesses must also pay other taxes, including sales and withholding tax. Withholding tax is reported monthly or quarterly depending on the amount of employee wages withheld. To pay withholding tax, businesses must register by completing Form MODES-2699 or online through the Department of Revenue’s MyTax Missouri portal.

How to File Missouri Franchise Tax?

All domestic and foreign corporations must file Form MO-1120 or MO-1120S, Corporation Income/Franchise Tax Return, and Schedule MO-FT to determine whether they are liable for franchise tax. They must also attach a copy of the balance sheet and any other relevant documents to the return. In addition, the company must list a registered agent with a physical address in Missouri. This is to ensure that important legal and tax documents can be delivered to the company. The deadline for filing is April 15. However, companies can request an extension. If they do, they must submit Form MO-60 along with a check worth 90 percent of the tax due.

How to Pay Missouri Franchise Tax?

You can make electronic Missouri franchise tax payments through the Missouri Department of Revenue’s MyTax Missouri portal. Consulting with a tax professional is always best if you have any questions about your tax obligations.

Due Dates

The deadline to file and pay the Missouri franchise tax is on or before the 15th day of the fourth month following the end of the taxable period. For corporations following the calendar year, this deadline is April 15.