[9244]
VIA FAX
September 15, 1997
TO: TAX COMMITTEE No. 28-97
RE: MISSOURI - PENDING TAX LEGISLATION AFFECTING MUTUAL FUND
SERVICE COMPANIES
______________________________________________________________________________
We recently learned that Missouri is considering legislation that would subject to the
Missouri corporate income tax "any investment funds service corporation organized as a
corporation or S corporation which has any shareholders residenced in this state" (a copy of this
proposal is attached). The version of the bill approved by the house would limit the provision
to corporations organized in Missouri, while the version approved by the senate does not
contain this limitation.
No definition of the term "investment funds service corporation" is included in the
proposal. However, based upon a proposed definition of this term for purposes of another
pending proposal, it appears that the term may be intended to include only corporations doing
business in Missouri. Attached is the definition of an "investment funds service corporation"
that would apply for purposes of the other pending proposal; the other proposal would reduce
the tax burden of companies located in Missouri that provide services to investment companies.
The conference to resolve the differences between the house and senate versions of the
bill will be on Wednesday, September 17.
If the proposal is enacted in a form that attempts to subject corporations to taxation in
Missouri merely because they have Missouri shareholders, it appears that the provision would
be unconstitutional.
If you have any questions regarding this matter, please call the undersigned at
(202) 326-5837.
We will keep you informed of developments.
Anne M. Barr
Associate Counsel - Tax
Attachments