PURPOSE: This rule sets forth the requirements for the filing of Missouri consolidated income tax returns by affiliated groups or corporations.

Editor’s Note: The secretary of state has determined that the publication of this rule in its entirety would be unduly cumbersome or expensive. The entire text of the material referenced has been filed with the secretary of state. This material may be found at the Office of the Secretary of State or at the headquarters of the agency and is available to any interested person at a cost established by state law.

1. (1) Authority for Regulation. This rule is promulgated under the general regulatory powers granted to the director of revenue and the specific authority set forth in section 143.431.3(5), RSMo relating to Missouri consolidated income tax returns.

2. (2) Applicability of Regulation. Except as provided in subsection (2)(A) of this rule, this rule shall apply only with respect to taxable years of an affiliated group which began on or after January 1, 1973.

   1. (A) If the common parent has a taxable period which includes parts of each of the years 1972 and 1973, this rule shall apply with respect to the determination of tax and taxable income of the affiliated group for the 1972-73 taxable period, provided that the affiliated group has elected to determine its tax and taxable income for that period pursuant to the provisions of sections 143.011—143.996, RSMo and the election has been filed with the director of revenue on or before the due date (including extensions of time) for the filing of the separate Missouri return of the common parent for its 1972-73 taxable period.
3. (3) Affiliated group. The term affiliated group means those members of an affiliated group of corporations as defined by Internal Revenue Code (IRC) Section 1504 and the applicable treasury regulations which participate or are required to participate in the filing of a federal consolidated income tax return for the taxable year.
4. (4) Missouri consolidated return year. The term Missouri consolidated return year means a taxable year for which a Missouri consolidated return is filed or required to be filed by an affiliated group under this rule.
5. (5) New member. The term new member shall mean a corporation which is a member of an affiliated group during the current Missouri consolidated return year but which was not a member of the group for the immediately preceding Missouri consolidated return year.
6. (6) Multistate Tax Compact. The term Multistate Tax Compact shall mean the Multistate Tax Compact as enacted into law in Missouri as section 32.200, RSMo.
7. (7) IRC Section. The term IRC section shall mean the pertinent provision of the Internal Revenue Code for the taxable year.
8. (8) Treas. Reg. Section. The term Treas. Reg. Section shall mean the pertinent provisions of the regulation promulgated by the United States Treasury for the taxable year.
9. (9) Sections 143.011—143.996, RSMo. The term sections 143.011—143.996, RSMo shall mean the Missouri Income Tax Law which became effective on January 1, 1973 and applies with respect to taxable periods beginning on or after January 1, 1973. To the extent that sections 143.011—143.996, RSMo, by virtue of section 143.009, RSMo, are made applicable to other taxable periods, the term sections 143.011—143.996, RSMo also shall refer to those other taxable periods.
10. (10) Director of revenue. The term director of revenue, except as otherwise specifically provided in this rule, shall mean the director of revenue or his/her duly authorized agent or designee.
11. (11) Computing Missouri consolidated taxable income from all sources. The Missouri consolidated taxable income (all sources) of an affiliated group shall be its federal consolidated taxable income for the taxable year, adjusted to reflect the modifications provided in section 143.121, RSMo and the applicable modifications provided in section 143.141, RSMo. There shall be subtracted the federal income tax deduction provided in section 143.171, RSMo. There shall be subtracted, to the extent included in federal consolidated taxable income, corporate dividends from sources within Missouri.
12. (12) Computing Missouri consolidated taxable income from Missouri sources. The Missouri consolidated taxable income (Missouri sources) of an affiliated group shall be so much of its Missouri consolidated taxable income (all sources) as is derived from sources within Missouri pursuant to the interstate division of income rules set forth in section (21) of this rule. If only part of the Missouri consolidated taxable income (all sources) is derived from sources within Missouri, the Missouri consolidated taxable 12 CSR 10-2

income (Missouri sources) shall only reflect the effect of the following listed deductions to the extent applicable to Missouri:

1. (A) The deduction for federal income tax provided in section 143.171, RSMo; and
2. (B) The effect on Missouri consolidated taxable income (all sources) of the deduction for consolidated net operating loss allowed by IRC Section 172 and the applicable Treas. Reg. issued under IRC Section 1502.

1. (13) Extent Applicable to Missouri. The extent applicable to Missouri, referred to in section (12) of this rule, shall be determined by multiplying the amount that would otherwise affect Missouri consolidated taxable income (all sources) by the ratio of Missouri consolidated taxable income (Missouri sources) for the year divided by the Missouri consolidated taxable income (all sources) for the year. For the purpose of the preceding sentence, Missouri consolidated taxable income shall not reflect the deductions listed in subsections (12)(A) and (B) of this rule.

2. (14) Qualifying for Privilege to File Consolidated Return. An affiliated group (other than one which is required to file a Missouri consolidated return for the year) shall be qualified to file a Missouri consolidated return if—

   1. (A) It files a federal consolidated return for the taxable year;
   2. (B) The interstate division of income percentage of the affiliated group for the year, determined under section (21) of this rule, is fifty percent (50%) or more;
   3. (C) Each corporation which has been a member of the affiliated group during any part of the taxable year for which the Missouri consolidated return is to be filed consents to this rule in the manner provided in sections (27)—(29) of this rule; and
   4. (D) The affiliated group is not disqualified from filing a Missouri consolidated return for the year under section (19) of this rule.
3. (15) Election to File. If an affiliated group qualified to file a Missouri consolidated return wishes to elect to file a Missouri consolidated return, the election must be exercised by the filing of a Missouri consolidated return on or before the due date (including extensions of time) for the filing of the common parent’s separate Missouri return.
4. (16) Election Irrevocable. The exercise of an election to file a Missouri consolidated return is irrevocable and may not be withdrawn after the due date (including extensions of time) for the filing of the common parent’s separate Missouri return.
5. (17) Transitional Rule. For the special transitional rule with respect to taxable years ending before the filing of the first Missouri consolidated income tax regulation with the Office of the Missouri Secretary of State, see section (44) of this rule.
6. (18) Continued Filing Requirement. Except as provided in sections (35)—(38) of this rule, an affiliated group which filed (or was required to file) a Missouri consolidated return for the immediately preceding taxable year is required to file a Missouri consolidated return for the current taxable year without regard to whether it derived fifty percent (50%) or more of its Missouri consolidated taxable income (all sources) for the current year from sources within Missouri.
7. (19) Disqualification to File. If an affiliated group filed (or was required to file) a Missouri consolidated return for the immediately preceding taxable year and, by virtue of sections (35)—(38) of this rule, it does not file or is not permitted to file a Missouri consolidated return for the current taxable year, then it shall not be qualified to file a Missouri consolidated return for a period of five (5) years after its last preceding Missouri consolidated return year.
8. (20) Filing Consolidated Return is Special Circumstances. Notwithstanding that an affiliated group may be disqualified to file a Missouri consolidated return for the current taxable year under section (19) of this rule, the director of revenue him/herself, subject to the terms and conditions as s/he may prescribe, may permit the affiliated group to file a Missouri consolidated return for the current taxable year. Application for permission shall be directed to the personal attention of the director of revenue him/herself, shall be made in writing and shall set forth in detail the factual and legal arguments which the director of revenue is being requested to consider. No application for permission shall be deemed to be granted until the affiliated group receives written permission bearing the signature of the director of revenue him/herself.

9. (21) Interstate Division of Income Rules for First Missouri Consolidated Return Year. In the determination of that portion of the Missouri consolidated taxable income (all sources) as is derived from sources within Missouri, the affiliated group shall select in its first Missouri consolidated return year, one (1) of the applicable interstate division of income methods set forth in the following subsection:

   1. (A) Method Under Section 143.451.2., RSMo. If each member of the affiliated group, if filing separate Missouri returns, would qualify to determine that portion of its Missouri taxable income as is derived from sources within Missouri by application of the interstate division of income methods set forth in section 143.451.2., RSMo, then the affiliated group, as a whole, shall use either—

      1. 1. The single factor sales (business

transactions) method provided in section 143.451.2., RSMo; or

1. 2. The uniform method for division of

income provided in the Multistate Tax Compact and the corresponding rules of the Missouri Department of Revenue;

1. (B) Method Under Section 143.451.4.— 143.451.6., RSMo. If each member of the affiliated group, if filing separate Missouri returns, would qualify to determine that portion of its Missouri taxable income as is derived from sources within Missouri by application of the interstate division of income methods, set forth in section 143.451.4—143.451.6., RSMo (and each member uses the same method), then the affiliated group, as a whole, shall use either—

   1. 1. The applicable method set forth in

section 143.451.4.—143.451.6., RSMo; or

1. 2. The uniform method for division of

income provided in the Multistate Tax Compact and the corresponding rules of the Missouri Department of Revenue;

1. (C) Method Under Section 143.461, RSMo. If each member of the affiliated group, if filing separate Missouri returns, would qualify to determine that portion of its Missouri taxable income as is derived from sources within Missouri by application of the elective division of income method approved under section 143.461, RSMo (and each member uses the same approved method) then the affiliated group, as a whole, shall use either—

   1. 1. The elective division of income

method approved under section 143.461, RSMo; or

1. 2. The uniform method for division of

income provided in the Multistate Tax Compact and the corresponding rules of the Missouri Department of Revenue;

1. (D) Members to Which Different Interstate Division of Income Methods Apply—General Rule. If the affiliated group is composed of a membership such that if separate Missouri returns were filed by each member, the same interstate division of income method under section 143.451.2., RSMo (relating to general business corporations), 143.451.4., RSMo (relating to railroads, and the like), 143.451.5., RSMo (relating to interstate bridges), 143.451.6., RSMo (relating to telephone or telegraph companies) or 143.461, RSMo (other approved methods) would not apply to each member, then the affiliated group, as a whole, shall determine that portion of its Missouri consolidated taxable income (all sources) as is derived from sources within Missouri by application of—

   1. 1. The uniform method for division of

income provided in the Multistate Tax Compact and the corresponding rules of the Missouri Department of Revenue; or

1. 2. The percentage obtained by the

method set forth in subsection (21)(E) of this rule; and

1. (E) Members to Which Different Interstate Divisions of Income Methods Apply— Special Rule. If an affiliated group is of a type described in subsection (21)(D) of this rule and it elects to use the interstate division of income method referred to in paragraph (21)(D)2. of this rule, it shall arrive at an interstate division of income percentage in the following manner:

   1. 1. Each member shall determine its own

federal taxable income (loss) for the year, computed as though a separate federal income tax return had been filed by each member for the year. For the purposes of this paragraph, the separate federal taxable income (loss) of each member shall not reflect the deduction for net operating loss allowable by IRC Section 172 and shall not reflect dividend income from sources within Missouri;

1. 2. Each member shall adjust its own

separate federal taxable income (loss) so determined to reflect the modifications provided in sections 143.121 and 143.141, RSMo applicable to those members. If, as a result of the computation contained in this paragraph (21)(E)2., a member has a separate Missouri taxable loss for the year, that member, for purposes of subsection (21)(E), shall be considered to have had a positive Missouri taxable income for the year in an amount equal to the loss;

1. 3. The amount determined pursuant to

paragraphs (21)(E)1. and 2., for the purposes of subsection (21)(E), shall be considered the separate Missouri taxable income (all sources) of each member for the year;

1. 4. Each member shall determine that

portion of its own separate Missouri taxable income (all sources) as is derived from sources within Missouri by application of whichever interstate division of income method under section 143.451 or 143.461, RSMo is applicable to each member; and

1. 5. The combined amounts of the Mis-

souri taxable income (Missouri sources) of each member, so determined, shall be divided by the combined amounts of the Missouri taxable income (all sources) of each member, so determined, to arrive at a percentage and the percentage thus obtained shall be deemed to be that percentage of the Missouri consolidated taxable income (all sources) as is derived from sources within Missouri. (22) Intercompany Transactions. For the purposes of determining the amount of sales or business transactions under the interstate division of income methods provided in sections 143.451.2. and 143.461, RSMo and in the Multistate Tax Compact, the term sales and business transactions shall include all intercompany sales (business transactions) as defined in Treas. Reg. Section 1.1502—13.

1. (23) Subsequent Missouri Consolidated Return Years. In the determination of Missouri consolidated taxable income (Missouri sources) for its second and succeeding Missouri consolidated return years, the affiliated group shall use the same interstate division of income method as it used in its first year, unless the group is permitted to change its method pursuant to section (24) of this rule.
2. (24) Change of Interstate Division of Income Method. An affiliated group, upon written application to the director of revenue, may change its interstate division of income method if, by use of the new method, the interstate division of income percentage for the year of change, determined under section

3. (21) of this rule, is fifty percent (50%) or more and the interstate division of income percentage, determined under section (21) of this rule, for each of the two (2) preceding Missouri consolidated return years would have been fifty percent (50%) or more.

   1. (A) The application shall be submitted on or before the due date (including extensions of time) for the filing of the Missouri consolidated return for the year of change. The application shall be directed to the personal attention of the director of revenue him/herself, shall be made in writing and shall set forth in detail all factual data in support of the requirements set forth in section (24). No application for permission shall be deemed to be granted until the affiliated group receives written permission bearing the signature of the director of revenue him/herself.

4. (25) Computation of Tax Liability. The Missouri income tax liability of an affiliated group for a Missouri consolidated return year shall be determined by adding together—

   1. (A) The tax imposed by section 143.071, RSMo on the Missouri consolidated taxable income (Missouri sources) for each year;
   2. (B) The additions to tax imposed by section 143.741, RSMo; and
   3. (C) The additions to tax and penalties imposed by section 143.751, RSMo.
5. (26) Liability For Tax. The common parent corporation and each subsidiary which was a member of the affiliated group during any part of the Missouri consolidated return year shall be jointly and severally liable for the tax computed in accordance with this rule, together with the interest on the tax, computed in accordance with section 143.731, RSMo. No agreement entered into by one (1) or more members of the affiliated group with any other member of the group or with any other person in any case shall have the effect of reducing the liability prescribed.
6. (27) Consent to This Rule. The consent of a corporation referred to in subsection (14)(C) of this rule shall be made by the corporation joining in the making of a Missouri consolidated return for the year. Each subsidiary member of an affiliated group, with respect to the first Missouri consolidated return year in which it is a member of the affiliated group, shall execute a Missouri Form 22 (Authorization and Consent of Subsidiary Corporation to be Included in a Missouri Consolidated Income Tax Return). The willful failure of a subsidiary member of an affiliated group to execute a Missouri Form 22 shall be deemed to constitute a request by the affiliated group to discontinue, for good cause, the filing of a Missouri consolidated return with respect to the year of the failure and all Missouri consolidated return years after that. The affiliated group, however, shall continue to be subject to section (18) of this rule unless and until the director of revenue grants written permission to the affiliated group to discontinue the filing of Missouri consolidated returns.
7. (28) Consent Under Facts and Circumstances. If a subsidiary member of an affiliated group fails to execute a Missouri Form 22, the director of revenue may determine, under the facts and circumstances, that the member has joined in the making of the Missouri consolidated return of the affiliated group.
8. (29) Failure to Consent Due to Mistake. If any member of an affiliated group has failed to join in the making of a Missouri consolidated return and the common parent establishes to the satisfaction of the director of revenue that the failure was due to a mistake of law or fact, or to inadvertence, then the member shall be allowed to file a Missouri Form 22 and join in the making of the Missouri consolidated return.
9. (30) Consolidated Return Made by Common Parent. The Missouri consolidated return shall be made by the common parent on Missouri Form 20 and shall be filed by the common parent.

10. (31) Attachments to Missouri Form 20. In addition to those matters required of all corporations, an affiliated group shall be required to submit the following items: 12 CSR 10-2

    1. (A) A Missouri Form 22 must be executed by each subsidiary member of an affiliated group and must be attached to the Missouri Form 20 for the first Missouri consolidated return year;
    2. (B) For the second and succeeding Missouri consolidated return years, a Missouri Form 22 must be filed by each member of an affiliated group which is a new member for the year; and
    3. (C) The affiliated group shall attach to its Missouri Form MS a detailed schedule which the interstate division of income data of each member of the affiliated group is set forth.
11. (32) Common Parent as Agent for All Other Members. The common parent, for all purposes other than the making of the consent required by subsection (14)(C) of this rule, shall be the sole agent for each subsidiary member in the affiliated group, duly authorized to act in its own name in all matters relating to the Missouri tax liability for the Missouri consolidated return year. No subsidiary member shall have authority to act for or to represent itself in any matter. For example, all correspondence will be carried on directly with the common parent; the common parent shall file for all extensions of time, including extensions of time for payment of Missouri tax; notices of deficiencies will be mailed to the common parent and the mailing only to the common parent shall be considered as a mailing to each subsidiary member in the affiliated group; notice and demand for payment of taxes will be given only to the common parent and the notice and demand will be considered as a notice and demand to each subsidiary member; the common parent will file petitions and conduct proceedings before the director of revenue and the State Tax Commission; and any petition shall be considered as also having been filed by each subsidiary. The common parent will file claims for refund or credit and any refund will be made directly to and in the name of the common parent and will discharge any liability of Missouri in respect to that refund to any subsidiary member; and the common parent in its name will execute closing agreements and all other documents and any agreement or any other documents so executed shall be considered as having also been given or executed by each subsidiary member. Notwithstanding the provisions of this section, any notice of deficiency, in respect to the tax for a Missouri consolidated return year, will name each corporation which was a member of the affiliated group during any part of the period (but a failure to include the name of any member will not affect the validity of the notice of deficiency as to the other members); any notice and demand for payment will name each corporation which was a member of the affiliated group during any part of the period (but a failure to include the name of any member will not effect the validity of the notice and demand as to the other members); and any other proceeding to collect the amount of any assessment, after the assessment has been made, will name the corporation from which the collection is to be made. The provisions of this section shall apply whether or not a Missouri consolidated return is made for any subsequent year and whether or not one (1) or more subsidiaries have become or have ceased to become members of the affiliated group at any time. Notwithstanding the provisions of this section, the director of revenue, upon notifying the common parent, may deal directly with any subsidiary member of the affiliated group with respect to its liability, in which event that member shall have full authority to act for itself.
12. (33) Notification of Deficiency to Corporation Which Has Ceased to be a Member of an Affiliated Group. If a subsidiary has ceased to be a member of an affiliated group and if the subsidiary files written notice of the cessation with the director of revenue, then the director of revenue, upon written request of that subsidiary, will furnish it with a copy of any notice of deficiency with respect to the tax for a Missouri consolidated return year for which it was a member and a copy of any notice and demand for payment of the deficiency. The filing of the written notification and request by a subsidiary corporation shall not have the effect of limiting the scope of the agency of the common parent provided in section (32) of this rule and a failure by the director of revenue to comply with the written request shall not have the effect of limiting the liability of the corporation provided in section (26) of this rule.
13. (34) Effect of Dissolution of Common Parent. If a common parent contemplates dissolution, or is about to be dissolved, or if for any other reason its existence is about to terminate, it shall notify the director of revenue of that fact and designate, subject to the approval of the director of revenue, another member of the affiliated group to act as agent in its place to the same extent and subject to the same conditions and limitations as are applicable to the common parent. If the notice thus required is not given by the common parent, or the designation is not approved by the director of revenue, the remaining members of the affiliated group, subject to the approval of the director of revenue, may designate another member of the group to act as the agent and notice of that designation shall be given to the director of revenue. Until a notice in writing designating a new agent has been approved by the director of revenue, any notice of deficiency or other communication mailed to the common parent shall be considered as having been properly mailed to the agent of the affiliated group; or if the director of revenue has reason to believe that the existence of the common parent has terminated, if s/he deems it advisable, s/he may deal directly with any member of the affiliated group with respect to its Missouri consolidated tax liability.
14. (35) Automatic Termination of Right to File Missouri Consolidated Return. The right of an affiliated group to file a Missouri consolidated return for the taxable year shall be dependent upon that group filing a federal consolidated return for the same year. Upon the discontinuance of the filing of a federal consolidated return, the filing of a Missouri consolidated return shall similarly be discontinued.

15. (36) Permission to Discontinue Filing Missouri Consolidated Return—Substantial Change in Law or Regulation. Upon timely written application to the director of revenue, an affiliated group may discontinue the filing of a Missouri consolidated return for the taxable year (or may withdraw a Missouri consolidated return previously filed for the taxable year) if the net result of all amendments to sections 143.011—143.996, RSMo and the corresponding rules with effective dates commencing within the taxable year has a substantial adverse effect on the Missouri consolidated tax liability of the affiliated group for that year relative to what the aggregate Missouri tax liability would be if the members of the affiliated group filed separate Missouri returns for the year.

    1. (A) Prima Facie Substantial Change. The difference between the Missouri consolidated tax liability, taking into account the changes in the law or regulations effective for the year and the aggregate Missouri tax liability of the members of the affiliated group computed as if each member filed a separate Missouri return for the year, also taking into account the changes in the law or regulations effective for the year (postlaw difference) shall be compared with the difference between the Missouri consolidated tax liability of the affiliated group for the taxable year, without regard to the changes in the law or regulations, and the aggregate Missouri tax liability of the members of the affiliated group computed as if separate Missouri returns had been filed by the members for the year, also without regard to the changes in the law or regulations (prelaw difference). If the postlaw difference is one hundred fifteen percent (115%) greater than the prelaw difference and that difference is at least five thousand dollars ($5,000), a substantial adverse change shall be deemed to have occurred.

    2. (B) Timely Application. Any application to discontinue the filing of Missouri consolidated returns on account of section (36) shall be made in writing to the director of revenue on or before the later of—

       1. 1. The due date (including extensions of

time) for the filing of the Missouri consolidated return for the taxable year; or

1. 2. Ninety (90) days after the effective

date of the Missouri law or Missouri Department of Revenue regulation on account of which a substantial change is alleged to have occurred.

1. (37) Permission to Discontinue Filing Missouri Consolidated Returns For Good Cause. Upon the timely written application by the affiliated group and upon showing of good cause for the action, the director of revenue may permit the affiliated group to discontinue the filing of Missouri consolidated returns upon the terms and conditions as s/he may prescribe.

   1. (A) Fifty Percent (50%) Rule as Good Cause. For purposes of section (37), good cause shall be deemed to exist if the interstate division of income percentage of the affiliated group, determined under section (21) of this rule, is less than fifty percent (50%) for the Missouri consolidated return year with respect to which permission to discontinue filing is requested and for each of the three

2. (3) preceding years.

   1. (B) Timely Application. Any application for permission to discontinue the filing of a Missouri consolidated return on account of section (37) shall be made to the director of revenue on or before the due date (including extensions of time) for the filing of the Missouri consolidated return for the year.
3. (38) Revocation of Right to File Missouri Consolidated Return. The director of revenue, upon finding that the filing of Missouri consolidated returns by the affiliated group does not clearly reflect the Missouri taxable income derived from sources within Missouri and for the purpose of preventing avoidance of Missouri tax liability, may terminate the right of an affiliated group to continue the filing of Missouri consolidated returns or, in the alternative, s/he may distribute, apportion or allocate items of income, deductions, credits or allowances between or among the members of the affiliated group so that the portion of the Missouri consolidated taxable income (all sources) as is derived from sources within Missouri is clearly reflected. The procedure outlined in sections 143.611—143.691, RSMo inclusive, shall be applicable to actions of the director of revenue under section (38).
4. (39) Estimated Tax on Consolidated Basis. Beginning with its third Missouri consolidated return year, an affiliated group shall file its declaration of estimated tax on a consolidated basis for that year and for each subsequent Missouri consolidated return year. The group shall be treated as a single corporation for purposes of sections 143.531 and 143.541, RSMo (relating to the declaration and payment of estimated tax). If separate Missouri returns are filed by the members for a taxable year, the amount of any estimated tax payments made with respect to a Missouri consolidated declaration of estimated tax for that year shall be credited against the separate Missouri tax liabilities of the members in any manner designated by the common parent which is satisfactory to the director of revenue. The consolidated declaration of estimated tax shall be filed and payment shall be made by the common parent.
5. (40) Estimated Tax on Separate Basis. For each taxable year preceding the third Missouri consolidated return year, each member of the affiliated group shall be treated as a separate corporation for the purposes of sections 143.531 and 143.541, RSMo. For the first two (2) Missouri consolidated return years, the amount of any estimated tax payments made for the year by the members of the affiliated group shall be credited against the Missouri consolidated tax liability of the affiliated group for that year. A statement shall be attached to the declaration setting forth the name, address and federal employer identification number of each member of the affiliated group as well as the amount of declaration of estimated tax payments by each member together with the date of each payment.

6. (41) Additions to Tax For Failure to Pay Estimated Tax on Consolidated Basis. If the affiliated group is required to file a Missouri consolidated declaration of estimated tax under section (39) of this rule, then, if the group—

   1. (A) Files a Missouri consolidated return for the taxable year with the term tax shown on the return, for the purposes of section 143.761.4(1), RSMo, the tax shall be shown on the Missouri consolidated return for the preceding taxable year, and the term facts shown on the return, for purposes of section 143.761.4(4), RSMo, the facts shall be shown on the Missouri consolidated return for the preceding taxable year; or
   2. (B) Does not file a Missouri consolidated return for the taxable year, the term amount, if any, of the installment paid by any member, for the purposes of section 143.761.2(2), RSMo, an amount shall be apportioned to that member in a manner designated by the common parent which is satisfactory to the director of revenue. For the purposes of section 143.761.4(1), RSMo, the tax shown on the return for any member shall be the portion of the tax shown on the Missouri consolidated return for the preceding year allocated to that member in a manner designated by the common parent which is satisfactory to the director of revenue. For purposes of section 143.761.4(4), RSMo, the facts shown on the return shall be the facts shown on the Missouri consolidated return for the preceding year and the tax computed under that section shall be allocated to the members in a manner designated by the common parent which is satisfactory to the director of revenue.
7. (42) Additions to Tax For Failure to Pay Estimated Tax on Separate Basis. If the members of an affiliated group are treated as separate corporations for the taxable year under section (40) of this rule and the affiliated group files a Missouri consolidated return for the year, then, for the purposes of section 143.761.2(1), RSMo, the tax shown on the return for any member shall be the portion of the tax shown on the Missouri consolidated return allocable to that member in a manner designated by the common parent which is satisfactory to the director of revenue.
8. (43) Applicability of Other Laws. Any matter in the determination of which the provisions of this rule are not applicable shall be determined in accordance with sections 143.011—143.996, RSMo and corresponding rules.

9. (44) Transitional Rules. The rules set forth in this section only shall apply during the transition period. For the purposes of this section, the term transition period shall mean a period of time beginning with the effective date of sections 143.011—143.996, RSMo and ending on the ninety-first day after the first Missouri consolidated income tax regulation (1.431-3) is filed with the secretary of state of Missouri.

   1. (A) A Missouri consolidated return which has been filed with the director of revenue but did not have attached to it a Missouri Form 22 for each subsidiary member of the affiliated group shall be a valid Missouri consolidated return only if properly executed Missouri Forms 22 are filed for each member during the transition period.
   2. (B) A Missouri consolidated income tax return which has been filed with the director of revenue may be withdrawn by the affiliated group during the transition period and separate Missouri returns shall be filed in lieu of the consolidated return by each member which is subject to Missouri income taxation.
   3. (C) Any qualified affiliated group (other than an affiliated group which has a taxable 12 CSR 10-2

year containing parts of the years 1972 and 1973) may file a Missouri consolidated return during the transition period and any payments of tax made by the members of the affiliated group on their separate Missouri returns for the year shall be credited against the Missouri consolidated income tax liability of the affiliated group in the same manner as if they constituted payments of declaration of estimated tax with respect to the first Missouri consolidated return year.

AUTHORITY: section 143.431.3(5), RSMo (1986).* Regulation 1.431-3 was first filed July 21, 1975, effective July 31, 1975.

*Original authority 1972.