Brennan v. Director of Revenue

Less than two years ago, this Court held that “the critical distinction between an income tax and franchise tax is that the former is imposed to compensate the state for benefits already received, while the latter is imposed and payable in advance for the privilege of exercising the right to do business in the state in the future.” Herschend v. Director of Revenue, 896 S.W.2d 458, 460 (Mo. banc 1995), citing Educational Films Corp. v. Ward, 282 U.S. 379, 388, 51 S.Ct. 170, 171-72, 75 L.Ed. 400 (1931). As we explained, “if a corporation ceases to do business during a particular year in which…