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S.A.L.T. Select Developments: Mississippi

Baker Donelson's S.A.L.T. Select Developments will identify important state and local tax developments from Mississippi.

Overview

State and local taxes impact almost every taxpayer. S.A.L.T developments in any one jurisdiction can be frequent and sometimes confusing. Where multiple jurisdictions are involved, staying current with state and local tax developments can be overwhelming for any taxpayer.

To assist you with staying current on a periodic basis, Baker Donelson's S.A.L.T. Select Developments will identify one or more recent state and local tax developments from Mississippi.

July 2020

Coronavirus Tax Payment and Return Filing Responsibilities - Updates Reported (July 27): On June 30, 2020 Governor Reeves signed into law H.B. 379, The Mississippi Marketplace Facilitator Act. Under the terms of the Act marketplace facilitators with annual Mississippi sales in excess of $250,000 for any consecutive 12-month period will be required to collect and remit sales tax on sales facilitated for a third party. The Act went into effect on July 1. Details on the Act can be found here. On July 13, 2020 the Mississippi Department of Revenue published Notice 72-20-04 providing registration information for facilitators. That Notice can be found here.

June 2020

Coronavirus Tax Payment and Return Filing Responsibilities - Updates Reported (June 25): On May 29, 2020, the Mississippi Department of Revenue published information regarding the recently enacted "Mississippi COVID 19 Relief Payment Fund" which has been established to assist Mississippi small businesses impacted by the COVID-19 outbreak. According to this publication, eligible taxpayers must be a Mississippi resident or have permanent permitted location in the state prior to March 1, 2020. Further, eligible taxpayers must have 50 or fewer employees and have an active sales or withholding account with the Department. Eligible taxpayers must also have filed income tax returns in 2018, 2019 "or intends to file for 2020." The business must have been subject to a COVID-19 related business closure required by the state, municipality or county. The publication also lists the types of industries in which the taxpayer must be involved. There is no application process for this $2,000 relief payment; rather, the Department will issue the payments to eligible businesses based on tax returns filed with the Department or other information verified by other state agencies. Separately, the Department advised that there is a grant program which is administered through the Mississippi Development Authority that does require an application process, and the amount of the grant will depend upon the number of employees but may not exceed $25,000. This publication also sets forth various additional information regarding the relief payment. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities - Updates Reported (June 2): On May 29, 2020, the Mississippi Department of Revenue published guidance on its website regarding the recently created "Mississippi COVID 19 Relief Payment Fund" which is intended to assist Mississippi small businesses impacted during the pandemic. The Department is in the process of determining which businesses will be eligible for payments under this Relief Payment Fund, and the article sets forth some basic guidelines and answers. For instance, the Department states that no action is necessary to receive the $2,000 payment, and that the Department will issue payments to eligible businesses based upon tax returns filed with the Department and other information verified by other Mississippi state agencies. The Department also states in this article that the checks will be issued the week of June 1. More information can be found here.

May 2020

Coronavirus Tax Payment and Return Filing Responsibilities - Further Due Date Changes Reported (May 8): On May 5, 2020 the Mississippi Department of Revenue issued Notice 80-20-02 announcing that Mississippi has extended the due date for filing income tax returns and making first and second quarter estimated payments until July 15, 2020. The new due date applies to individual, corporate and fiduciary income tax returns. More information can be found here.

March 2020

Coronavirus Tax Payment and Return Filing Responsibilities - Further Due Date Changes Reported (March 30): In a press release issued on March 26, 2020, the Mississippi Department of Revenue stated that although the Department has not extended the time for filing sales/use tax and local tax levies, the Department is agreeing to delay the imposition of interest and penalties on any unpaid tax balance for the period covered by presidentially declared national emergency. Further, the Department noted that while it does not have the authority to extend deadlines for property taxes which are assessed and collected at local levels within the State, the Department was granted approval to extend certain other deadlines referenced in the press release. Further, the Department stated it has taken steps to suspend the accrual of interest and penalties on all new assessments and all prior liabilities, effective March 15, 2020, and will continue until the end of the national emergency. The Department also agreed to abate any penalties and interest on any audits closed during the period of the national emergency where the taxpayer agrees to settle the audit without appeal and pay the tax due. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities - Due Date Changes Reported (March 25): On March 23, the Mississippi Department of Revenue issued Notice 2020-01, which provides relief to individual and business taxpayers due to the COVID-19 pandemic. Under this Notice, the deadline to file and pay the 2019 individual income tax and corporate income tax is extended until May 15, 2020, and the first quarter 2020 estimated tax payment is also extended to May 15. The Notice states that penalty and interest will not accrue on the extension period through May 15. Further, withholding tax payments for the month of April are extended until May 15. The Notice specifically states that this extension does not apply to sales tax, use tax, or any other tax types, and that these returns for such taxes should be filed and paid on the normal due date. Further, the Notice states that the extension does not apply to payments on prior liabilities. However, the Notice acknowledges that the Department will consider an extension of time to file and pay on a case-by-case basis for taxes not extended to May 15, and that these requests should be directed to the Department's customer service line at 601.923.7700. While recognizing that these extensions do not coincide with the federal extensions, the Notice states that the Department cannot extend the deadlines beyond the fiscal year end of June 30. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities - No Information Reported (March 19): No information at the present time, but we continue to monitor.

February 2020

Sales and Use Tax: House Bill 379 has been introduced in the Mississippi Legislature. If passed, the bill will modify the definitions of "retailer," "retail sales" and "doing business" to make sales made or facilitated by a person regularly engaged in the sale or facilitation of sales of tangible personal property subject to sales tax. The bill provides other necessary definitions and authorizes the Mississippi Department of Revenue to audit marketplace facilitators. The bill can be found here.

November 2019

Income Tax: The Children's Promise Act made an income tax credit available for business enterprises engaged in commercial, industrial or professional activities operating as a corporation, limited liability company, partnership or sole proprietorship. The credit is allowed against the taxes imposed by Miss. Code Ann. Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123, for voluntary cash contributions during the taxable year to eligible charitable organizations. The amount of credit that may be utilized in a taxable year is limited to an amount not to exceed 50 percent of the total tax liability of the business enterprise for the taxes imposed by such sections of law. The aggregate of amount of tax credits available for calendar year 2019 was $5,000,000. The Mississippi Department of Revenue recently announced that all available credits for 2019 have been allocated. The Department will begin accepting applications for allocations of the 2020 credit amount after January 1, 2020. The Department has published a bulletin explaining the details of the credit that can be found here.

October 2019

Income Tax: The Mississippi Department of Revenue has proposed changes to its regulations related to the taxation of dividends. Under the new proposed regulation, dividends issued by a holding company are included in the shareholder's gross income "if such dividends have not already borne a tax in Mississippi or another state prior to the receipt of same by such shareholders." The current regulation purported to exclude from income only those dividends that had been taxed in Mississippi. The portion of the underlying statute that provided support for the current regulation (specifically by limiting the exclusion to dividends taxed in Mississippi) was held unconstitutional by the Mississippi Supreme Court in Mississippi Department of Revenue v. AT&T Corp. (No. 2015-CA-00600-SCT, Oct. 27, 2016). The proposed regulation also provides additional guidance on the taxation of dividends paid after stock is sold and when stock dividends may be taxable. The full text of the proposed regulation can be found here.

September 2019

Income Tax: The Mississippi Department of Revenue has issued Notice 80-19-002 providing guidance on changes to the Military Spouses Residency Relief Act enacted by Congress in 2018. The changes to federal law allow spouses of military personnel who move to Mississippi due to the service member spouse being posted in Mississippi for military duty to elect to use the same state of residence as the service member. The notice sets out details on how to make the election and also how to claim refunds of Mississippi taxes paid in prior open years. The full Notice is available here.

July 2019

Sales Tax: The Mississippi Sales Tax Holiday is scheduled to take place between 12:01 a.m. Friday, July 26, 2019 and 12:00 a.m. on Saturday, July 27, 2019. During the holiday period, sales tax is not due on the sale of articles of clothing, footwear, or school supplies if the sales price of a single item is less than $100.00. The Mississippi Department of Revenue has published an official guide to the Sales Tax Holiday, which is available here.

June 2019

Incentives: Sunset dates for several tax incentives were recently extended by Mississippi Legislature. These include the corporate income tax credit for certain costs incurred to relocate corporate headquarters employees into Mississippi (extended until July 1, 2022 by House Bill 695) and sales and use tax incentives created under the Major Economic Impact Act and the Growth and Property Act (extended until July 1, 2023 by Senate Bill 2133). The Mississippi Department of Revenue publishes a guide to Mississippi Tax Incentives, Exemptions and Credits that can be found here.

For more information about state and local tax developments in Mississippi, please contact:

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