Mississippi Corporate Income Instructions

Corporate Income Instructions
Microsoft Word - CIT 2016  CIT INSTRUCTIONS.docx
Form 83-100-22-1-1-000(Rev.10/24)

CORPORATE
INCOME AND FRANCHISE TAX
INSTRUCTIONS

2024

INCOME AND FRANCHISE TAX BUREAU
PO BOX 1033
JACKSON, MISSISSIPPI 39215-1033

WWW.DOR.MS.GOV

October 2024

TABLE OF CONTENTS
GENERAL INFORMATION AND INSTRUCTIONS

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NEW LEGISLATION
WHO MUST FILE
TIME AND PLACE FOR FILING
ELECTRONIC FILING
TAXPAYER ACCESS POINT (TAP)
WHO MUST SIGN
REQUIRED FORMS AND SCHEDULES
TAX PAYMENTS
ESTIMATED TAX PAYMENTS
INTEREST AND PENALTY PROVISIONS
ACCOUNTING METHODS
ACCOUNTING PERIOD
ROUND TO THE NEAREST DOLLAR
RECORDKEEPING
TAX RATES
AMENDED RETURN

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FRANCHISE TAX

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INCOME TAX

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INSTALLMENT SALES
INTANGIBLE AND INTEREST EXPENSES
ARMS-LENGTH TRANSACTIONS
LONG TERM CAPITAL GAINS FROM SALES OF STOCK
EXTRATERRITORIAL INCOME
APPORTIONMENT/ALLOCATION
NET OPERATING LOSS (NOL) AND CAPITAL LOSS
COMBINED INCOME
PRODUCERS OF MINERAL OR NATURAL RESOURCE PRODUCTS
UNRELATED BUSINESS TAXABLE INCOME – EXEMPT ORGANIZATIONS

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INCENTIVE CREDITS AND EXEMPTIONS

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SPECIFIC INSTRUCTIONS

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FORM 83-105
FORM 83-122
FORM 83-150
FORM 83-155
FORM 83-305
FORM 83-310

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INSURANCE COMPANIES

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DISTRICT OFFICES

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APPENDIX – COUNTY CODES

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TAX CREDIT CODES

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GENERAL INFORMATION AND INSTRUCTIONS

 Use black ink when preparing the return.

Senate Bill 2858 (2016 Legislative Session) - Miss. Code
Ann. §27-13-1, §27-13-5, §27-13-7 and §27-13-67
Beginning with tax year 2018, the franchise tax will be
completely phased out over a nine-year period ending with tax
year 2027 as follows:

 To indicate a loss (negative income), use brackets around
the dollar amount.

Tax Year 2018

$2.50 per $1,000 of capital in excess of $100,000

 Attach a copy of the federal return behind the state return
including returns filed electronically. Combined filers must
attach the consolidated Federal Form 1120 (pages 1-5),
Schedule M-3 and a complete Pro-Forma Federal Return.

Tax Year 2019

$2.25 per $1,000 of capital in excess of $100,000

Tax Year 2020

$2.00 per $1,000 of capital in excess of $100,000

Tax Year 2021

$1.75 per $1,000 of capital in excess of $100,000

 Additional schedules and attachments should be stapled
to the return.

Tax Year 2022

$1.50 per $1,000 of capital in excess of $100,000

Tax Year 2023

$1.25 per $1,000 of capital in excess of $100,000

Visit our website at www.dor.ms.gov to download forms by tax
year and tax type.

Tax Year 2024

$1.00 per $1,000 of capital in excess of $100,000

Tax Year 2025

$0.75 per $1,000 of capital in excess of $100,000

TAXPAYER ACCESS POINT (TAP)

Tax Year 2026

$0.50 per $1,000 of capital in excess of $100,000

Remember, TAP is:
• Easy to use
• Convenient
• Free

Tax Year 2027

$0.25 per $1,000 of capital in excess of $100,000

Tax Year 2028

Franchise tax repealed effective January 1, 2028

Important tips to help expedite processing of your return:

Go Paperless!
With TAP, you have the option to Go Paperless. This means
that you can pay your taxes online and receive certain
correspondence electronically.

WHO MUST FILE
•

Every corporation domesticated or qualified to do business
in Mississippi must file a return even if the corporation is
inactive or not otherwise engaged in business. Such
corporation will remain subject to the filing requirements
until it is officially dissolved or withdrawn through the Office
of the Mississippi Secretary of State.

TAP email lets you know that you have new correspondence
to view online. You then logon to TAP to read the letter or
message and take appropriate action on your account. Only
you or persons you authorize can see your correspondence.
When making payments or updating profile information, you
should always log directly into TAP using your User ID and
password. TAP does not provide links containing your
transaction or personal information to any external website.

• Foreign corporations engaged in business in Mississippi or
having sources of income in this state although not qualified
to transact business in this state through the Office of the
Secretary of State are subject to the measure of the income
and franchise tax levy.

Remember, you can pay your bill online through TAP without
registering for a TAP account. For more information on TAP,
view the Electronic Filing Section of this booklet.

•

Every exempt corporate organization as described in Miss.
Code Ann. §27-7-27 or §27-7-29 and not otherwise exempt
from the income tax levy is required to make a corporate tax
filing if they have Mississippi unrelated business taxable
income. Refer to the “Unrelated Business Taxable Income
of Exempt Organizations” section of this booklet for more
information.

•

Title insurance companies and class A burial insurance
companies should use Form 83-105. Class B burial
companies, writing life, accident and health, fire and
casualty insurance companies should use Form 83-391.
Refer to the “Insurance Companies” section of this booklet
for additional information regarding Form 83-391.

NEW LEGISLATION
House Bill 624 – Effective January 1, 2024
This bill extends the credit allowed for qualified railroad
reconstruction or replacement expenditures and qualified new
rail infrastructure expenditures.
House Bill 845 - Effective July 1, 2024
This bill amends code to clarify that a charitable organization’s
annual financial statement filed with the Secretary of State’s
office must also include all forms required to be filed by the IRS
for the organization’s most recent fiscal year end.
SB 3099 – Effective January 1, 2024
This bill authorizes an income tax credit for employers who
sponsor skills training for employees that is provided or
approved by the local community or junior college.

The Mississippi combination return of corporate income and
franchise tax must be filed on or before the 15th day of the 4th
month following the close of the accounting year. A short taxable
year is considered a taxable year and must be filed on or before
the 15th day of the 4th month following the close of the short fiscal
year. If the due date falls on a Saturday, Sunday or legal holiday,

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the return is due the next business day. A business day is any
day that is not a Saturday, Sunday, or legal holiday.

submitted electronically. Please visit our website at
www.dor.ms.gov for additional information on how to file
Mississippi returns on-line and how to access approved on-line
software providers.

Extension of Time to File Return
Mississippi will follow federal return filing and extended due
dates. Taxpayers requesting an extension of time to file the
return must remit the tax due with Form 83-180 on or before the
due date of the return. The authorized extension of time to file
does not extend the time for payment of the income or franchise
tax due. Interest and penalty will apply on any underpayment of
tax.

The return must be signed by the president, vice president or
other officer of the corporation. A receiver, trustee or assignee
must sign any return which he/she is required to file on behalf
of a corporation.

The return should be mailed to:
Department of Revenue
P.O. Box 23191 Jackson, MS 39225-3191

Anyone who prepares the return but does not charge the
corporation should not complete the paid preparer section.
Generally, anyone who is paid to prepare the return must legibly
sign it and must also furnish the preparer tax identification
number (PTIN) issued by the Internal Revenue Service (IRS).

Street Address:
500 Clinton Center Drive
Clinton, MS 39056

ELECTRONIC FILING
Pursuant to the authority granted to the Department of Revenue
in Miss Code Ann Section 27-3-83 and Title 35, Part I, Chapter 4
of the Mississippi Administrative Procedures and Procedures
Code, the Department of Revenue will mandate all Corporations,
S corporations, and Partnerships with assets of $250,000 or
more to file electronically for tax years beginning on or after
January 1, 2019, and all subsequent tax years.

To be a complete return, the return should contain all the
requisite general information, as well as all summary tax
information and the basic back up schedules. Examples of the
required general information are complete name, current
address, FEIN, officer information and signature and other
information relating to the filing entity as requested on page 2 of
Form 83-105.

Failure to file returns electronically may subject taxpayers to a
penalty of twenty-five dollars ($25.00) for the first instance of
noncompliance and five hundred dollars ($500.00) for each
additional instance of noncompliance.

Examples of the summary tax information are the front page
of the return, the franchise tax schedule, the computation of net
income, the computation of the apportionment factor (if
applicable), the balance sheet, nonbusiness income schedule (if
applicable), the direct accounting income statement (if
applicable), schedules showing the computation of any tax credit
taken (such as jobs credit) and schedules showing the
computation of any major items on the return.

Please contact the Department of Revenue at (601) 923-7700 if
you are unable to comply with this mandate.
TAXPAYER ACCESS POINT (TAP)

Examples of the basic backup schedules are details of other
additions or other deductions as requested on the computation
of net income schedule, details of other additions or other
deductions as requested on other statements made a part of the
return, details of other current assets and other assets, and
details of other current liabilities and other liabilities on the
balance sheet as are normally included with the federal return.

TAP provides online access to your tax account information
24 hours a day, 7 days a week. TAP is free and convenient!
Users of TAP are able to:
• Make electronic payments of returns and assessments
• view previously filed returns and amended returns
• make address changes and view tax correspondence
• view recent account activity
• register a new business or add accounts to the business

The total tax due on the combination return must be paid in full
no later than the 15th day of the 4th month after the end of the
tax year.

Third Party Access for Tax Practitioners
Tax practitioners can have TAP access to account information
for each of your clients - from one login. First, create your own
TAP account (only one per FEIN). Once you are registered in
TAP, select "Add Access to Existing Account."

Payment Options:
• Online Payments: To pay online, go to www.dor.ms.gov,
click on Taxpayer Access Point (TAP) and follow the
instructions. Without a MARS account or a TAP login, users
are able to make estimate payments online.

Your client (taxpayer) must provide you the Letter ID and
Account ID in order for you to have access to their accounts.
All accounts you set up for third party access are found under
the "Other Taxpayers' Accounts" tab in TAP. For more
information on TAP, visit our website at www.dor.ms.gov.

•

Users cannot file Corporate Income and Franchise Tax
Returns in TAP. However, tax preparers have the ability to file
the tax returns electronically through an authorized software
provider. A copy of the complete federal return must be

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Check or Money Order Payments: To pay by check or
money order, complete the payment voucher (Form 83300), make the check or money order payable to the
Department of Revenue and mail both to P.O. Box 23192,
Jackson, MS 39225-3192.

from the Commissioner to do so. Refer to the “Producers of
Mineral or Natural Resource Products” section of this booklet for
additional information.
Every corporate taxpayer with an annual income tax liability in
excess of $200 must make estimated tax payments. At least
90% of the current income tax liability must be paid by
submitting quarterly payments. The remaining of the balance
is due by the due date of the return. The due dates for
estimated tax payments are:
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Returns should be filed on the basis of the 12-month accounting
period established by the corporation. A corporation on a fiscal
year basis must enter the beginning and ending dates of the
taxable year in the appropriate spaces on the return. No
accounting period, other than calendar year, will be recognized,
unless before its close it was definitely established as an
accounting period by the taxpayer and the books of such
taxpayer were kept in accordance therewith.

15th day of the 4th month after year end
15th day of the 6th month after year end
15th day of the 9th month after year end
15th day of the 12th month after year end

The payment is due on the next business day if the date falls
on a Saturday, Sunday or legal holiday.
Penalties may apply if the corporation does not make the
required estimated tax payments by the due date. Use Form
83-305 to determine the amount of interest and penalty on
underestimate. See detailed instructions for the form under
the “Specific Instructions” for Form 83-305 section of this
booklet.

•

All dollar amounts should be rounded to the nearest whole dollar
(no pennies). Round down to the next lower dollar amounts under
$.50 and round up to the next higher dollar amounts of
$.50 and over. For example: $2.15 becomes $2.00; $4.75
becomes $5.00; and $3.50 becomes $4.00.

Taxpayers are required to maintain an accurate and complete set
of records and other information necessary for the Department to
determine the correct amount of tax due. The records and other
information must be available for inspection by the Department
upon request at a reasonable time and location. Refusal or delay
by the taxpayer to provide documentation upon the Department’s
request will result in an assessment being made from any
information available, which shall be prima facie correct.

Late Payment: Interest and penalty are charged on taxes
paid late even if an extension of time to file is granted. The
interest is assessed from the due date until paid and is
computed at 1/2 of 1% per month.
The penalty imposed for failure to pay the tax when due
is 1/2% per month not to exceed 25% in the aggregate.

•

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Late or Non-Filer: Penalties are imposed for failure to file
a return when due on the total amount of the tax deficiency
or delinquency. The penalty is 5% per month not to exceed
25% in the aggregate. The penalty shall not be less than
$100 for income tax for failure to file a return.

Franchise Tax: $1.00 per $1,000 of capital, or fractional part
thereof, of capital surplus, undivided profits and true reserves
employed in Mississippi in excess of $100,000 (minimum tax of
$25).

Incomplete Returns: A corporation that does not file a
complete return or does not file a return within the
prescribed time may be subject to a penalty of $25 per
required attachment or schedule up to a maximum of
$500 per return.

Income Tax: 0% on the first $5,000 of taxable income and 4% on
the next $5,000 of taxable income and 5% on all taxable income
in excess of $10,000.

The purpose of this penalty provision is to ensure that sufficient
information is disclosed on the return. If major schedules (such
as the balance sheet) are omitted or incomplete, or if schedules
are consistently omitted or incomplete, then the penalty will be
imposed. The more severe or consistent the omission, the more
likely it is that the penalty will be imposed. Refer to the Required
“Forms and Schedules” section of this booklet for additional
information on what constitute a complete return.

AMENDED RETURN
File an amended return to:
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make adjustments to tax
claim a refund due to an adjustment to tax
claim a net operating loss (NOL) carryback deduction
report federal adjustments (1120X)
report IRS audit adjustments (RAR)

When to File: A taxpayer may apply to the Department for
revision of any return filed at any time within three (3) years of the
due date; or, if an extension was granted, three (3) years from the
date the return was filed. The 3-year period is not applicable to an
IRS audit; however, no additional assessment or refund will be
made more than three (3) years after the date the IRS disposes of
the tax liability in question.

Direct or Separate Accounting Method: Producers of mineral
or natural resource products and construction contractors are
required to use direct accounting in computing their taxable
income to this state. For more details, see Title 35, Part III,
Subpart 08, Chapter 06 of the Miss Administrative Code. Other
taxpayers may not employ a direct accounting or separate
accounting method unless they have obtained written authority

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Net Operating Loss (NOL): Form 83-155 must be filed with an
amended return in order to claim a net operating loss deduction.
Form 83-155 is used to make an irrevocable election to carryback
or carry forward the current year NOL. For more information
concerning net operating losses, see the “Net Operating Loss
(NOL) & Capital Loss” section of this booklet.
Internal Revenue Service Audit (RAR): To document
adjustments made as a result of an IRS audit, the Revenue Agent
Report should be attached to the Mississippi amended return.
Amended Federal: To document adjustments made as a result
of an amended federal return, a copy of the amended federal
(Form 1120X) should be attached to the amended Mississippi
return. If a consolidated amended federal return was filed, please
attach an amended Pro-Forma Federal Return, as well as the
amended consolidated federal return to the amended state return.
Any other documentation supporting the adjustments made
should also be included with the amended Mississippi return.
Attach a copy of the original filed return. Overpayments that are
not refunded will be applied to the next period for which the
corporation makes a filing.

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FRANCHISE TAX
The franchise tax is measured by the value of capital used,
invested or employed in the exercise of any power, privilege
or right enjoyed by the corporation within Mississippi. The
mode of measurement is the amount of capital of the
corporation employed or so situated as to be privileged to be
employed in this state. In determining the amount of capital,
the net book value as regularly employed in conducting the
affairs of the corporation should be accepted as prima facie
correct as to the true capital of the corporation, except where
the Commissioner determines that the book value does not
properly reflect capital employed in this state and in that
situation the Commissioner's determination of capital should
be prima facie correct.

Multistate Taxpayers: Lines 9 through 12 of Form 83-110
must be completed by multistate corporations doing
business both within and without Mississippi. Total capital of
a multistate corporation is apportioned to Mississippi in the
ratio that real and tangible personal property owned in
Mississippi and gross receipts from business carried on in
Mississippi bears to the total real and tangible personal
property owned by the corporation and gross receipts
wherever located and from wherever received.
The amount of capital apportioned to Mississippi is computed
online 13 of Form 83-110. The section of Form 83-110
concerning the assessed values of all real and personal
property in Mississippi must be completed by all
corporations. Miss. Code Ann. § 27-13-9 and § 27-13-13,
provide that the amount of the determined capital in
Mississippi should in no case be less than the assessed
value of the Mississippi property of the corporation for the
year preceding the year in which the return is due.

Form 83-110 must be completed by all corporations to indicate
the amount of capital of the corporation. All reserves that do
not represent definitely known and fixed liabilities must be
considered as elements of capital of the corporation. Amounts
designated for payment of dividends may not be excluded
unless such amounts have been definitely and irrevocably
placed to the credit of the stockholder, subject to withdrawal
on demand. Sums representing debts, notes, bonds,
mortgages due and payable, depreciation reserves, bad debt
reserves, or reserves representing valuation accounts may be
excluded (unless between affiliated companies or
shareholders).

Taxable capital is calculated on lines 15 through 18 of Form
83-110. The amount of taxable capital shown on line 18 should
be entered on line 1, Form 83-105.
For tax years ending on or after December 31, 2001, the
property and receipts of flow-through entities must be
included in a multistate corporate partner’s computation of
the apportionment ratio applied to the capital base. The
assessed value of property of flow-through entities must be
included in a multistate corporate partner's assessed value
of property when determining the alternate capital base.

Holding Corporation: A holding corporation, as defined in
Miss. Ann. Code § 27-13-1(i), is (1) any corporation owning at
least eighty percent (80%) of the value of capital stock and at
least eighty percent (80%) of the combined voting power of all
classes of capital stock of another corporation and (2) deriving
at least ninety-five percent (95%) of its gross receipts from
dividends, interest, royalties, rents, services provided to
members of an affiliated group (as defined in Section 27-737(2)(d)) to the extent of the cost of providing such services.
Per Miss. Ann. Code §27-13-1(i), in the case of a holding
corporation, the value of the capital used, invested or
employed in this state shall exclude that portion of the book
value of the holding corporation’s investment in stock or
securities of its subsidiary corporation using the ratio between
(1) the holding corporation’s investment in stock or securities
of its subsidiary corporation and (2) the holding corporation’s
total assets. Such ratio shall then be applied to the total capital
stock, surplus, undivided profits and true reserves of the
holding corporation in order to arrive at the amount of the
exclusion. The holding company exclusion is computed on line
7 of Form 83-110 and a schedule of computation must be
attached to the return for the exclusion.

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INCOME TAX
Generally, all domestic and foreign corporations having
income from sources within Mississippi must complete Form
83-122, which makes adjustments for additions to and
deductions from federal ordinary income due to differences in
federal and Mississippi laws, to arrive at net income (loss) for
state purposes.

ARMS- LENGTH TRANSACTIONS
The state definition of "arms-length" is not tied to that of the
federal definition. See Miss. Code Ann. § 27-7-9(j)(6). The
Commissioner can adjust a transaction when income has
been shifted between related parties and/or taxes have been
avoided in this state.

INSTALLMENT SALES
Mississippi does not follow federal rules concerning installment
sales. Gains from the sale of casual property will be
recognized in the year of the sale. However, the tax on the gain
may be deferred. Deferred taxes are generally paid as the
proceeds from the sale are received. However, the following
will result in acceleration of payments:

Gains from the sale of certain stocks in domestic entities are
not recognized as a part of income. However, the gain must
be reduced by losses from the sale of certain stocks in
domestic entities if the losses were incurred in the year of the
gain or within the two years preceding or subsequent to the
gain. See Miss. Code Ann. § 27-7-9(f)(10).

• Transfer, disposition, sale or disposal of the note in any
manner will result in deferred tax payments becoming
immediately due and payable.
• Liquidation, dissolution, withdrawal from this state and
certain merger transactions will result in deferred tax
payments becoming immediately due and payable.

Mississippi has not adopted federal provisions related to
Extraterritorial Income Exclusion. The amount related to this
exclusion of income on the federal return must be added
back to the Mississippi income tax return prior to the
apportionment of income. The proper placement for this
Mississippi adjustment to federal income is on Form 83-122,
line 7 titled "Other Additions Required by Law". A copy of
Federal Form 8873 should be attached to the Mississippi
return when this adjustment is being made for federal
purposes.

• Failure to comply with the necessary filing requirements.
Taxpayers who elect the installment method for federal income
tax purposes should include as a part of their return both a
Federal Form 6252 and a schedule of any differences between
the federal and Mississippi amounts.

In addition, a FSC (Foreign Sales Corporation) that is
organized under the laws of a U.S. territory is treated as a
domestic corporation and, thus, dividends received from it
are considered apportionable business income.

Taxpayers are required to add back the following to its
computation of net income:
• Intangible expenses and costs and interest expenses and
costs in relation to or in connection with the direct or indirect
maintenance or management, ownership, sale, exchange
or other disposition of intangible property.

Total Assignment of Income: If the business activity in
respect to any trade or business of the corporation occurs
within this state, and if by reason of such business activity the
corporation is not taxable in another state, the total net income
(loss) of the corporation is assigned to Mississippi.

• Royalty, patent, technical and copyright fees, licensing fees
and other similar expenses.
• Expenses and costs associated directly or indirectly with
factoring transactions or discounting transactions.

Apportionment of Business Income: If the business
activity in respect to any trade or business of a taxpayer
occurs both within and without this state, and if by reason of
such business activity the taxpayer is taxable in another
state, the portion of the net income (loss) arising from such
trade or business which is derived from sources within this
state, should be determined by apportionment in accordance
with the formulas prescribed by Title 35, Part III, Subpart 08,
Chapter 06 of the Miss. Admin. Code unless prescribed
otherwise. In such case, the taxpayer must complete Form
83-125. Multistate contractors use Form 83-124.

Intangible property includes patents, patent applications, trade
names, trademarks, service marks and similar types of
intangible assets.
Limitations: The adjustment will not apply to such portion of
intangible expenses, interest expenses and costs which are
not with a related member; or the related member is not
primarily engaged in the acquisition, use, maintenance,
management, ownership, sale, exchange, or other disposition
of intangible property; and the transaction(s) were done for a
valid business purpose.

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Mississippi law does NOT authorize combined reporting for
franchise tax; therefore, separate returns are required of all
corporations chartered to do business in Mississippi or which
are in fact doing business in Mississippi except for the
Reporting Corporation. The Reporting Corporation in a
combined filing must file a return that includes its own
franchise tax and the combined income of the group.

Allocation of Nonbusiness Income: Non-business income
(loss) shall be allocated by multistate corporations within and
without this state in accordance with the provisions of Title 35,
Part III, Subpart 08, Chapter 06 of the Miss. Admin. Code. Form
83-150 should be used only if the corporation has activities in
another state and has income, losses, expenses, or deductions
which are to be allocated ("non-business") rather than
apportioned. For a definition of what constitutes "nonbusiness" income, losses, expenses, and deductions and rules
for allocating these items, See Miss. Code Ann. §27-7-23.

Payments: Taxpayer must issue separate checks for
franchise tax due from all entities included in combined return.
Payments will not be transferred to another entity in the
combined group unless specified on the Application for
Automatic Extension, Form 83-180.

Net Operating Loss: For any taxable year ending after
December 31, 2001, the period for net operating loss
carrybacks and net operating loss carryovers is two periods
back and twenty periods forward. This is NOT in accordance
with federal carryback and carryover provisions that provide for
a five-year carryback period.

Taxpayers engaged in the trade or business of producing oil,
gas, other liquid hydrocarbons, sulfur, coal, sand, gravel and
other mineral or natural resource products, except timber,
should determine Mississippi net business income from such
activity on a direct or separate accounting basis.

A short taxable year counts as a taxable year. A taxpayer may
elect to forgo the carryback on Form 83-155. Once this election
is made, it cannot be changed.

The Mississippi gross business income from the production of
mineral or natural resources shall include: (a) sales of natural
or mineral resources produced in Mississippi and sold in this
state; (b) the market value, at the time of transfer, of all natural
or mineral resources produced in this state and transferred by
the taxpayer to another state for sale, refining, processing or
manufacturing, provided that if the natural or mineral
resources are sold by means of an "arms-length" transaction
prior to refining, processing or manufacturing, the market
value prescribed herein shall not exceed the selling price; and
(c) the market value at the time of transfer, of all natural or
mineral resources produced by the taxpayer in Mississippi and
transferred to a refinery, processing plant or manufacturing
facility of the taxpayer in Mississippi.

Form 83-155 must be completed and attached or an NOL
deduction will not be allowed. Taxpayers must indicate the
income year the NOL was applied (Column C of Form 83-155).
Capital Loss: Capital losses may be deducted only to the
extent of capital gains. Capital losses may not be used to offset
the gains of another member in a combined group filing. Any
unused capital losses are carried back three years and forward
five years. The definition of capital loss carryover, capital loss
carryback, short-term capital loss, long-term capital loss, and
similar terms are the same as for federal income tax purposes.
Form 83-155 must be completed and attached, or the capital
loss deduction will not be allowed.

A natural resource product shall be deemed to be sold in
Mississippi if it is located in this state at the time title thereto
passes to the purchaser. In the absence of specific proof of
value of natural resources at the time of transfer from the
state, the value of natural resources at the time of production
should be determined in accordance with the methods
prescribed for the determination of "gross income from the
property" for purposes of percentage depletion for federal
income tax purposes.

The tax returns of all members in a combined group should be
mailed at the same time. Do not staple all of the returns
together. Each return should be fastened separately.
Each member of an affiliated group of corporations eligible for
and electing to file in a combined income tax return must file its
own Mississippi corporate income tax return (Form 83-105) and
each corporation must complete and attach to their respective
return all applicable schedules including the schedule for
computation of net income (loss), Form 83-122. Mississippi
income tax due on the combined net income of the affiliated
group must be determined and reported by the Reporting
Corporation. In addition to the regular income tax return, the
designated Reporting Corporation must complete and attach to
its return Form 83-310. Other included members of the group
should enter "zero" on Form 83-105, page 1, line 5 and must
indicate the name and FEIN number of the Reporting
Corporation.

For tax years beginning on or after January 1, 2002, every
exempt organization, as described in Miss. Code Ann. § 27-727 or § 27-7-29 and not exempt from the income tax levy
(federal & state agencies, etc.), is required to file an income
tax return with this state if the organization:
1. Earns or receives unrelated business taxable income as
determined under IRC Section 512 or is an ESOP with an
interest in an "S" corporation, and

In case of delinquency or failure on the part of the Reporting
Corporation to report and pay the income tax due, each
included member of the affiliated group is severally liable for
the tax on a combined return and for any determined deficiency
thereon. Combined reporting is authorized only with respect to
the income tax levy.

2. Is a resident of this state, doing business in this state, or
receiving income from sources within this state.

9

day of the fourth month following the close of the tax year.

Exempt corporate organizations file Form 83-105 and any
necessary supplemental schedules. These organizations are
not subject to the franchise tax levy and should leave lines 1
through 4 blank.

While the filing deadline is also the 15th day of the fourth month
following the close of the tax year, an automatic filing
extension is granted. If a taxpayer files an extension for
federal tax purposes, the Mississippi filing deadline will be
extended through the date of the federal extension as well.

Exempt trust organizations, including employee and
retirement trust, file Form 81-110 and any necessary
supplemental schedules.

Employee Stock Ownership Plans that receive Mississippi
income as a shareholder in an "S" corporation must include
such income as a part of Mississippi taxable income. The
source of the income is determined by the "S" corporation's
activities and is reported on Form 84-132 to the ESOP
shareholder.

In computing taxable income, enter on line 1 of Form 83-122
(line 1, page 2 of Form 81-110 for trust organizations) the
amount of unrelated business taxable income before any net
operating loss and specific deduction as reported on Federal
Form 990-T. A complete and signed copy of Federal Form 990T must be attached to the Mississippi schedules as a part of the
return. Make any necessary adjustments for income/expenses
otherwise included/excluded under the income tax laws of this
state such as income from sources without this state, add- back
of nondeductible income taxes, etc.

Trust organizations must make all required tax payments by
the 15th day of the fourth month following the close of the tax
year. Generally, if a filing extension is granted for federal tax
purposes, it will be granted for state purposes as well. A copy
of the federally approved extension must be attached with the
return filing.

Corporate organizations with unrelated business taxable
income are subject to the same estimated payment
requirements as other corporate taxpayers. Corporate
organizations must make all required tax payments by the 15th

of the Jobs Tax Credit is limited to 50% of the income tax liability
attributable to the income derived from operations in this state for
that year. Any credit claimed but not used in a taxable year may
be carried forward for five (5) years.

INCENTIVE CREDITS AND EXEMPTIONS
Incentive credits may be used to offset all or part of the
corporate income and/or franchise tax liability. For any of these
credits to be allowed, schedules must be attached showing the
computations. Form 83-401 should be completed and attached
as a part of the return. If more than three income tax credits are
claimed, attach a supplemental schedule, and enter the total on
line 3 of Form 83-401.

The credit is based on the percentage of payroll for new fulltime jobs:
County Ranking

The following is a brief description of the major credits allowed
under state statutes:

Tier One
(Developed)

Premium Retaliatory Tax Credit (02)
An income tax credit is available to insurance companies that
paid additional retaliatory premium taxes to other states. The
credit can offset 100% of income tax due. No carryover is
allowed for this credit.

Tier Two
(Moderately Developed)
Tier Three
(Less Developed)

Finance Company Privilege Credit (03)
An income tax credit is provided to finance companies that paid
privilege taxes. The credit can offset 100% of income tax due.
No carryover is allowed for this credit.

Average
Minimum
Increase of Jobs

Percentage
of Payroll

20 or More

2.5%

15 or More

5%

10 or More

10%

The number of jobs must be created within 1 year and is
measured at the end of the fiscal year. They cannot be
accumulated over several years. The credit is available for
each net new full-time job created as long as the minimum
number has been achieved and maintained. The credit is for
full-time positions only and is based on the current year gross
payroll. The credit allowed shall be adjusted in the event of
payroll fluctuations during the additional five (5) years of the
credit. You cannot combine part-time jobs to add up to a fulltime job. The credit is based on filled positions and the
employees must be employed in this state and subject to
Mississippi Withholding Tax. Form 83-450 must be completed
and attached to the return. Please attach to this form, a
schedule listing the new full-time jobs created (titles/pins, date
created and payroll amount for the year).

Jobs Tax Credit (05)
A credit is allowed for increasing employment levels in certain
types of business. The business must be primarily engaged in
manufacturing,
processing,
warehousing,
distribution,
wholesaling, or research and development; or designated by
rule and regulation by the Mississippi Development Authority as
air transportation and maintenance facilities, final destination or
resort hotels having a minimum of 150 guest rooms, recreational
facilities that impact tourism, movie industry studios,
telecommunications enterprises, data or information processing
enterprises or computer software development enterprises or
any technology intensive facility or enterprises.

A job tax credit is authorized for each full-time employee
employed in a new cut and sew job by enterprises that own or
operate an upholstered household furniture manufacturing
facility. The repeal date on this provision is extended to January
1, 2026.

The amount of the credit is based on the number of new jobs
created and the county where the jobs are created. The credit
is good for a period of five (5 ) years. This credit may be used
in combination with any of the other credits. However, the total

10

taxable income. These expenses are net of any reimbursement.

A jobs tax credit is authorized for each full-time employee of
business primarily engaged in providing inland water
transportation of cargo on lakes, rivers and intracoastal
waterways. This credit is effective from and after January 1,
2019.

The Child/Dependent Care Tax Credit may be used in
combination with any other credit. The credit is equal to 50% of
the qualified day care expenses. It is not refundable. It can be
used to offset 100% of the income tax liability. Any excess
credit amount can be carried forward for up to five (5) years from
the original year in which the excess credit could not be used.

National or Regional Headquarters Tax Credit (06)
(Repealed effective July 1, 2022)
An income tax credit is available for a 5-year period for each
position assigned to the national or regional headquarters of
a business created in or transferred to Mississippi. The credit
is $500 for each new full-time employee, $1,000 for each new
full- time employee whose salary is 125% of the average
annual state wage, or $2,000 for each new full-time employee
whose salary is 200% of the average state wage. A minimum
number of twenty (20) new headquarters jobs must be
created to receive the credit. A taxpayer claiming a refund
on this credit must file a separate return; it cannot be
included in a combined return.

Reforestation Tax Credit (RTC) (10)
This credit, based on the costs incurred for certain approved
reforestation practices, is an amount equal to the lesser of 50%
of the actual cost of approved practices or 50% of the average
cost of approved practices as established by the Mississippi
Forestry Commission. In any taxable year, the maximum
amount of RTC shall not exceed the lesser of $10,000 or the
amount of income tax imposed upon the eligible owner for the
taxable year reduced by the sum of all other credits allowable
to the eligible owner.
Effective January 1, 2007, the lifetime maximum RTC that an
eligible owner may utilize is $75,000.00 in the aggregate. Any
unused portion of the RTC may be carried forward to succeeding
years. Reforested acreage on which the eligible owner receives
any state or federal cost share assistance funds to defray the cost
of an approved reforestation practice is not eligible for the RTC.
The RTC is not available to private corporations which
manufacture products or provide public utility services of any
type or any subsidiary of such corporations.

Research and Development Skills Credit (07)
This credit provides an incentive to locate full-time positions
requiring research and development skills in the state. These
positions have to be engaged in a research and development
activity. Qualification of jobs for this credit would require at a
minimum, a Bachelor’s degree in a scientific or technical field
of study from an accredited 4-year college or university,
employment in the employee’s area of expertise and
compensation at a professional level with two (2) years of
related job experience. Examples are chemist and engineers.

Gambling License Fee Credit (11)
An income tax credit provided to the licensee that paid a license
fee which is based on gross revenues of the licensee. The credit
can offset 100% of income tax due. No carryover is allowed for this
credit.

A credit of $1,000 for each full-time position requiring research
and/or development skills is available for a 5-year period. There
is no minimum number of positions that must be created to
qualify for this credit. The credit is for full-time positions only.
Part-time jobs cannot be combined to add up to a full-time job.
The credit is based on filled positions and the employees must
be employed in this state and subject to Mississippi
Withholding Tax. The credit for employees employed for less
than 12 months will be allowed based on a pro-rated portion
in the first and last years. The amount of the credit is pro- rated
based on the number of months the employee is employed in
this state divided by 12.

Mississippi Business Finance Corporation Revenue Bond
Service Credit (13)
Only debt service paid on revenue bonds issued by the
Mississippi Business Finance Corporation to finance economic
development projects to induce the location of manufacturing
facilities within this state can be taken as a credit. This credit
can be used against the taxes due from the income generated
by or arising out of the economic development project. Effective
January 1, 2014, Senate Bill 2376 amends Miss. Code Ann.
§57-10-401 to revise the term “Economic Development Project”
to include the economic development project of a related
approved company that is merged into or consolidated with
another approved company where the approved companies
are engaged in a vertically integrated manufacturing or
warehouse operation.

The total of the Research and Development Skills Credit is
limited to 50% of the income tax liability attributable to the
income derived from operations in this state for that year. Any
excess credit amount can be carried forward for up to five (5)
years from the original year in which the excess credit could
not be used.
Employer Child/Dependent Care Credit (08)
The Child/Dependent Care Tax Credit is an incentive to any
business providing dependent day care (both children and
adult) for its employees during the employee's working hours
or assisting community-provided day care. The expenses must
be incurred in the operation of a program certified by the
Mississippi Department of Health. The net cost of any contract
executed by the employer for a third party to provide dependent
care is a qualified expense. If the employer elects to provide
dependent care directly, then the qualified expenses are
expenses for staff, learning and recreational materials and
equipment, and cost associated with the construction and
maintenance of a facility. Additional eligible expenses include
costs assumed by the employer which increases the quality,
availability, and affordability of dependent care in the
community used by employees during the employee's work
hours. For facilities and equipment, the eligible expense is the
amount of depreciation expense allowable in computing

The bill also amends Miss. Code Section Ann. §57-10-449 to
extend the repeal date until October 1, 2017, the authority for
the Mississippi Business Finance Corporation to issue bonds
to finance economic development projects. For more
information on the benefits of this program contact: Mississippi
Development Authority, P.O. Box 849, Jackson, MS 392050849.

11

Ad Valorem Inventory Tax Credit (14)
This is an income tax credit for manufacturers, distributors and
wholesale or retail merchants for a certain amount of ad valorem
taxes paid on commodities, goods, wares, and merchandise held
for resale. The ad valorem credit may be claimed for each
location where such commodities, products, goods, wares, and
merchandise are found and upon which the ad valorem taxes
have been paid. An income tax credit for ad valorem is also
allowed for taxes paid on rental equipment. Rental equipment is
defined as any rental equipment or other rental items which are
held for short-term rental to the public under rental agreements that
are not subject to privilege taxes. For the 2016 taxable year and
each taxable year thereafter, the tax credit of the taxpayer shall
be the lesser of the amount of the ad valorem taxes paid or the
amount of income taxes due that are attributable to each location.
Any ad valorem taxes paid by a taxpayer that is applied toward
the tax credit may not be used as a deduction by the taxpayer for
state income tax purposes. Any unused tax credit may be carried
forward for five (5) consecutive years. Any expenses on which
the credit is calculated must be added back to taxable income.

until July 1, 2025, the franchise tax credit authorized for
telecommunications enterprises for the cost of equipment used in
the deployment of broadband technologies and to extend until July
1, 2025 the ad valorem tax exemption for equipment used in the
deployment of broadband technologies by telecommunications
enterprises.
Manufacturing Investment Tax Credit (23)
A manufacturing enterprise who falls within the definition of the
term “manufacturer” in Miss. Code Ann. § 27-65-11 and has
operated in the state for at least two (2) years is allowed a
manufacturing investment tax credit for income tax equal to 5% of
the eligible investments made by the manufacturing enterprise.
"Eligible investment" means an investment of at least
$1,000,000.00 in buildings and/or equipment for the
manufacturing enterprise.
The maximum credit that may be claimed by a taxpayer on any
project shall be limited to $1,000,000. The Manufacturing
Investment Tax Credit should not exceed 50% of the taxpayer's
state income tax liability in any one tax year net of all other credits.
Any Manufacturing Investment Tax Credit claimed but not used
may be carried forward for five (5) years from the close of the tax
year in which the eligible investment was made. For more details
on eligibility, computation of the credit, qualifying expenditures,
limitations, carryovers, as well as any necessary forms or work
sheets, please contact the Corporate Tax Division at (601) 9237700.

A copy of the tax receipt from the county that shows the
inventory valuation and a schedule showing the calculation
of the ad valorem tax paid based on the valuation must be
attached to the return.
Export Port Charges Credit (15)
An income tax credit is authorized for taxpayers that utilize the port
facilities at state, county, or municipal ports. The income tax
credit is equal to the total export cargo charges paid by the
taxpayer for: (a) receiving in the port; (b) handling to a vessel;
and (c) wharfage. The credit provided should not exceed 50% of
the amount of tax imposed upon the taxpayer for the taxable year
reduced by the sum of all other credits. Any unused portion of the
credit may be carried forward for the succeeding five (5) years.

Historic Structure Rehabilitation Credit (26)
An income tax credit is allowed for certain costs and expenses in
rehabilitating eligible property certified as a historic structure or
structure in a certified historic district. The taxpayer may elect to
receive a 75% rebate on the total amount of excess historic
rehabilitation credit in lieu of a ten-year carryforward.

Import Port Charges Credit (17)
An income tax credit is authorized for taxpayers that utilize the port
facilities at state, county, or municipal ports for the import of cargo.
To be eligible, a taxpayer must locate its United States
headquarters in Mississippi on or after January 1, 2005 employ at
least 5 permanent full-time employees who actually work at such
headquarters and have a minimum capital investment of
$5,000,000 in Mississippi. The income tax credit is equal to the
charges paid by the taxpayer for: (a) receiving in the port; (b)
handling to a vessel; and (c) wharfage. The credit provided shall
not exceed 50% of the amount of tax imposed upon the taxpayer
for the taxable year reduced by the sum of all other credits. Any
unused portion of the credit may be carried forward for the
succeeding 5 years. The maximum cumulative credit that may be
claimed ranges between $1,000,000 and $4,000,000 depending
on the number of permanent full-time employees of the taxpayer.

New Markets Credit (28)
The New Markets Credit allows a credit for income, insurance
premium, or premium retaliatory taxes to investors in eligible equity
securities issued by a Qualified Community Development Entity
that has entered into an allocation agreement with the Community
Development Financial Institutions Fund of the U.S. Treasury
Department (CDFI) with respect to federal income tax credits
authorized by the Federal NMTC Law, which includes the State of
Mississippi in the service area outlined in such agreement. This
Qualified Community Development Entity is commonly referred to
as a “CDE”.
The CDE must use 85% or more of the proceeds of the issuance
of the equity security to make investments that are Mississippi
Qualified Low-Income Community Investments (MQLICIs), and
those investments must be maintained for a minimum of seven (7)
years. A MQLICI is an investment in Mississippi in a business that
meets the requirements of a Qualified Active Low-Income
Community Business (QALICB) or an investment in Mississippi
approved as a Qualified Low Income Community Investment under
the Federal New Markets Tax Credit law. A security meeting these
requirements is commonly referred to as a “QEI”. MDA will review
the QEI to determine if it qualifies for the Mississippi New Markets
Credit. If the QEI does qualify, MDA will issue a certification of
credits allowed. The total Mississippi New Markets Credit for all
Mississippi taxpayers is capped at $15,000,000 per year.

Broadband Technology Credit (BTC) (19)
A tax credit is provided for telecommunications enterprises
making investments in equipment used in the deployment of
broadband technologies. The credit applies to both income and
franchise taxes. The credit is a percentage of the cost of the
investments incurred after June 30, 2003, and before July 1,
2013. The percentage applied is 5%, 10%, and 15% for Tier 1,
Tier 2, and Tier 3 counties respectively. For more details on
eligibility, computation of the credit, qualifying expenditures,
limitations, carryovers, as well as any necessary forms or work
sheets, please contact the Corporate Tax Division at (601) 9237700. Enterprises qualifying for this credit are able to receive
certain sales tax exemptions as well. For more information,
please contact the Sales Tax Bureau at (601) 923-7015.

Wildlife Land Use Credit (30)
Effective January 1, 2010, a state income tax credit is allowed that
provides a $5.50 per acre tax credit for certain taxpayers that allow
land to be used as a natural area preserve, wildlife refuge, wildlife
management area or public outdoor recreation area. Land must first
be approved to be suitable for the uses listed above by the

House Bill 1729 amended Miss. Code Ann. §57-87-5 to extend

12

Mississippi Commission on Wildlife, Fisheries and Parks. Any
unused credit amount may be carried forward for five (5) years
from the close of the taxable year in which the land was
approved for such a use.

pregnancy resource center or crisis pregnancy center eligible to
receive funding disbursed by the Choose Life Advisory Committee.
The credit is available to a business enterprise engaged in
commercial, industrial, or professional activities and operating as a
corporation, limited liability company, partnership, or sole
proprietorship. The credit is limited to 50% of the income tax due.
Any unused portion of the credit may be carried forward for five (5)
years. This credit is in lieu of the charitable contribution deduction.

Headquarters Relocation Credit (32)
Effective January 1, 2014, an income tax credit is authorized
under House Bill 785 for any company that transfers or relocates
its national or regional headquarters to Mississippi. The amount
of the credit is equal to the actual relocation costs paid by the
company in the taxable year.

Starting with 2024 tax year, this credit is available against ad
valorem taxes. The credit is limited to 50% of the total tax liability.
Any unused credit amount for income tax or ad valorem tax may be
carried forward for five (5) consecutive taxable years. For more
information
on
how
to
claim
the
credit
visit
www.dor.ms.gov/charitable-contribution-credits.

Relocation costs shall include those non-depreciable expenses
that are necessary to relocate headquarters’ employees to the
national or regional headquarters, including, but not limited to,
costs such as travel expenses for employees and members of
their households to and from Mississippi in search of homes and
moving expenses to relocate furnishings, household goods and
personal property of the employees and members of their
households.

Railroad Infrastructure Tax Credit (40)
A credit is available for certain new, reconstruction and replacement
expenditures made by Class II and Class III railroads. The credit is
limited to the income tax due. Any unused portion of the credit may
be carried forward for five (5) years. The total amount of credits that
may be claimed by all taxpayers shall not exceed $8,000,000 during
a calendar year. A taxpayer may transfer by written agreement any
unused tax credit to an eligible transferee at any time during the
year in which the credit is earned and five (5) years follow the year
in which the credit is earned.

The company must create twenty (20) jobs to qualify, and the
credit shall be applied to the taxable year in which the relocation
costs are paid. The credit is limited to $1,000,000 cap each
fiscal year.
Veteran Employee Credit (33)
This is an income credit for taxpayers that employ persons who
are honorably discharged veterans who served on active duty
on the Armed Forces of the United States on or after September
11, 2001, and who have been unemployed for six consecutive
months immediately prior to being employed by such taxpayers.
Likewise, this bill authorizes any tax credit claimed but not used
in any taxable year to be carried forward for five (5) consecutive
years and the aggregate amount of tax credits that may be
awarded shall not exceed $1,000,000. This bill is effective
January 1, 2016.

Blood Donation (41)
A credit is available for an employer of $20 for each verified blood
donation made by an employee as part of a blood drive. The credit
is limited to the income tax due. No carry forward is allowed for any
unused portion.
Transitional Home Charitable Contribution Credit (42)
A credit is available for voluntary cash contributions by certain
taxpayers to eligible transitional home organizations. The credit is
available to an individual and a business enterprise engaged in
commercial, industrial, or professional activities and operating as a
corporation, limited liability company, partnership, or sole
proprietorship. This credit is in lieu of the charitable contribution
deduction and is also available against ad valorem taxes. The credit
is limited to 50% of the total tax liability. Any unused credit amount
for income tax or ad valorem tax may be carried forward for five (5)
consecutive taxable years. For more information on how to claim
the credit visit www.dor.ms.gov/charitable- contribution-credits.

Business Contributions to Eligible Charitable
Organizations (36)
Effective from and after January 1, 2019, the Children’s Promise
Act authorized an income tax credit for business enterprises
that donate cash to eligible charitable organizations. The credit
is limited to fifty percent (50%) of the total tax liability and may
be carried forward for five (5) years.

Low-Income Health Care Services Charitable Contribution
Credit (43)
A credit is available for voluntary cash contributions by certain
taxpayers to eligible charitable organizations that contract with
physicians and/or nurse practitioners to provide health care services
to low-income residents of Mississippi. The credit is available to an
individual and a business enterprise engaged in commercial,
industrial, or professional activities and operating as a corporation,
limited liability company, partnership, or sole proprietorship. This
credit is in lieu of the charitable contribution deduction and is also
available against ad valorem taxes. The credit is limited to 50% of
the total tax liability. Any unused credit amount for income tax or ad
valorem tax may be carried forward for five (5) consecutive taxable
years. For more information on how to claim the credit visit
www.dor.ms.gov/ charitable-contribution-credits.
Food Bank Charitable Contribution Credit (45)
A credit is available for voluntary cash contributions by certain
taxpayers to eligible charitable organizations that are purchasing,
warehousing, and delivering food directly to food pantries or soup
kitchens in more than five (5) Mississippi counties on a monthly
basis. The credit is available to a business enterprise engaged in
commercial, industrial, or professional activities and operating as a
corporation, limited liability company, partnership, or sole
proprietorship. This credit is in lieu of the charitable contribution

House Bill 1729 amended Miss. Code Ann. §27-7-22.41 to
increase the aggregate amount of credits that may be awarded
during a calendar year for voluntary cash contributions by
business enterprises to eligible charitable organizations and to
revise certain provisions relating to the allocation of such credits.

Endowment Fund Charitable Credit (37)
Provides an income tax credit for donations made to endowed
funds held by community foundations. The tax credit shall be
25% of the qualified contribution made to the endowed fund with
the minimum amount being $1,000 and the maximum amount
being $500,000. If the amount of allowable credit exceeds the
amount of tax due, the excess may be carried forward for five
(5) years. This credit can be utilized by both individual and
corporate taxpayers and is effective from and after January 1,
2019.
Pregnancy Resource Charitable Contribution Credit (39)
A credit is available for voluntary cash contributions by certain
taxpayers to eligible charitable organizations, which is defined as
an organization that is exempt from federal income taxation
under Section 501(c)(3) of the Internal Revenue Code and is a

13

deduction. This credit is available against ad valorem taxes. The
credit is limited to 50% of the total tax liability. Any unused credit
amount for income tax or ad valorem tax may be carried forward
for five (5) consecutive taxable years. For more information on
how to claim the credit visit www.dor.ms.gov/ charitablecontribution-credits.

taxes due, any credit which would otherwise be passed through to
the shareholder(s) involved may be utilized against the tax liability.
Growth and Prosperity (GAP) Areas Tax Exemption
The Growth and Prosperity (GAP) Areas Tax Exemption was
created to encourage businesses to locate facilities and hire
individuals in areas that have a certain percentage of the
population below the federal poverty level or have an
unemployment rate that is 200% of the state’s average
unemployment rate.

Bank Share Credit (50)
The Bank Share Credit is a franchise tax credit that equals the
amount of all ad valorem taxes paid by banks on personal
property and on the assessed value of its intangibles to any
county, district or municipality. The credit can offset 100% of
franchise tax due. No carryover is allowed for this credit.

The income and franchise tax exemption is available for a period
of 10 years for certain businesses locating in a designated GAP
area. The eligible businesses include ones that manufacture,
process, assemble, store, warehouse, service, distribute, sell any
products or goods including products of agriculture, research and
development, and others as determined by MDA which will create
at least ten (10) jobs.

Mississippi Flexible Tax Incentive Act (MFLEX) (60)
A credit is used to offset income, franchise, withholding, sales,
and use taxes for certain qualified businesses and affiliates
certified by Mississippi Development Authority.

Businesses that cannot claim the exemption are retail
establishments, gaming businesses or casinos and electrical
generation facilities. An eligible business that constructs a new
facility or expands an existing facility located in one of the
designated GAP areas can apply to MDA to be exempted from
state and local taxes for a period of ten (10) years or until December
31, 2022, whichever occurs first.

General Restrictions on Incentive Credits
The only credits whose usage is dependent on another credit
are the Export Port Charges Credit, Import Port Charges Credit,
and the Reforestation Tax Credit (RTC). The RTC should be
used last.
The total of the Jobs Tax Credit, the Headquarters Credit and
the R & D Skills Credit cannot exceed 50% of the total income
tax due. The other credits are not limited in such a manner and
their usage will be independent of one another. When one credit
is limited to 50% of the income tax due and another one is also
limited to 50%, when combined they may offset 100% of the
income tax due.

A business that relocates from a county in Mississippi to a GAP area
is not eligible for the exemption. When filing the state income and
franchise tax return claiming the exemption, attach a schedule
showing the calculation of how the exemption was calculated, a
copy of the certification from the MDA and the completed
application, and the income and Franchise Tax Credit Summary
(Form 83-401) showing all credits taken.

It will be up to the taxpayer to list which credits are to be used
on the tax return. Please keep in mind that a number of the
credits do not have carryforward provisions. When a deduction
on the Mississippi tax return also gives rise to a tax credit, the
amount of that credit which is being used on the current return
must be added back to Mississippi income (loss) after any
apportionment of income.

The GAP Area Exemption is authorized under Miss. Code Ann. § 277-21, § 27-13-5 and § 57-80-1 through § 57-80-11. For more
information on the GAP Areas, please contact:
Mississippi Development Authority
Financial Resources Division – GAP Program
P.O. Box 849
Jackson, MS 39205

The adding back of the credit to taxable income will increase
the tax liability, which may increase the amount of credit that
may be taken. When this is the case, continue to increase the
amount of credit being used and add back to income until there
is a difference of $1,000 or less between the two. Therefore, the
credit added back may be, at most, $1,000 less than the credit
being used.
Some credits are based on a percentage of an expense, and in
this case only the credit used should be added back. Those
credits which are affected are: Finance Company Privilege,
Child/Dependent Care, Skills Training, Gaming, Rural Economic
Development (RED), Export Port Charges, Import Port Charges,
Reforestation, and Ad Valorem tax credits.
The credits allowed should not be used by any business
enterprise or corporation other than the business enterprise
actually qualifying for the credit. As a general rule, all credits
generated by the S corporation or partnership are passed
through to the shareholders based on their respective ownership
percentages. In the event that a composite return is filed on
behalf of some or all of the nonresident shareholders, or in the
event that a liability for taxes arises due to the failure to secure
an agreement from a resident shareholder or a nonresident
shareholder fails to file a return and to make timely payment of

14

SPECIFIC INSTRUCTIONS
tax computed under paragraph (a) the ratio which the
number of months falling within the earlier calendar
year bears to the total number of months in the fiscal
year; and (d) Applying to the tax comput