Mississippi Pass Through Entity Tax Return Instructions

Pass Through Entity Tax Return Instructions
Microsoft Word - Pass Through Entity 2015 Instructions.pdf
Form 84-100-22-1-1-000(Rev.12/23)

PASS-THROUGH ENTITY
INCOME AND FRANCHISE TAX
INSTRUCTIONS

2023

INCOME AND FRANCHISE TAX BUREAU
PO BOX 1033
JACKSON, MISSISSIPPI 39215-1033
WWW.DOR.MS.GOV

December 2023

TABLE OF CONTENTS

GENERAL INFORMATION AND INSTRUCTIONS

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NEW LEGISLATION
WHO MUST FILE
DEFINITIONS
TERMINATION OF S CORPORATION ELECTION
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
TREATMENT OF DISREGARDED ENTITIES

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FRANCHISE TAX (S CORPORATIONS)

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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)
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 84-105
FORM 84-122
FORM 84-131
FORM 84-132
FORM 84-150
FORM 84-155
FORM 83-305

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COMPOSITE FILING
ELECTING PASS-THROUGH ENTITY
DISTRICT OFFICES
APPENDIX – COUNTY CODES

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TAX CREDIT CODES

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House Bill 1125 – Effective February 8, 2023
This bill, called the Regulate Experimental Adolescent
Procedures (REAP) Act, prohibits deductibles paid in
association with gender transition procedures for a person
under 18 years of age to be claimed on a state income tax
return.

GENERAL INFORMATION AND INSTRUCTIONS
Important tips to help expedite processing of your return:
 Use black ink when preparing the return.
 To indicate a loss (negative income), use brackets around
the dollar amount.

House Bill 1668 – Effective January 1, 2023
This bill revises the method by which a partnership, S
corporation or other similar pass-through entity may elect to
become an “electing pass-through entity” for state income tax
purposes and provides that any additional income tax credits
generated by the electing pass-through entity shall be passed
through to the owners on a pro rata basis and that any excess
credit may be carried forward as an overpayment or refunded.
Limitations applicable to credits generated by the electing
pass-through entity shall apply at the owner, member, partner
or shareholder level. This bill applies to any income tax return
with an original due date on or after January 1, 2023.

 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.
 Additional schedules and attachments should be stapled to
the return.
Visit our website at www.dor.ms.gov to download forms by tax
year and tax type.

For more information on electing pass-through entities, see the
“Updated Guidance on Pass-Through Entity Election”, Notice
80-23-001, and the Electing Pass-Through Entity FAQs on our
website at https://www.dor.ms.gov/business/corporate-incomeand-franchise-tax.

TAXPAYER ACCESS POINT (TAP)
Remember, TAP is:
• Easy to use
• Convenient
• Free

House Bill 1671 – Effective January 1, 2023
This bill revises the requirements for a pregnancy resource
center or crisis pregnancy center to be considered an eligible
charitable organization for the Pregnancy Resource Charitable
Contribution credit. Also, the bill allows the Pregnancy Resource
Charitable Contribution credit to be used against ad valorem
taxes and increases the amount of tax credits that may be
allocated from $3,500,000 to $10,000,000. The amount of credit
that can be allocated to a single eligible charitable organization
was decreased from 50% to 25%.

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.
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.

The bill also increases the credit amount for voluntary cash
contributions to a qualifying charitable organization from $400
to $1,200 for a single individual or head of household, and from
$800 to $2,400 for a married couple filing a joint return for
calendar year 2023 and each calendar year thereafter. A credit
will also be allowed against ad valorem taxes and will be limited
to an amount not to exceed 50% of the total ad valorem tax
liability. Any credit claimed but not used may be carried forward
for five (5) years.

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.
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.

The bill also increases the credit amount for voluntary cash
contributions to a qualifying foster care charitable organization
from $500 to $1,500 for a single individual or head of household,
and from $1,000 to $3,000 for a married couple filing a joint
return for calendar year 2023 and each calendar year thereafter.
A credit will also be allowed against ad valorem taxes and will
be limited to an amount not to exceed 50% of the total ad
valorem tax liability. Any credit claimed but not used may be
carried forward for five (5) years.

NEW LEGISLATION
House Bill 261 – Effective July 1, 2023
This bill increases the maximum amount of the qualified
contribution for the endowment fund charitable credit for any
taxpayer per year from $200,000 to $500,000 and extended the
credit through 2028. The total amount of credits authorized
each year increased from $500,000 to $1,000,000. Any credit
claimed but not used may be carried forward for five (5) years.

This bill also authorizes an income tax credit, insurance
premium tax credit, and an ad valorem tax credit for business
enterprises engaged in commercial, industrial, or professional
activities for voluntary cash contributions made to an eligible
transitional home organization. The credit is limited to 50% of
the tax liability and may be carried forward for five (5) years.
The aggregate amount of credit allocated during a calendar year
shall not exceed $10,000,000. An income tax credit and ad
valorem tax credit for individuals will also be allowed for
voluntary cash contributions to an eligible transitional home
organization. The aggregate amount of credit allocated during
a calendar year shall not exceed $1,000,000.

House Bill 390 - Effective March 8, 2023
This bill revises the time a taxpayer may elect to claim a
historical rehabilitation rebate in lieu of claiming a tax credit by
allowing the election to be made at any time after the
certification of the rebate. If the taxpayer has utilized a tax
credit on an income tax return prior to making an election to
claim a rebate, then the available rebate will be reduced by the
amount of credit realized.

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The bill also authorizes an income tax credit, insurance
premium tax credit, and an ad valorem tax credit for a business
enterprises engaged in commercial, industrial, or professional
activities for voluntary cash contributions made to an eligible
charitable organization that contracts with physicians and/or
nurse practitioners to provide health care services to lowincome residents of Mississippi. The credit is limited to 50% of
the tax liability and may be carried forward for five (5) years.
The aggregate amount of credit allocated during a calendar
year shall not exceed $3,000,000. An income tax credit and ad
valorem tax credit for individuals will also be allowed for
voluntary cash contributions to an eligible charitable
organization that contracts with physicians and/or nurse
practitioners to provide health care services to low-income
residents of Mississippi.

for an employee’s children during the employee’s work hours. This
credit must be certified by the Department of Revenue.
Senate Bill 2858 – Effective July1, 2023
This bill increases the aggregate amount of investment tax credits
that may be allocated to participating investors of Mississippi
Small Business Investment Companies under the Mississippi
Small Business Investment Company Act by $45,000,000.
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:

The credit is limited to 50% of the tax liability and may be carried
forward for five (5) years. The aggregate amount of credit
allocated during a calendar year shall not exceed $1,000,000.
Each charitable organization and each taxpayer wanting to
claim any of the new credits above must apply to the
Department of Revenue for approval.
The bill also allows an income tax credit for individuals claiming
a federal income tax credit for certain dependent care
expenses. The credit is equal to 25% of the amount of the
federal income tax credit claimed on the taxpayer’s federal
income tax return. The tax credit is limited to the total income
tax liability. In order to claim the credit, the taxpayer must claim
the federal credit on their federal income tax return and must
have a federal adjusted gross income of not more than $50,000.
House Bill 1723 – Effective July 1, 2023
This bill authorizes an income tax credit, insurance premium tax
credit, and ad valorem tax credit for a business enterprises
engaged in commercial, industrial, or professional activities for
voluntary cash contributions made to an eligible charitable
organization that is 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 limited
to 50% of the tax liability and may be carried forward for five (5)
years. The aggregate amount of credit allocated during a
calendar year shall not exceed $1,000,000. Each charitable
organization and each taxpayer wanting to claim the credit must
apply to the Department of Revenue.

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

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

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

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

Tax Year 2026

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

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

WHO MUST FILE
S Corporation
Every S corporation domesticated or qualified to do business in
Mississippi, and every S corporation engaged in business in
Mississippi or having sources of income from 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 the corporation is officially dissolved or
withdrawn through the Office of the Mississippi Secretary of State.

House Bill 1733 – Effective January 1, 2023
This bill allows, for tax years beginning after December 31,
2022, a taxpayer to elect to take a full and immediate deduction
for specified research or experimental expenditures that are
paid or incurred by the taxpayer during the tax year in
connection with the taxpayer's trade or business as expenses
that are not chargeable to the capital account. Also, for tax
years beginning after December 31, 2022, expenditures for
business assets that are qualified property or qualified
improvement property shall be eligible for 100% bonus
depreciation and may be deducted as an expense during the
tax year in which the property is placed in service at the election
of the taxpayer. A taxpayer may also elect to treat the cost of
any Section 179 property that was placed in service during the
taxable year as an expense which is not chargeable to a capital
account, and any cost so treated shall be allowed as a
deduction for that year. The total of any depreciation method
or combination of methods used cannot exceed one hundred
percent (100%) of the cost of the subject property.
House Bill 1734 – Effective July 1, 2023
This bill provides a fifty percent (50%) income tax credit to any
employer that provides a child care stipend of at least $6,000
to a licensed or registered entity providing dependent child care

Tax Year 2018

Foreign S 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 franchise tax levy.
Partnership
Every partnership, LLC, or LLP, domestic or foreign, deriving
income from property owned within the State of Mississippi or
business, trade, profession or occupation carried on within the
state must file a return.
Exempt Organization
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.

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LLPs must file no later than the 15th day of the 3rd month following
the end of the fiscal year.
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.

S Corporation
"S corporation" means a corporation for which a valid election
under section 1372(a) of the Internal Revenue Code is in effect.
A corporation must file Form 84-105 if (a) it elected to be an S
corporation by filing Federal Form 2553, (b) the IRS accepted
the election, and (c) the election remains in effect. Do not file
Form 84-105 until the corporation has been notified by the IRS
that the federal election has been accepted.

The return should be mailed to:
An S corporation is not subject to income tax imposed by Miss.
Code Ann. §27-7-5 but may be subject to withholding
requirements as explained under the “Tax Payments” section
of this booklet. Also, every S corporation domesticated or
qualified to do business in Mississippi is subject to the measure
of the franchise tax levy.

Department of Revenue
P.O. Box 23191
Jackson, MS 39225-3191

Partnership
The term "partnership" includes a syndicate, group, pool, joint
venture or other unincorporated organization through or by
means of which any business, financial operation or venture is
carried on, and which is not within the meaning of a corporation,
trust or estate.

Street Address:
500 Clinton Center Drive
Clinton, MS 39056

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
and/or have returns with 100 or more K-1s to file electronically for
tax years beginning on or after January 1, 2019 and all
subsequent tax years.

A domestic or foreign limited liability company (LLC) is
classified as an entity for purposes of Mississippi income tax
laws in the same manner as the entity is classified for federal
income tax purposes. If an LLC is treated as a partnership for
federal income tax purposes, it will file as a partnership for
Mississippi purposes. If an LLC is treated as a corporation for
federal income tax purposes, it will file as a corporation for
Mississippi income and franchise tax purposes.

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.
Please contact the Department of Revenue at (601) 972-7700 if
you are unable to comply with this mandate.

In this booklet, all three entities (partnership, LLC, and LLP)
may, at times, be referred to as "partnerships" and
partners/members referred to as "partners".

TAXPAYER ACCESS POINT (TAP)

TAP provides online access to your tax account information
24 hours a day, 7 days a week. TAP is free and convenient!

Once the election is made to be treated as an S corporation, it
stays in effect until it is terminated. Mississippi considers the
election to be terminated at such time as the election is
considered terminated for federal purposes.

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, and;
• register a new business or add accounts to the business;

TIME AND PLACE FOR FILING

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." 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.

S Corporation
The Mississippi Pass-Through Entity Tax Return must be filed
on or before the 15th day of the 3rd month following the close
of the accounting year. If the due date falls on a Saturday,
Sunday or legal holiday, the return is due the next business
day. A business day is any day that is not a Saturday, Sunday
or legal holiday.
If the S election was terminated during the tax year, the due
date of Form 84-105 is on or before the 15th day of the 3rd
month following the date of termination.
Partnership
Calendar year partnerships, LLCs and LLPs must file no later
than March 15th annually. Fiscal year partnerships, LLCs and

Users cannot file Pass-Through Entity 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 submitted electronically.

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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.

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.
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S Corporation
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.

Check or Money Order Payments: To pay by check or
money order, complete the payment voucher (Form 84-300),
make the check or money order payable to the Department
of Revenue and mail both to P.O. Box 23192 Jackson, MS
39225-3192.

Pass-Through Entities may not pay tax on its income but may
choose to "pass through" any profits (losses) to its
shareholders/partners (owners). Owners must include pass
through items on their income tax returns. Individual owners are
subject to tax upon their distributive share of pass-through entity
net income, whether it is distributed to them or not. A non-resident
individual, who is a member of a pass-through entity owning
property or doing business in the State of Mississippi, is subject
to tax on his share of the pass-through entity net income, whether
distributed or not.

Partnership
The return must be signed by one general partner or limited
liability company member. If a receiver, trustee in bankruptcy,
or assignee controls the organization's property or business,
that person must sign the return.
Anyone who prepares the return but does not charge the
company 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).

If the pass-through entity does business both within and without
the state, it will be necessary to compute the income (loss) of the
pass-through entity from sources within the state in order to
determine the amount of income taxable to, or the amount of the
loss deductible by, the non-resident owners.
The non-resident shareholder/partner is subject to tax only on
such share of his income, whether or not distributed, as is
assignable to Mississippi.

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 84-105.

S Corporation
An S corporation may elect to file a composite or electing passthrough entity return and make payments of tax on behalf of its
non-resident and/or resident shareholders. For more information
on filing composite, see the “Composite Filing” section of this
booklet. If a non-resident is going to file a Mississippi nonresident individual tax return, he or she must not be included
in a composite return but should separately pay estimated
taxes as an individual using Form 80-106. For more
information on filing as an electing pass-through entity, see the
“Electing Pass-Through Entity” section of this booklet.

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 the Schedule K reflecting
information pertaining to shareholders' distributive shares of
income and deductions.

Non-Resident S Corporation Income Tax Agreement
All non-resident shareholders of Mississippi S corporations are
required to execute an agreement (a) to file a return and to make
timely payment of all taxes imposed on the shareholder by the
state of Mississippi with respect to the income of the S
corporation, and (b) to be subject to personal jurisdiction in this
state for purposes of the collection of income taxes, together with
related interest and penalties, imposed on the shareholder by this
state with respect to the income of the S corporation. Form 84380 should be filed with the S corporation and maintained by the
S corporation as a part of its permanent tax files. This form
should not be sent with the Pass-Through Entity Tax Return.

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.

In the event the S corporation fails to obtain the agreement of a
non-resident shareholder indicated above or in the event a nonresident shareholder fails to file a return and make timely
payments of all taxes imposed on the shareholder by this state,
the S corporation shall make a payment to the state in an
amount equal to the highest marginal tax rate in effect under
Miss. Code Ann. §27-7-5 (5%) multiplied by the shareholder's pro
rata share of the income attributable to the state reflected on the
corporation's return for the taxable period.

The total tax due on the return must be paid in full no later than
the 15th day of the 3rd month after the end of the tax year (S
Corporation and Partnership).
Payment Options:
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Online Payments: To pay online, go to www.dor.ms.gov,

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Partnership
In the event the individual partners fail to report and pay the
taxes imposed according to Miss. Code Ann. §27-7-25, the
partnership and the general partners shall be jointly and
severally liable for said tax liability and shall be assessed
accordingly. However, the partnership and/or general partners
shall not be liable if the partnership withholds 5% of the net gain
or profit of the partnership for the tax year and remits the same
to the Commissioner.

The penalty imposed for failure to pay the tax when due is
1/2% per month not to exceed 25% in the aggregate.

In a sale of real property and associated tangible personal
property which is not considered an exchange or trade of such
property, and which results in gross proceeds greater than
$100,000.00 paid by the buyer to the seller and owned by a nonresident, the seller, rather than the buyer, shall be responsible
for paying over to the Department of Revenue an amount equal
to 5% of the amount realized by the seller.

A partnership that has income from sources within and without
Mississippi should withhold from Mississippi source income
only. A partnership can file a composite return or an electing
pass-through entity return. See the “Composite Filing” section
of this booklet for additional information on composite returns.
See the “Electing Pass-Through Entity” section of this booklet
for additional information on electing pass-through entities.

•

Incomplete Returns: A company 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 o f $500 per
return.

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
from the Commissioner to do so. Refer to the Producers of Mineral
or Natural Resource Products Section of this booklet for
additional information.

Every taxpayer, filing a composite return or electing passthrough entity return, with an annual income tax liability in
excess of $200 must make estimated tax payments. At least
90% of the current income tax liability of the entity filing a
composite or electing pass-through entity return must be paid
by submitting quarterly payments. The remaining balance is due
by the due date of the return.

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 the 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.

The due dates for estimated tax payments are:
• 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, and;
• 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 the specific
instructions for Form 83-305 in this booklet for more
information.

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.

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.

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 constitutes a complete return.

Partnerships electing to report tax on partnership net income in
this manner should submit Form 84-387. Partners with tax
remitted to the Department of Revenue through partnership
withholding should claim the amount as estimated tax on his or
her individual income tax return. Form 84-387 should be
provided to the partner by the partnership showing the correct
amount withheld.

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ROUND TO THE NEAREST DOLLAR
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.

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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

are not refunded will be applied to the next period for which the
corporation makes a filing.

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.

Treatment of A QSSS and Its Owner: A federal election to be
treated as a Qualified Subchapter S Subsidiary (QSSS) is
considered an election for state purposes and as such the QSSS
will be treated the same for state income and franchise tax
purposes. Thus, the QSSS’s activity is treated as a division of its
parent S corporation for federal income tax purposes and will be
treated in the same manner for state income and franchise tax
purposes.

Franchise Tax (S Corporation): $1.25 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).
Income Tax (Composite and Electing Pass-Through Entity):
0% on the first $5,000 of taxable income, 4% on the next $5,000
of taxable income and 5% on all taxable income in excess of
$10,000.

A parent S corporation that is required to file and report for
federal income tax purposes on the activity conducted in
Mississippi by its QSSS is considered doing business in
Mississippi for both income and franchise tax purposes and shall
include the activity of the QSSS when making income and
franchise tax return filings to this state. The QSSS will not
make separate return filings. Attach a copy of the approved
federal QSSS election when filing the parent S corporation
return.

File an amended return to:
•
•
•
•
•

make adjustments to tax;
claim a refund due to an adjustment to tax;
claim a net operating loss (NOL) carryback deduction;
report federal adjustments (amended federal return), and;
report IRS audit adjustments (RAR).

S corporations that do not have a QSSS election in effect will
make return filings in the same manner as any other S
corporation. An S corporation is subject to the franchise tax and
must compute its Mississippi income. Unless a composite
return election is in effect, each shareholder will make a
separate filing to this state reporting its Mississippi taxable
income and, if a corporation, will make at least the minimum
franchise tax payment.

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.

Treatment of a SMLLC and Its Owner: A Single Member
Limited Liability Company (SMLLC) that is disregarded for
federal reporting purposes will, likewise, be disregarded for
state reporting purposes.

Net Operating Loss (NOL): Form 84-155 must be filed with an
amended return in order to claim a net operating loss deduction.
Form 84-155 is used to make an irrevocable election to
carryback or carryforward the current year NOL. For more
information concerning net operating losses, see the “Net
Operating Loss (NOL)” section of this booklet.

The SMLLC’s activity in this state will be reported by the owner
of the SMLLC when making its return filings. A corporate owner
of an SMLLC will make income and franchise tax return filings
based on its activities and the activities of any disregarded
entities. If the owner of the SMLLC is itself an SMLLC or other
type of disregarded entity, then such amounts will be reported
by the ultimate owners which are not disregarded entities.

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
return should be attached to the amended Mississippi 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

8

The amount of capital apportioned to Mississippi is computed on
line 13 of Form 84-110. The section of Form 84-110 concerning
the assessed value 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.

FRANCHISE TAX (S CORPORATIONS)
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.

Taxable capital is calculated on lines 15 through 18 of Form 84110. The amount of taxable capital shown on line 18 should be
entered on line 1, Form 84-105.
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.

Form 84-110 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).
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 27-7- 37(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 84-110 and a
schedule of computation must be attached to the return for the
exclusion.
Multistate Taxpayers: Lines 9 through 12 of Form 84-110 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.

9

INCOME TAX
Generally, all domestic and foreign pass-through entities having
income from sources within Mississippi must complete Form 84122, 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.

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.

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:
•

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.

•

Failure to comply with the necessary filing requirements.

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).

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 84-122, line 9 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.

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.

•

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.

Total Assignment of Income: If the business activity in
respect to any trade or business of the pass-through entity
occurs within this state, and if by reason of such business
activity the pass-through entity is not taxable in another state,
the total net income (loss) of the pass-through is assigned to
Mississippi.
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 84-125. Multistate contractors use Form
84-124.

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.

10

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
84-150 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 "non-business"
income, losses, expenses, and deductions and rules for
allocating these items, See Miss. Code Ann. §27-7-23.

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:

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.

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

2.

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

Exempt corporate organizations file Form 84-105 and any
necessary supplemental schedules. These organizations are
not subject to the franchise tax levy and should leave lines 1
through 4 blank.

A short taxable year counts as a taxable year. A taxpayer may
elect to forgo the carryback on Form 84-155. Once this election
is made, it cannot be changed.

In computing taxable income, enter on line 1 of Form 84-122
(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.

Form 84-155 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 84-155).

PRODUCERS OF MINERAL OR NATURAL
RESOURCE PRODUCTS
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.

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

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.

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.
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.
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.

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.

11

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 arising at the S corporation, partnership, LLC
or LLP level are passed through to the shareholders,
partners/interest owners based on their percentage of
ownership in the entity earning the credit.

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

As a general rule, the credit passed through to the shareholder,
partner/interest owner can be applied only to the income tax
attributable to the shareholder’s, partner/interest owner's
income derived from the entity earning the credit.

County Ranking
Tier One
(Developed)

In the case of a Mississippi resident who is a partner in a
multistate S corporation or partnership, credits passed through
from the S corporation or partnership may be used to offset only
the amount of income tax attributable to the owner’s share of
pass-through entity income assigned to Mississippi. For any of
these credits to be allowed, schedules must be attached
showing the computations.

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

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).

Form 84-401 must be filed by the S corporation or partnership
to claim the credits earned before they are passed through to
shareholders. If more than three income tax credits are claimed,
attach a supplemental schedule, and enter the total on line 3 of
Form 84-401. Non-composite members of a composite return
and all members of an electing pass-through entity return should
complete Form 80-401 and attach as a part of their Mississippi
Individual Income Tax Return.
The following is a brief description of the major credits allowed
under state statutes:
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.

A jobs 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.

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.

A jobs tax credit is authorized for each full-time employee of
businesses 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.

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.

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
fulltime 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.

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 of

12

tax imposed upon the eligible owner for the taxable year
reduced by the sum of all other credits allowable to the eligible
owner.

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.

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.

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.

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.
Mississippi Business Finance Corporation Revenue Bond
Service Credit (13)

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.

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. §5710-401 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 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 39205-0849.

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 taxable income. These
expenses are net of any reimbursement.

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. The tax credit for each location on which ad
valorem taxes have been paid should not exceed the lesser of
$15,000 or the amount of income taxes attributable to such
location. Previously, the credit may be claimed only in the year in
which the ad valorem taxes are paid; however, Senate Bill 2934
amended Miss. Code Ann. §27-7-22.5 increasing the income tax
credit for ad valorem taxes paid on certain inventory and
authorizes any unused tax credit claimed to be carried forward
for five (5) consecutive years effective July 1, 2012.

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.
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

Effective January 1, 2014, House Bill 787 amends Miss. Code
Ann. §27-7-22.5 to provide an income tax credit for ad valorem

13

1, 2025 the ad valorem tax exemption for equipment used in the
deployment of broadband technologies by telecommunications
enterprises.

taxes paid on rental equipment. Rental equipment is defined as
any rental equipment or other rental items which are held for shortterm rental to the public under rental agreements that are not
subject to privilege taxes. The bill also provides for the amount of
credit to increase each year until the 2016 taxable year in which
the amount of the credit will be limited to the lesser of the amount
of ad valorem taxes paid or the amount of income taxes due for
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.

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.

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.

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) 923- 7700.

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