1998 Regular Session
To: Ways and Means
By: Representative Stribling
House Bill 1319
AN ACT TO AMEND SECTION 27-65-111, MISSISSIPPI CODE OF 1972, TO EXEMPT FROM SALES TAXATION SALES OF TANGIBLE PERSONAL PROPERTY AND SERVICES TO NONPROFIT ORGANIZATIONS EXEMPT FROM INCOME TAXATION UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE PROVIDED SUCH ORGANIZATIONS SATISFY CERTAIN REQUIREMENTS; TO BRING FORWARD FOR PURPOSES OF AMENDMENT, SECTIONS 79-11-105, 79-11-109, 79-11-121, 79-11-503, 79-11-504 AND 79-11-509, MISSISSIPPI CODE OF 1972, WHICH ARE PORTIONS OF THE MISSISSIPPI NONPROFIT CORPORATION ACT; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-65-111, Mississippi Code of 1972, is amended as follows:
27-65-111. The exemptions from the provisions of this chapter which are not industrial, agricultural or governmental, or which do not relate to utilities or taxes, or which are not properly classified as one of the exemption classifications of this chapter, shall be confined to persons or property exempted by this section or by the Constitution of the United States or the State of Mississippi. No exemptions as now provided by any other section, except the classified exemption sections of this chapter set forth herein, shall be valid as against the tax herein levied. Any subsequent exemption from the tax levied hereunder, except as indicated above, shall be provided by amendments to this section.
No exemption provided in this section shall apply to taxes levied by Section 27-65-15 or 27-65-21, Mississippi Code of 1972.
The tax levied by this chapter shall not apply to the following:
(a) Sales of tangible personal property and services to hospitals or infirmaries owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual, and which are subject to and governed by Sections 41-7-123 through 41-7-127.
Only sales of tangible personal property or services which are ordinary and necessary to the operation of such hospitals and infirmaries are exempted from tax.
(b) Sales of daily or weekly newspapers, and periodicals or publications of scientific, literary or educational organizations exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code of 1954, as it exists as of March 31, 1975, and subscription sales of all magazines.
(c) Sales of coffins, caskets and other materials used in the preparation of human bodies for burial.
(d) Sales of tangible personal property for immediate export to a foreign country.
(e) Sales of tangible personal property to an orphanage, old men's or ladies' home, supported wholly or in part by a religious denomination, fraternal nonprofit organization or other nonprofit organization.
(f) Sales of tangible personal property, labor or services taxable under Sections 27-65-17, 27-65-19, and 27-65-23, to a YMCA, YWCA, a Boys' or Girls' Club owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual.
(g) Sales to elementary and secondary grade schools, junior and senior colleges owned and operated by a corporation or association in which no part of the net earnings inures to the benefit of any private shareholder, group or individual, and which are exempt from state income taxation, provided that this exemption does not apply to sales of property or services which are not to be used in the ordinary operation of the school, or which are to be resold to the students or the public.
(h) The gross proceeds of retail sales and the use or consumption in this state of drugs and medicines:
(i) Prescribed for the treatment of a human being by a person authorized to prescribe the medicines, and dispensed or prescription filled by a registered pharmacist in accordance with law; or
(ii) Furnished by a licensed physician, surgeon, dentist or podiatrist to his own patient for treatment of the patient; or
(iii) Furnished by a hospital for treatment of any person pursuant to the order of a licensed physician, surgeon, dentist or podiatrist; or
(iv) Sold to a licensed physician, surgeon, podiatrist, dentist or hospital for the treatment of a human being; or
(v) Sold to this state or any political subdivision or municipal corporation thereof, for use in the treatment of a human being or furnished for the treatment of a human being by a medical facility or clinic maintained by this state or any political subdivision or municipal corporation thereof.
"Medicines," as used in this paragraph, shall mean and include any substance or preparation intended for use by external or internal application to the human body in the diagnosis, cure, mitigation, treatment or prevention of disease and which is commonly recognized as a substance or preparation intended for such use; provided that "medicines" do not include any auditory, prosthetic, ophthalmic or ocular device or appliance, any dentures or parts thereof or any artificial limbs or their replacement parts, articles which are in the nature of splints, bandages, pads, compresses, supports, dressings, instruments, apparatus, contrivances, appliances, devices or other mechanical, electronic, optical or physical equipment or article or the component parts and accessories thereof, or any alcoholic beverage or any other drug or medicine not commonly referred to as a prescription drug.
Notwithstanding the preceding sentence of this subsection, "medicines" as used in this subsection, shall mean and include sutures, whether or not permanently implanted, bone screws, bone pins, pacemakers and other articles permanently implanted in the human body to assist the functioning of any natural organ, artery, vein or limb and which remain or dissolve in the body.
"Hospital," as used in this paragraph, shall have the meaning ascribed to it in Section 41-9-3, Mississippi Code of 1972.
Insulin furnished by a registered pharmacist to a person for treatment of diabetes as directed by a physician shall be deemed to be dispensed on prescription within the meaning of this subsection.
(i) Retail sales of automobiles, trucks and truck-tractors if exported from this state within forty-eight (48) hours and registered and first used in another state.
(j) Sales of tangible personal property or services to the Salvation Army and the Muscular Dystrophy Association, Inc.
(k) From July 1, 1985, through December 31, 1992, retail sales of "alcohol blended fuel" as such term is defined in Section 75-55-5. The gasoline-alcohol blend or the straight alcohol eligible for this exemption shall not contain alcohol distilled outside the State of Mississippi.
(l) Sales of tangible personal property or services to the Institute for Technology Development.
(m) The gross proceeds of retail sales of food and drink for human consumption made through vending machines serviced by full line vendors from and not connected with other taxable businesses.
(n) The gross proceeds of sales of motor fuel.
(o) Retail sales of food for human consumption purchased with food stamps issued by the United States Department of Agriculture, or other federal agency, from and after October 1, 1987, or from and after the expiration of any waiver granted pursuant to federal law, the effect of which waiver is to permit the collection by the state of tax on such retail sales of food for human consumption purchased with food stamps.
(p) Sales of cookies for human consumption by the Girl Scouts of America no part of the net earnings from which sales inures to the benefit of any private group or individual.
(q) Gifts or sales of tangible personal property or services to public or private nonprofit museums of art.
(r) Sales of tangible personal property or services to alumni associations of state-supported colleges or universities.
(s) Sales of tangible personal property or services to chapters of the National Association of Junior Auxiliaries, Inc.
(t) Sales of tangible personal property or services to domestic violence shelters which qualify for state funding under Sections 93-21-101 through 93-21-113.
(u) Sales of tangible personal property or services to the National Multiple Sclerosis Society, Mississippi Chapter.
(v) Retail sales of food for human consumption purchased with food instruments issued the Mississippi Band of Choctaw Indians under the Women, Infants and Children Program (WIC) funded by the United States Department of Agriculture.
(w) Sales of tangible personal property or services to a private company, as defined in Section 57-61-5, which is making such purchases with proceeds of bonds issued under Section 57-61-1 et seq., the Mississippi Business Investment Act.
(x) The gross collections from the operation of self-service, coin-operated car washing equipment and sales of the service of washing motor vehicles with portable high pressure washing equipment on the premises of the customer.
(y) Sales of tangible personal property and services to any organization exempt from income taxation under Section 501(c)(3) of the Internal Code, provided that such organization meets the following requirements:
(i) The organization has provided the Mississippi Secretary of State with documentation that such organization is exempt from income taxation under Section 501(c)(3) of the Internal Revenue Code;
(ii) The organization has received a letter from the Secretary of State designating such organization as a Section 501(c)(3) organization in Mississippi; and
(iii) The organization has applied for sales tax exempt status with the State Tax Commission and has received a card or other form of documentation verifying that it is exempt from paying the state sales tax.
Any organization exempt under this item (y) shall be required to renew its tax exempt status on an annual basis.
SECTION 2. Section 79-11-105, Mississippi Code of 1972, is brought forward as follows:
79-11-105. (1) A document must satisfy the requirements of this section, and of any other section that adds to or varies these requirements, to be entitled to filing by the Secretary of State.
(2) Section 79-11-101 et seq. must require or permit filing the document in the office of the Secretary of State.
(3) The document must contain the information required by Section 79-11-101 et seq. It may contain other information as well.
(4) The document must be typewritten or printed or, if electronically transmitted, it must be in a format that can be retrieved or reproduced by the Secretary of State in typewritten or printed form.
(5) The document must be in the English language. However, a corporate name need not be in English if written in English letters or Arabic or Roman numerals, and the certificate of existence required of a foreign corporation need not be in English if accompanied by a reasonably authenticated English translation.
(6) The document must be signed:
(a) By the presiding officer of its board of directors, its president or by another of its officers;
(b) If directors have not been selected or the corporation has not been formed, by an incorporator; or
(c) If the corporation is in the hands of a receiver, trustee or other court-appointed fiduciary, by that fiduciary.
(7) The person executing a document shall sign it and state beneath or opposite the signature his or her name and the capacity in which he or she signs. The document may, but need not, contain:
(a) A corporate seal;
(b) An attestation;
(c) An acknowledgement or verification. A document required or permitted to be filed under this chapter which contains a copy of a signature, however made, is acceptable for filing.
(8) If the Secretary of State has prescribed a mandatory form for a document under Section 79-11-107, the document must be in or on the prescribed form.
(9) The document must be delivered to the office of the Secretary of State for filing. Delivery may be made by electronic transmission if, to the extent, and in the manner permitted by the Secretary of State. If the document is filed in typewritten or printed form and not transmitted electronically, the Secretary of State may require one (1) exact or conformed copy to be delivered with the document except as otherwise provided in Sections 79-11-167 and 79-11-379.
(10) When the document is delivered to the office of the Secretary of State for filing, the correct filing fee and any franchise tax, license fee or penalty required by Section 79-11-101 et seq. or other law must be paid or provision for payment made in a manner permitted by the Secretary of State.
SECTION 3. Section 79-11-109, Mississippi Code of 1972, is brought forward as follows:
79-11-109. (1) Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect the following fees when the documents described in this subsection are delivered for filing:
(a) Articles of incorporation ............. $ 50.00
(b) Application for use of
indistinguishable name ................ 25.00
(c) Application for reserved name ......... 25.00
(d) Notice of transfer of reserved name ... 25.00
(e) Application for registered name ....... 50.00
(f) Application for renewal of registered
name .................................. 50.00
(g) Corporation's statement of change of
registered agent or registered office
or both ............................... 10.00
(h) Agent's statement of change of registered
office for each affected corporation .. 10.00
not to exceed a total of ......... 1,000.00
(i) Agent's statement of resignation ...... No Fee
(j) Amendment of articles of
incorporation ......................... 50.00
(k) Restatement of articles of incorporation
with amendments ....................... 50.00
(l) Articles of merger .................... 50.00
(m) Articles of dissolution ............... 25.00
(n) Articles of revocation of dissolution . 25.00
(o) Certificate of administrative
dissolution ........................... No Fee
(p) Application for reinstatement following
administrative dissolution ............ 50.00
(q) Certificate of reinstatement .......... No Fee
(r) Certificate of judicial dissolution ... No Fee
(s) Application for certificate of
authority ............................. 100.00
(t) Application for amended certificate of
authority ............................. 50.00
(u) Application for certificate of
withdrawal ............................ 25.00
(v) Certificate of revocation of authority
to transact business .................. No Fee
(w) Status report ......................... 25.00
(x) Articles of correction ................ 50.00
(y) Application for certificate of existence
or authorization ...................... 25.00
(z) Any other document required or permitted
to be filed by Sections 79-11-101
et seq. ............................... 25.00
(2) Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect a fee of Twenty-five Dollars ($25.00) upon being served with process under Sections 79-11-101 et seq. The party to a proceeding causing service of process is entitled to recover the fee paid the Secretary of State as costs if the party prevails in the proceeding.
(3) Except as otherwise provided in subsection (4) of this section, the Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign corporation:
(a) One Dollar ($1.00) a page for copying; and
(b) Ten Dollars ($10.00) for the certificate.
(4) The Secretary of State may collect a filing fee greater than the fee set forth in subsections (1), (2) and (3) in an amount not to exceed twice the fee set forth in subsections (1), (2) and (3) of processing the filing, if the form prescribed by the Secretary of State for such filing has not been used.
SECTION 4. Section 79-11-121, Mississippi Code of 1972, is brought forward as follows:
79-11-121. (1) Any person may apply to the Secretary of State to furnish a certificate of existence for a domestic or foreign corporation.
(2) The certificate of existence sets forth:
(a) The domestic corporation's corporate name or the foreign corporation's corporate name used in this state;
(b) That (i) the domestic corporation is duly incorporated under the law of this state, the date of its incorporation and the period of its duration if less than perpetual; or (ii) that the foreign corporation is authorized to transact business in this state;
(c) That all fees, taxes, and penalties owed to this state have been paid, if (i) payment is reflected in the records of the Secretary of State and (ii) nonpayment affects the good standing of the domestic or foreign corporation;
(d) That its most recent status report required by Section 146 of this act has been delivered to the Secretary of State;
(e) That articles of dissolution have not been filed; and
(f) Other facts of record in the Office of the Secretary of State that may be requested by the application.
(3) Subject to any qualification stated in the certificate, a certificate of existence issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign corporation is in good standing in this state.
SECTION 5. Section 79-11-503, Mississippi Code of 1972, is brought forward as follows:
79-11-503. (1) Except as otherwise provided in Section 79-11-505 and prior to any solicitation of contributions, every charitable organization as defined in Section 79-11-501 which solicits or intends to solicit contributions by any means whatsoever shall file a registration statement with, and pay a filing fee of Fifty Dollars ($50.00) to, the Secretary of State. A registration statement that contains false, misleading, deceptive or incomplete information or documentation shall not be considered sufficient. The registration statement shall be on forms prescribed by the Secretary of State and shall contain the following information and such other information that the Secretary of State may require by rule:
(a) The name of the organization and the name or names under which it intends to solicit contributions;
(b) The names and addresses of the officers, directors, trustees and chief executive officer of the organization;
(c) The addresses of the organization and any offices in this state. If the organization does not maintain a principal office, the name and address of the person having custody of its financial records;
(d) Where and when the organization was legally established, the form of its organization and its tax exempt status;
(e) The purpose for which the organization and the purpose or purposes for which the contributions to be solicited will be used;
(f) The date on which the fiscal year of the organization ends;
(g) Whether the organization is authorized by any other governmental authority to solicit contributions and a statement of (i) whether the charitable organization or any of its present officers, directors, executive personnel or trustees have ever had a license or registration denied, suspended, revoked or enjoined by any court or other governmental authority in this state or any other state, or (ii) whether the charitable organization has voluntarily entered into an assurance or voluntary discontinuance or agreement with any jurisdiction or federal agency or officer;
(h) The names and addresses of any professional fund-raisers or fund-raising counsel who are acting or have agreed to act on behalf of the organization;
(i) Methods by which solicitation will be made;
(j) Copies of contracts between charitable organizations and professional fund-raisers or fund-raising counsel relating to financial compensation or profit to be derived by the professional fund-raisers or fund-raising counsel. If any such contract is executed after filing of a registration statement, a copy thereof shall be filed within ten (10) days of the date of execution;
(k) The board, group or individual having final authority over the distribution, custody and use of contributions received;
(l) A financial report as required by Section 79-11-507;
(m) With the initial registration only, a copy of the current charter, articles of incorporation, agreement of association, instrument of trust, constitution, or other organizational instrument and a copy of the bylaws of the charitable organization; and
(n) With the initial registration or, if after registration, within thirty (30) days after its receipt, a copy of any federal tax exemption determination letter, any correspondence rescinding the charitable organization's tax exempt status, or any notification from the Internal Revenue Service of any challenge to or investigation of the charitable organization's continued entitlement to federal tax exemption.
(2) The registration statement shall be signed and sworn to under penalties of perjury by the president or other authorized officer and the chief fiscal officer of the organization.
(3) The Secretary of State shall issue a certificate of registration to a charitable organization once the Secretary of State determines that such organization has complied with all provisions of this chapter. No charitable organization required to be registered under this section shall solicit funds without a valid certificate of registration.
(4) Such registration shall remain in effect for one (1) year, unless renewed by the filing of forms as prescribed by the Secretary of State and upon payment of the Fifty Dollars ($50.00) renewal fee.
(5) Every registered organization shall notify the Secretary of State within thirty (30) days of any change in the information required to be furnished by such organization under Sections 79-11-501 through 79-11-529.
(6) In no event shall a registered charitable organization continue to solicit contributions in or from this state after the date such organization should have filed, but failed to file, a renewal and the financial report in accordance with the requirements of Sections 79-11-501 through 79-11-529.
(7) If any local, county or area division of a charitable organization is supervised and controlled by a superior or parent organization, incorporated, qualified to do business, or doing business within this state, such local, county or area division shall not be required to register under this section if the superior or parent organization files a registration statement on behalf of the local, county or area division in addition to or as part of its own registration statement. If a registration statement has been filed by a superior or parent organization as provided in Section 79-11-503(1), it shall file the annual report required under Section 79-11-507 on behalf of the local, county or area division in addition to or as part of its own report, but the accounting information required under Section 79-11-507 shall be set forth separately and not in consolidated form with respect to every local, county or area division which raises or expends more than Four Thousand Dollars ($4,000.00).
SECTION 6. Section 79-11-504, Mississippi Code of 1972, is brought forward as follows:
79-11-504. The Secretary of State shall have the authority to:
(a) Promulgate rules of procedure and regulations necessary for the administration of Sections 79-11-501 through 79-11-529, Mississippi Code of 1972, subject to the provisions of the Mississippi Administrative Procedures Law.
(b) Honor written requests from interested person for interpretative opinions regarding registration and exemptions from registration.
(c) Publish and disseminate information to the public concerning persons subject to Sections 79-11-501 through 79-11-529, Mississippi Code of 1972.
(d) Perform any other functions and duties which may be necessary to carry out the provisions of Sections 79-11-501 through 79-11-529, Mississippi Code of 1972.
SECTION 7. Section 79-11-509, Mississippi Code of 1972, is amended as follows:
79-11-509. (1) The Secretary of State shall deny, suspend or revoke a registration or an exemption for the following reasons:
(a) The application for registration or renewal is incomplete.
(b) The application or renewal fee (where applicable) has not been paid.
(c) A document filed with the Secretary of State contains one or more false or misleading statements or omits material facts.
(d) The charitable contributions have not been or are not being applied for the purpose or purposes stated in the documents filed with the Secretary of State.
(e) The applicant or registrant has violated or failed to comply with any provisions of this chapter or any rule or order thereunder.
(f) The applicant, registrant, officers, directors, or partners of the applicant or registrant, or their agents or employees, have been convicted of any felony or of a misdemeanor where such misdemeanor involved misrepresentation, misapplication or misuse of the money or property of another.
(g) The applicant or registrant has engaged in the use or employment of dishonesty, fraud, deception, misrepresentation, false promise or false pretense.
(h) The applicant or registrant has had the authority to engage in charitable or fund-raising activities denied, revoked or suspended by the Secretary of State or any other state or jurisdiction.
(i) The applicant or registrant has been convicted of any criminal offense committed in connection with the performance of activities regulated under Sections 79-11-501 through 79-11-529 or any criminal offense involving untruthfulness or dishonesty or any criminal offense relating adversely to the registrant's or applicant's fitness to perform activities regulated by Sections 79-11-501 through 79-11-529. For the purposes of this paragraph, a plea of guilty, non vult, nolo contendere or any other similar disposition of alleged criminal activity shall be deemed a conviction.
(j) The applicant or registrant has engaged in other forms of misconduct as may be determined by the rules adopted by the Secretary of State.
(2) The Secretary of State shall notify the applicant or licensee of his intent to deny, suspend or revoke a license. The notification shall contain the reasons for the action and shall inform him of his right to request an administrative hearing within thirty (30) days of receipt of the notification. The denial, suspension or revocation shall become effective thirty (30) days after receipt of the notification unless a request for an administrative hearing is received by the Secretary of State before the expiration of the thirty (30) days. If a hearing is requested and the denial, suspension or revocation is upheld, the denial, suspension or revocation shall become effective upon the service of the final administrative decision on the applicant or licensee.
(3) Registration shall become effective no later than noon of the thirtieth day after a completed application is filed, if no denial order is in effect and no proceeding is pending under this chapter. The Secretary of State may, by rule or order, specify an earlier effective date, and the Secretary of State may, by order, defer the effective date until noon of the thirtieth day after the filing of any amendment.
(4) Whenever it appears to the Secretary of State that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule or order hereunder, he may, in his discretion, seek the following remedies in addition to other remedies authorized by law:
(a) Issue a cease and desist order, with or without a prior hearing against the person or persons engaged in the prohibited activities, directing them to cease and desist from further illegal activity; or
(b) Issue an order in the case of a registered charity, professional fund-raiser or solicitor, or other person who violated this chapter, imposing an administrative penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, each violation to be considered as a separate offense in a single proceeding or a series of related proceedings;
(c) For the purpose of determining the amount or extent of a sanction, if any, to be imposed under subparagraph (b) of this section, the Secretary of State shall consider, among other factors, the frequency, persistence and willfulness of the conduct constituting a violation of this chapter or a rule promulgated thereunder or an order of the Secretary of State, the number of persons adversely affected by the conduct, and the resources of the person committing the violation.
(5) Whenever it appears to the Attorney General that any person has engaged in or is about to engage in any act or practice constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder, he may, in his discretion, bring an action in chancery court to enjoin the acts or practices to enforce compliance with Sections 79-11-501 through 79-11-529 or any rule or order thereunder. Upon a proper showing a permanent or temporary injunction, restraining order or writ of mandamus shall be granted and a receiver or conservator may be appointed for the defendant or the defendant's assets. In addition, upon a proper showing by the Attorney General, the court may enter an order of rescission, restitution or disgorgement directed to any person who has engaged in any act constituting a violation of any provision of Sections 79-11-501 through 79-11-529 or any rule or order thereunder or the court may impose a civil penalty up to a maximum of Twenty-five Thousand Dollars ($25,000.00) for each offense, and each violation shall be considered as a separate offense in a single proceeding or a series of related proceedings. The court may not require the Attorney General to post a bond.
SECTION 8. This act shall take effect and be in force from and after July 1, 1998.