2005 Regular Session
To: Ways and Means
By: Representative Watson
AN ACT TO AUTHORIZE THE STATE TAX COMMISSION TO CLOSE THE BUSINESS OF ANY TAXPAYER WHO HAS FAILED TO FILE THREE SALES OR USE TAX RETURNS AND PAYMENTS DURING ANY CONSECUTIVE TWENTY-FOUR-MONTH PERIOD; TO PROVIDE FOR NOTICE OF THE CLOSURE; TO PROVIDE THE METHODS BY WHICH THE TAXPAYER MAY AVOID THE CLOSURE OF THE BUSINESS; TO PROVIDE FOR APPEALS OF THE CLOSURE TO A HEARING OFFICER APPOINTED BY THE CHAIRMAN OF THE STATE TAX COMMISSION; TO PROVIDE THE PROCEDURES TO BE UTILIZED BY THE HEARING OFFICER IN CONDUCTING A HEARING; TO PROVIDE FOR JUDICIAL REVIEW OF THE DECISIONS OF THE HEARING OFFICER; TO PROVIDE THE PROCEDURE FOR THE CLOSURE OF A BUSINESS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. As used in this act:
(a) "Commissioner" means the Chairman of the State Tax Commission.
(b) "Noncompliant taxpayer" means any taxpayer who has failed to file two (2) sales or use tax returns and payments during any consecutive twenty-four-month period.
SECTION 2. (1) In addition to all other remedies provided by law for the collection of unpaid sales and use taxes, the commissioner shall have the authority to close the business of a noncompliant taxpayer subject to the appeal procedures authorized by this act, if the noncompliant taxpayer, for three (3) times within any consecutive twenty-four-month period, fails to file a sales or use tax return and payment.
(2) The commissioner shall give notice to the noncompliant taxpayer that the third failure to file a sales or use tax return and payment within any consecutive twenty-four-month period shall result in the closure of his business. The notice shall be in writing and shall be delivered to the noncompliant taxpayer by regular mail or by hand delivery.
(3) If the noncompliant taxpayer has a third delinquency in filing a sales or use tax return or payment within any consecutive twenty-four-month period after the issuance of the notice provided for in subsection (1) of this section, the commissioner shall notify the noncompliant taxpayer by certified mail or by hand delivery, that the business of the noncompliant taxpayer will be closed within five (5) business days from the date of the notice unless the noncompliant taxpayer makes arrangements with the commissioner to pay the taxes due or appeals as provided for in this act. If the fifth day falls on a Saturday, Sunday or a legal holiday the business may be closed on the next succeeding business day.
(4) A noncompliant taxpayer may avoid closure of the business by:
(a) Filing all delinquent returns and paying all taxes due, including any interest and penalties; or
(b) Entering into a payment agreement approved by the commissioner to satisfy the delinquency.
SECTION 3. (1) A noncompliant taxpayer may request an administrative hearing concerning the decision of the commissioner to close the business of the noncompliant taxpayer by following the procedures in this section.
(2) Within five (5) business days after the delivery or attempted delivery of the notice required by Section 2(3) of this act, the taxpayer may file a written protest, signed by the taxpayer or his authorized agent stating the reasons for opposing the closure of the business and requesting an administrative hearing.
(3) (a) A noncompliant taxpayer may request that an administrative hearing be held in person, by telephone, upon written documents furnished by the taxpayer or upon written documents and any evidence produced by the taxpayer at an administrative hearing.
(b) The commissioner shall have the discretion to determine whether an administrative hearing where testimony is to be presented will be conducted in person or by telephone.
(c) A noncompliant taxpayer who requests an administrative hearing based entirely upon written documents is not entitled to any other administrative hearing prior to the hearing officer rendering an opinion.
(4) The administrative hearing shall be conducted by a hearing officer who shall be a qualified employee of the State Tax Commissioner appointed by the commissioner.
(5) (a) The hearing officer shall set the time and place for a hearing and shall give the noncompliant taxpayer notice of the hearing.
(b) At the administrative hearing, the noncompliant taxpayer may be represented by an authorized representative and may present evidence in support of his position.
(6) The administrative hearing shall be held at a location selected by the hearing officer and the hearing shall be held within fourteen (14) calendar days of receipt by the commissioner of the request for an administrative hearing.
(7) The defenses to the closure of a business under this act are as follows:
(a) Written proof that the noncompliant taxpayer filed all delinquent returns and tax payments including interest and penalties; or
(b) The noncompliant taxpayer has entered into a written payment agreement, approved by the commissioner, to satisfy the delinquency.
(8) The decision of the hearing officer shall be in writing and copies shall be delivered to the taxpayer and the commissioner by mail or by hand delivery.
SECTION 4. (1) If the decision of the hearing officer is to affirm the closure of the business, the noncompliant taxpayer may seek judicial review of the decision by filing suit within twenty (20) days after the date of the decision.
(2) Appeal from a decision by a hearing officer shall be the Circuit Court of the First Judicial District of Hinds County or to the circuit court of the county in which the noncompliant taxpayer resides or has his principal place of business. The trial at the circuit court shall be de novo.
(3) (a) If the circuit court finds that the business closure determination by the hearing officer was appropriate, the court shall issue an injunction against the noncompliant taxpayer prohibiting the further operation of the business.
(b) If a business subject to an injunction issued by a circuit court under this subsection continues in operation, any person responsible for the decision to operate the business after the issuance of the injunction shall, in addition to any other penalty, be guilty of a misdemeanor.
(4) An appeal from the decision of the circuit court may be made as otherwise provided by law.
(5) The procedures provided for in this section shall be the only methods for seeking relief from a written decision by a hearing officer to close the business of a noncompliant taxpayer.
(6) The decision to close the business of a noncompliant taxpayer shall be final:
(a) If the noncompliant taxpayer fails to request an administrative hearing;
(b) If the noncompliant taxpayer fails to seek judicial relief from the decision of the hearing officer; or
(c) upon a final decision of a circuit court or an appellate court.
(7) It is unlawful for a business to continue in operation after a business closure order is issued that is:
(a) Upheld on appeal; or
(b) Not appealed by the delinquent taxpayer.
SECTION 5. (1) If a noncompliant taxpayer fails to timely seek administrative or judicial review of a business closure decision, or if the business closure decision is affirmed after administrative or judicial review, the commissioner shall cause a written notice to be affixed to all entrances of the business that:
(a) Identifies the business as being subject to a business closure order; and
(b) States that the business is prohibited from further operation.
(2) In addition, the commissioner may cause the business to be locked or otherwise secure the business so that it may not be operated. If the business is located in the noncompliant taxpayer's home, the business shall not be locked or otherwise secured, but the notice provided for under subsection (1) of this section may be posted.
(3) The commissioner may request the assistance of any state or local law enforcement official to post the notice or to secure the business as authorized in this section.
SECTION 6. The State Tax Commission shall promulgate rules and regulations necessary to implement the provisions of this act.
SECTION 7. This act shall take effect and be in force from and after July 1, 2005.