MISSISSIPPI LEGISLATURE

2010 Regular Session

To: Ways and Means

By: Representatives Watson, Jones (111th)

House Bill 863

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR TAXPAYERS WHO ARE FIRST-TIME HOMEBUYERS OF A PRINCIPAL RESIDENCE IN THIS STATE; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; TO PROVIDE FOR THE RECAPTURE OF THE TAX CREDIT UNDER CERTAIN CIRCUMSTANCES; AND FOR RELATED PURPOSES. 

     BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

     SECTION 1.  (1)  As used in this section, the following words and phrases shall have the meanings ascribed in this section unless the context clearly indicates otherwise: 

          (a)  "First-time homebuyer" means any individual who had no present ownership interest in a principal residence during the three-year period ending on the date of the purchase of the principal residence to which this section applies.

          (b)  "Modified adjusted income" means adjusted gross income for federal income tax purposes for a taxable year increased by any amount excluded from gross income under 26 USCS Section 911, 931 or 933. 

          (c)  "Principal residence" has the same meaning as when used in 26 USCS Section 121. 

     (2)  (a)  Subject to the provisions of this section, a taxpayer who is a first-time homebuyer of a principal residence in this state shall be allowed a credit against the taxes imposed under this chapter in an amount equal to ten percent (10%) of the purchase price of the residence.  However, the amount of the credit authorized under this section shall not exceed the lesser of One Thousand Dollars ($1,000.00) or the amount of income tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to the taxpayer under the state income tax laws, except credit for tax payments made by or on behalf of the taxpayer.  Any unused portion of the credit claimed under this section may be carried forward to the next succeeding taxable year.

          (b)  The amount of the credit authorized under this section for a taxable year shall be reduced, but not below zero, by an amount that bears the same ratio to the amount of credit authorized as the excess, if any, of the taxpayer's modified adjusted gross income for the taxable year over Seventy-five Thousand Dollars ($75,000.00)(One Hundred Fifty Thousand Dollars ($150,000.00) in the case of a joint return) bears to Twenty Thousand Dollars ($20,000.00). 

          (c)  No credit shall be allowed to a taxpayer for any taxable year with respect to the purchase of a principal residence if the taxpayer disposes of the residence before the end of such taxable year.  In addition, the State Tax Commission may recapture all of any credit allowed under this section if a taxpayer disposes of a principal residence, for which a credit was claimed, within thirty-six (36) months after the date the taxpayer purchased the residence. 

          (d)  In the case of married individuals who file a joint return, the credit authorized by this section is allowable only if both individuals are first-time homebuyers.

          (e)  If two (2) or more individuals who are not married purchase a principal residence:

              (i)  The credit authorized under this section is allowable only if each of the individuals is a first-time homebuyer; and

              (ii)  The amount of the credit shall be allocated among the individuals in a manner prescribed by the commissioner.

     SECTION 2.  Section 1 of this act shall be codified as a separate section in Chapter 7, Title 27, Mississippi Code of 1972.

     SECTION 3.  Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

     SECTION 4.  This act shall take effect and be in force from and after January 1, 2010.