House Bill 401

AN ACT TO CREATE THE SMALL TOWN TEACHER TAX CREDIT ACT; TO AUTHORIZE A REFUNDABLE INCOME TAX CREDIT FOR LICENSED TEACHERS WHO ARE EMPLOYED BY A SCHOOL DISTRICT IN GEOGRAPHIC LOCATION DEFINED AS A "SMALL TOWN"; TO PROVIDE THE AMOUNT OF THE TAX CREDIT FOR LICENSED TEACHERS WITH AT LEAST THREE YEARS OF CONSECUTIVE SERVICE WITH THE SCHOOL DISTRICT; TO PROVIDE THAT IF THE AMOUNT OF TAX CREDIT CLAIMED BY A TAXPAYER EXCEEDS THE AMOUNT OF INCOME TAX IMPOSED UPON THE TAXPAYER FOR THE TAXABLE YEAR, THEN THE TAXPAYER SHALL RECEIVE A REFUND FROM THE DEPARTMENT OF REVENUE FOR THE AMOUNT OF SUCH EXCESS; AND FOR RELATED PURPOSES.

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

SECTION 1. This act shall be known and may be cited as the "Small Town Teacher Tax Credit Act."

SECTION 2. (1) As used in this section, the following terms shall have the meanings ascribed in this section, unless the context of the terms' use clearly requires otherwise:

(a) "Small town" means any city, town or village with a population of five thousand (5,000) or fewer persons according to the most recent federal decennial census.

(b) "Teacher" means any individual licensed by the State Department of Education in accordance with the provisions of Section 37-3-2 and employed in a small town by a public school district in an instructional capacity in accordance with Chapter 9 Title 37, Mississippi Code of 1972.

(2) Subject to the provisions of this section, a taxpayer shall be allowed a refundable credit against the income taxes imposed under this chapter for the taxable year in which the taxpayer served as a licensed teacher employed by a public school district in a small town. The amount of the credit allowed for teachers who have three (3) to five (5) years of service as a licensed teacher in a small town shall be Two Thousand Five Hundred Dollars ($2,500.00). The amount of the credit allowed for teachers who have more than five (5) years of service as a licensed teacher in a small town shall be Five Thousand Dollars ($5,000.00). If the amount of credit claimed by a taxpayer exceeds 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 this chapter, except credit for tax payments made by or on behalf of the taxpayer, then the taxpayer shall receive a refund from the Department of Revenue for the amount of such excess.

(3) In order to receive the tax credit authorized in this section, a taxpayer must provide documentation on a form prepared by the Department of Revenue and verified by the appropriate school district superintendent that the taxpayer is actively serving as a licensed teacher and has continuously served in such capacity for at least three (3) consecutive years. The State Superintendent of Public Education shall promulgate rules and regulations to assist local school district superintendents in defining and prescribing those persons who may qualify for the tax credit authorized under this section as active licensed teachers.

SECTION 3. Sections 1 and 2 of this act shall be codified as a new section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 4. This act shall take effect and be in force from and after January 1, 2019.