House Bill 520

AN ACT TO ESTABLISH THE WHOLESALE TO RETAIL ACCOUNTABILITY PROGRAM ("WRAP"); TO STANDARDIZE THE REPORTING OF WHOLESALE SALES FOR RESALE PURPOSES MADE WITHIN THIS STATE ON WHICH SALES OR USE TAX WAS NOT COLLECTED; TO PROVIDE FOR ELECTRONIC FILING OF REQUIRED INFORMATION REPORTS; TO PROVIDE PENALTIES FOR NONCOMPLIANCE; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) (a) The Commissioner of Revenue (Commissioner) is authorized to require persons selling tobacco products, as defined in Section 27-69-3, to retailers of such products to file an information report of such sales with the Department of Revenue. Nothing shall prevent a seller from including in its report sales of tangible personal property that are not otherwise required by this section.

(b) The commissioner is authorized to require persons selling food, candy or nonalcoholic beverages, including bottled soft drinks, to retailers of such products to file an information report of such net sales with the department. For purposes of this paragraph (b):

(i) "Candy" means a preparation of sugar, honey or other natural or artificial sweetener in combination with chocolate, fruits, nuts or other ingredients or flavorings in the form of bars, drops or pieces. Candy shall not include any preparation containing flour and shall require no refrigeration;

(ii) "Food" and "nonalcoholic beverages" mean substances, whether in liquid, concentrated, solid, frozen, dried or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value. "Food" and "nonalcoholic beverages" do not include alcoholic beverages, tobacco, candy, dietary supplements or prepared food;

(iii) "Net sales" means the aggregate amount for which the reported products were sold during the reporting period, less any discounts, on-invoice adjustments, credit for returned merchandise, or other similar reductions in the amount charged to the retailer for the products covered by the report.

(2) (a) The information report shall contain such information as deemed reasonably necessary by the commissioner to ascertain the correctness of any tax return or to determine the liability of any person taxable and may include, without limitation, the following information:

(i) The seller's name and license number;

(ii) The retailer's name and sales tax account number;

(iii) The retailer's situs code and address, including street address, county, municipality, state and zip code;

(iv) The general type of product sold; provided, that all candy, food and nonalcoholic beverages, including bottled soft drinks, may be treated as a single type of product;

(v) The dates each type of product was sold; provided, that for all candy, food and nonalcoholic beverage sales, including sales of bottled soft drinks, the date can reflect the last day of the period covered by the report;

(vi) The quantity of each type of product sold; and

(vii) The monthly sales total, in dollars, of each type of product sold.

(b) The information report shall be filed electronically in a format specified by the commissioner. However, electronic submission shall not be required of any wholesaler that does not keep records electronically in the ordinary course of business.

(c) Notwithstanding any requirement in paragraph (a) or (b) of this subsection (2), no seller shall be required to change its record-keeping system for purposes of this section. If the seller's records do not include all of the information requested by the commissioner, or include the information in a different format than requested by the commissioner, the requirements of this section shall be satisfied if the seller includes in the report all of the requested information that the seller does have, in the format in which the seller ordinarily maintains such information.

(d) The information report shall be filed for each calendar month and shall be due no later than the twentieth day of the month immediately following the end of such period. Any seller who fails to provide the information report by the due date or who negligently or knowingly includes inaccurate information on the information report is subject to a penalty, not to exceed One Thousand Dollars ($1,000.00), for each inaccurate report, or, for every month the report, or part thereof, is not provided, up to a maximum amount of Ten Thousand Dollars ($10,000.00). The commissioner is authorized to waive the penalty, in whole or in part, for good and reasonable cause.

(e) The commissioner shall not issue any assessment under Section 27-65-37, including a notice of proposed assessment, to any retailer based solely on the information report submitted pursuant to this section, unless the department first issues to the retailer an inquiry letter setting forth the information that led the department to its conclusion and providing an opportunity for the retailer to explain the inconsistencies between its purchases and reported sales. Nothing in this section prohibits a jeopardy assessment under Section 27-65-61.

(f) Any wholesaler making sales of candy, food or nonalcoholic beverages, including bottled soft drinks, in an amount less than Five Hundred Thousand Dollars ($500,000.00) during the prior calendar year shall not be required to include such sales of candy, food or nonalcoholic beverages, including bottled soft drinks, in the information report required under this section.

(g) Any report provided to the department pursuant to this section shall be tax information of the wholesaler and shall be confidential pursuant to Section 27-65-81. However, the department is authorized to disclose, to an individual customer of the wholesaler, records of the customer's purchases contained within the report.

SECTION 2. This act shall take effect and be in force from and after July 1, 2022.