House Bill 1756

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR CERTAIN TAXPAYERS WHO INCUR COSTS FOR THE REMOVAL OF TREES FROM LAND AS A RESULT OF DAMAGE TO THE TREES CAUSED BY THE 2023 DROUGHT; TO PROVIDE THE AMOUNT OF THE TAX CREDIT; 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 shall have the meanings ascribed herein unless the context clearly requires otherwise:

(a) "Eligible land" means manageable forestland that is owned by an eligible landowner and located in Mississippi.

(b) "Eligible landowner" means a taxpayer who owns at least ten (10) acres of eligible land in Mississippi.

(c) "Manageable forestland" means land that would be considered to be eligible for participation in the Farm Resource Development Program, regardless of whether the owner of the land participates in the program.

(2) (a) Subject to the provisions of this section, a taxpayer who is an eligible landowner and incurs costs for the removal of trees from eligible land as a result of damage to the trees caused by the 2023 drought shall be allowed a credit against the taxes imposed under this chapter. The credit shall be for an amount equal to the lesser of (i) the total costs incurred by the taxpayer for removal of trees from eligible land or (ii) Three Thousand Dollars ($3,000.00). However, the tax credit shall not exceed the amount of 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. Any tax credit claimed under this section but not used in any taxable year may be carried forward for five (5) consecutive years from the close of the tax year in which the credit was earned. The maximum aggregate amount of tax credits that may be allocated under this section in a calendar year shall not exceed Five Million Dollars ($5,000,000.00).

(b) A taxpayer shall apply for credits under this section with the department on forms prescribed by the department. In such application the taxpayer shall certify to the department the dollar amount of the costs incurred or to be incurred during the calendar year. The taxpayer also must submit documentation from a licensed forester verifying that the damage to the trees for which the landowner incurred or will incur removal costs is the result of the 2023 drought. Within thirty (30) days after the receipt of an application, the department shall allocate credits based on the dollar amount of costs as certified in the application. However, if the department cannot allocate the full amount of credits certified in the application due to the limit on the aggregate amount of credits that may be allocated under this section in a calendar year, the department shall so notify the applicant within thirty (30) days with the amount of credits, if any, that may be allocated to the applicant in the calendar year. Once the department has allocated credits to a taxpayer, if the costs for which a credit is allocated have not been incurred as of the date of the allocation, then the costs must be incurred not later than sixty (60) days from the date of the allocation. If the costs are not incurred within such time period, the allocation shall be cancelled and returned to the department for reallocation. Upon final documentation of the costs, if the actual dollar amount of the costs is lower than the amount estimated, the department shall adjust the tax credit allowed under this section.

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

SECTION 3. This act shall take effect and be in force from and after January 1, 2024.