MISSISSIPPI LEGISLATURE
2024 Regular Session
To: Ways and Means
By: Representative Lamar
AN ACT TO PROVIDE THAT THE DEPARTMENT OF FINANCE AND ADMINISTRATION SHALL ESTABLISH A PROGRAM TO PROVIDE AN INCOME TAX CREDIT FOR TAXPAYERS WHO DEVELOP PROPERTY USED OR FORMERLY USED FOR COMMERCIAL PURPOSES IN THE CAPITOL COMPLEX IMPROVEMENT DISTRICT FOR THE PURPOSE OF CONVERTING THE PROPERTY TO RESIDENTIAL USE; TO PROVIDE AN APPLICATION PROCESS FOR TAXPAYERS WHO DESIRE TO PARTICIPATE IN THE TAX CREDIT PROGRAM; TO AUTHORIZE A REFUNDABLE INCOME TAX CREDIT FOR TAXPAYERS WHO INCUR COSTS FOR THE DEVELOPMENT OF PROPERTY AS PROVIDED IN THIS ACT; TO PROVIDE FOR THE AMOUNT OF THE TAX CREDIT; TO PROVIDE THAT IF THE AMOUNT OF THE TAX CREDIT CLAIMED BY A TAXPAYER EXCEEDS THE AMOUNT OF INCOME TAX LIABILITY OF THE TAXPAYER FOR A TAXABLE YEAR, THE TAXPAYER SHALL BE ELIGIBLE TO RECEIVE A REFUND FROM THE DEPARTMENT OF REVENUE FOR THE AMOUNT OF SUCH EXCESS; TO PROVIDE THAT IN LIEU OF RECEIVING SUCH A REFUND, A TAXPAYER MAY SELL OR TRANSFER THE EXCESS PORTION OF THE TAX CREDIT TO ANY TAXPAYER HAVING A LIABILITY FOR INCOME TAXES; 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 herein unless the context clearly requires otherwise:
(a) "Development" means construction, repair, renovation, operation and/or maintenance of eligible property such as buildings and other facilities, and/or procuring the construction, repair, renovation, operation and/or maintenance of eligible property such as buildings and other facilities.
(b) "District" means the Capitol Complex Improvement District created in Section 29-5-203, Mississippi Code of 1972.
(c) "Eligible property" means property used or formerly used for commercial purposes as of the date of an application submitted under subsection (2) of this section and located within the district.
(b) A person or other entity desiring to participate in the tax credit program established under this section must submit an application to the Department of Finance and Administration. The application must contain a development plan that provides:
(i) A description of:
1. The property to be developed,
2. The purpose or purposes for which the property is or was formerly being used at the time the application is submitted, and
3. The type of work the applicant will perform as part of development of the property and the purpose or purposes for which the property will be placed into use after development; and
(ii) Any other information requested by the Department of Finance and Administration.
(c) The Department of Finance and Administration shall review such application and determine whether the applicant is eligible to participate in the tax credit program. If the Department of Finance and Administration approves the applicant for participation in the program, it shall issue a certificate of participation to the applicant designating the applicant as eligible to participate in the program.
(3) A taxpayer who incurs costs for the development of eligible property for the purpose of converting the property to residential use shall be allowed a credit against the taxes imposed under this chapter. The credit shall be for an amount equal to twenty-five percent (25%) of the incurred costs for development of the eligible property. If the amount of the credit claimed by a taxpayer exceeds 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, then the taxpayer shall be eligible to receive a refund from the department for the amount of such excess. In addition, in lieu of receiving a refund for the amount of such excess tax credit, a taxpayer may sell or transfer the excess portion of the tax credit to any taxpayer having a liability for taxes under this chapter. A tax credit may not be sold or transferred more than one (1) time, subject to guidelines established by the department. The buyer or transferee of a tax credit may use the acquired credit in the same manner and to the same extent as the seller or transferor of the credit; however, the sale or transfer of a credit will not extend the length of time that the credit may be carried forward. In order to sell or transfer a tax credit, the seller or transferor shall notify the department in writing within thirty (30) days after the date of the sale or transfer. The notice shall include:
1. The seller's or transferor's tax credit balance before the sale or transfer of the credit;
2. The tax credit identification number assigned by the department;
3. The unused portion of the tax credit remaining after the sale or transfer;
4. All federal and state tax identification numbers for both the seller or transferor and the buyer or transferee;
5. The date of the sale or transfer;
6. The amount of the tax credit sold or transferred; and
7. Any other information required by the department.
Failure by the seller or transferor to comply with the notice requirements of this subsection (3) shall void the sale or transfer.
(4) A taxpayer shall apply for credits under this section with the department on forms prescribed by the department. In the application the taxpayer shall provide a copy of the certificate of participation issued by the Department of Finance and Administration and certify to the department the dollar amount of the costs for development incurred or to be incurred during the calendar year and that the eligible property for which the costs were incurred or will be incurred has been developed or is being developed for the purpose of converting the property to residential use. Within thirty (30) days after the receipt of an application, the department shall allocate credits based on the dollar amount of costs for development 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 awarded 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 development 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 for development 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 for development, if the actual dollar amount of the incurred costs for development is lower than the amount estimated, the department shall adjust the tax credit allowed under this section.
(5) The aggregate amount of tax credits that may be allocated by the department under this section during a calendar year shall not exceed Five Million Dollars ($5,000,000.00).
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. 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, 2024.