House Bill 555

AN ACT TO ESTABLISH THE "MISSISSIPPI FOREST AND AGRICULTURAL LANDOWNERS' FAIRNESS ACT"; TO DEFINE TERMINOLOGY AND PRESCRIBE THE PURPOSE FOR WHICH THE LEGISLATION IS INTENDED IN AN EFFORT TO PREVENT MISSISSIPPI TAXPAYERS FROM SUBSIDIZING THE TAXES OF NONRESIDENT ALIENS AND FEDERALLY TAX-EXEMPT ENTITIES OWNING OR HAVING POSSESSORY INTERESTS IN FOREST AND AGRICULTURAL LAND LOCATED IN THE STATE; TO PROHIBIT ANY STATE TAX EXEMPTIONS ON THE ASSESSED VALUE OF FOREST AND AGRICULTURAL LAND TO NONRESIDENT ALIENS AND FEDERALLY TAX-EXEMPT ENTITIES THAT OWN OR HAVE A POSSESSORY INTEREST IN SUCH LANDS LOCATED IN THE STATE; TO REQUIRE SUCH ENTITIES TO PAY THE SAME RATE OF INCOME AND FRANCHISE TAXES AS OTHER BUSINESS CORPORATIONS IN THE STATE UNTIL JANUARY 1, 2028, WHEN THOSE TAXES UPON SUCH BUSINESS CORPORATIONS REPEAL BY OPERATION OF LAW; TO REQUIRE ALL NONRESIDENT ALIENS AND ALL FEDERALLY TAX-EXEMPT ENTITIES OWNING ANY POSSESSORY INTEREST IN FORESTRY AND AGRICULTURAL LAND TO FILE A FULL DISCLOSURE OF ALL OWNERSHIP INFORMATION OF EACH TRACT OF LAND IT OWNS WITH A DESCRIPTION OF EACH TRACT AS IS DESCRIBED IN ITS DEED OR DEEDS TO THE OFFICE OF THE SECRETARY OF STATE WITHIN SIX MONTHS OF PASSAGE OF THIS ACT; TO REQUIRE FUTURE TRANSFERS BY THESE PARTIES TO BE FILED WITH THE SECRETARY OF STATE WITHIN 90 DAYS OF THE TRANSFER; TO REQUIRE THE SECRETARY OF STATE TO MAKE THE OWNERSHIP DISCLOSURE INFORMATION AVAILABLE ON ITS WEBSITE; TO REQUIRE THE DEPARTMENT OF REVENUE TO FILE A TAX LIEN WITH THE CIRCUIT CLERK OF EACH COUNTY IN WHICH LAND IS LOCATED FOR TAXES MORE THAN 180-DAYS DELINQUENT; TO PROVIDE THAT THE DELINQUENCY ON A SINGLE PROPERTY SHALL RESULT IN A TAX LIEN ON ALL LAND OWNED BY THE DELINQUENT TAXPAYER IN THAT COUNTY; AND FOR RELATED PURPOSES.

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

SECTION 1. This act shall be known as the "Mississippi Forest and Agricultural Landowners' Fairness Act".

SECTION 2. The purpose of this act is to end the unintended consequence of requiring all Mississippi taxpayers to subsidize the taxes of nonresident aliens and federally tax-exempt entities who owns or has a possessory interest in forest and agricultural land in Mississippi.

SECTION 3. As used in this act, the following words shall have the meanings herein ascribed, unless the context clearly requires otherwise:

(a) "Forest and agricultural land" means any land in the state devoted to the growing of trees or the commercial production of agricultural products or timber, wood or forest products, including nongaming species. Where the land is classified by the county as forest, agricultural, pasture or open land and being used as forest or agricultural land in the performance of forestry or agricultural activities there shall be a prima facie case as to the purpose to which the land is devoted, though such classification shall not be required.

(b) "Nonresident alien" means:

(i) An individual who is domiciled in a country other than the United States and is neither a citizen of the United States nor a resident of the United States within the meaning of 26 USCS Section 7701(b)(1)(A);

(ii) The government of a foreign country; or

(iii) A corporation, partnership, limited partnership, limited liability company, trustee, foundation,

retirement or pension fund, or any other entity that is domiciled in a country other than the United States, or that is domiciled within the United States, but is wholly or partly owned by any

corporation, partnership, limited liability company, trustee, retirement or pension fund or any other entity domiciled in a country other than the United States.

An exception to these categories is any corporation or limited partnership that is listed on a United States stock

exchange.

(c) "Federally tax-exempt entity" means any corporation, partnership, limited partnership, limited liability company, trustee, foundation, retirement or pension fund or any other entity that is exempt from taxes to the United States for charitable, religious, retirement or any other reason, but is not primarily for the benefit of Mississippi residents.

SECTION 4. Nonresident aliens and federally tax-exempt entities owning or having a possessory interest in forestry and agricultural land shall not be exempt from any taxes payable to the Mississippi Department of Revenue based upon the annual assessed value of the land as determined by the local tax assessor of the county wherein the forestry or agricultural land is located. Any such entity shall pay income taxes at the same rate as a business corporation. Additionally, any such entity shall pay franchise taxes at the same rate as other business corporations until such time that the Mississippi franchise tax is repealed by operation of law upon the conclusion of the 2027 tax, effective on January 1, 2028, as provided by Section 5, Chapter 499, Laws of 2016.

SECTION 5. (1) All nonresident aliens and all federally tax-exempt entities owning any possessory interest in forestry and agricultural land shall, within six (6) months of passage of this act, file with the Office of the Secretary of State information detailing full disclosure of all ownership information of each tract of land it owns, together with a description of each tract as is described in its deed or deeds. The disclosure shall include names and addresses of all parties and percentages of ownership. All future transfers of any such interest shall likewise be filed with the Secretary of State within ninety (90) days of the transfer whether by deed or by a conveyance of an

interest in land without executing a deed, such as in the case of internally transferring any interest in a corporation, partnership, limited partnership, limited liability company, foundation, retirement or pension fund, or other entity. The Secretary of State shall make this information available on its website for the public and the Department of Revenue to have easy access.

(2) Failure of the required party to file the necessary information in a timely manner will result in fines imposed on any

delinquent landowner and shall be based on guidelines determined by the Department of Revenue.

(3) The Department of Revenue shall file a tax lien with the Circuit Clerk of each county in which land is located for which taxes are delinquent for more than one hundred eighty (180) days. This filing shall result in a tax lien on all land owned by the delinquent taxpayer in that county and be subject to the same

rules of collection and enforcement as are in effect for delinquent sales taxes and other taxes.

SECTION 6. The State of Mississippi currently assesses all forest and agricultural land by reducing the market value, cash value, actual cash value, and proper value of the land by using a formula set forth in Section 27-35-50(4)(b), which shall remain in full force and effect, except that it shall no longer be used to determine the true value of any forest and agricultural land which is owned or possessed in whole or in part by a nonresident alien or federally tax-exempt entity as defined by this act. All land in which a nonresident alien or a federally tax-exempt entity has an ownership or possessory interest shall be taxed by arriving at its true value as determined by an appraisal based solely on its fair market value, cash value, actual value and its proper value. This fair market value appraisal method shall be based on the value of the raw land without infrastructure or improvement, and shall not include any additional value of the timber or any other crop growing or situated on the land.

SECTION 7. This act shall take effect and be in force from and after July 1, 2026.