House Bill 1307

AN ACT TO AMEND SECTION 27-65-9, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF "DOING BUSINESS" FOR PURPOSES OF REMITTING SALES TAX ON GOODS AND SERVICES DELIVERED TO LOCATIONS WITHIN THE STATE OF MISSISSIPPI; TO PROHIBIT A STATE AGENCY FROM CONTRACTING FOR GOODS AND SERVICES WITH A COMPANY THAT FAILS TO REMIT SALES TAX OR FILE A SALES TAX RETURN; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-65-9, Mississippi Code of 1972, is amended as follows:

27-65-9. (1) "Business" means:

(a) All activities or acts engaged in (personal or corporate), for benefit or advantage, either direct or indirect, and not exempting subactivities in connection therewith. Each of such subactivities shall be considered business engaged in, taxable in the class in which it falls.

(b) Activities engaged in by exempt organizations or political entities in competition with privately owned business subject to the provisions of this chapter.

(c) Activities of a person in this state performing a service under contract or agreement with another person when the service performed is taxable under the provisions of this chapter.

(2) "Doing business" means:

(a) Activities of any person owning personal property located in this state under lease or rental agreement or of any person installing personal property within this state.

(b) Activities of any person represented in this state by salesmen taking or soliciting orders to be filled from points outside this state for subsequent delivery of the merchandise in equipment owned or leased by the seller to customers located in this state.

(c) Activities of a company, including its subsidiaries and related companies, performing a service or providing goods to a state agency.

(3) "State agency" means the State of Mississippi, its departments, institutions, counties, municipalities, school districts or any other local political subdivision.

SECTION 2. No state agency shall contract for goods and services with a company if it, including its subsidiaries and related companies, is subject to collecting and remitting sales tax on sales or services delivered by any means to locations within the state. Any company that contracts with a state agency for goods and services, and that fails to remit the proper tax or file the proper tax return under Sections 27-65-17, 27-65-19, 27-65-21, 27-65-23 and 27-76-4, shall be considered to be in breach of the relevant contract with the state agency. For purposes of this section, "state agency" shall have the meaning ascribed to it in Section 27-65-9.

SECTION 3. This act shall take effect and be in force from and after July 1, 2005.