MISSISSIPPI LEGISLATURE
2005 Regular Session
To: Ways and Means
By: Representative Mayo
AN ACT TO AMEND SECTIONS 27-7-5, 27-7-901, 27-7-903, 27-65-17, 27-71-307, 27-71-337, 27-71-11, 27-71-29, 75-76-177 AND 75-76-129, MISSISSIPPI CODE OF 1972, TO INCREASE THE STATE INCOME TAX; TO INCREASE THE TAX LEVIED ON AMOUNTS THAT ARE PAID TO PATRONS BY GAMING ESTABLISHMENTS; TO INCREASE THE EXCISE TAX ON LIGHT WINE AND BEER; TO INCREASE THE MARKUP ON ALCOHOLIC BEVERAGES; TO INCREASE THE GAMING LICENSE GROSS REVENUE FEE; TO PROVIDE THAT THE REVENUE DERIVED FROM THE TAX INCREASES AUTHORIZED BY THIS ACT, EXCEPT THE INCREASE ON SALES OF TANGIBLE PERSONAL PROPERTY, SHALL BE DEPOSITED INTO THE BUDGET CONTINGENCY FUND; TO PROVIDE THE PURPOSES FOR WHICH SUCH MONIES DEPOSITED INTO THE BUDGET CONTINGENCY FUND SHALL BE EXPENDED; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-7-5, Mississippi Code of 1972, is amended as follows:
27-7-5. (1) (a) Except as otherwise provided in this subsection (1), there is hereby assessed and levied, to be collected and paid as hereinafter provided, for the calendar year 1983 and fiscal years ending during the calendar year 1983 and all taxable years thereafter, upon the entire net income of every resident individual, corporation, association, trust or estate, in excess of the credits provided, a tax at the following rates:
On the first Five Thousand Dollars ($5,000.00) of taxable income, or any part thereof, at the rate of three percent (3%);
On the next Five Thousand Dollars ($5,000.00) of taxable income, or any part thereof, at the rate of four percent (4%); and
On all taxable income in excess of Ten Thousand Dollars ($10,000.00), at the rate of five percent (5%).
(b) For calendar year 2005, and each calendar year thereafter, there is hereby assessed and levied, to be collected and paid as hereinafter provided, upon the entire net income of every resident individual, corporation, association, trust or estate, in excess of the credits provided, a tax at the following rates:
On the first Five Thousand Dollars ($5,000.00) of taxable income, or any part thereof, at the rate of three percent (3%);
On the next Five Thousand Dollars ($5,000.00) of taxable income, or any part thereof, at the rate of four percent (4%);
On the next Ten Thousand Dollars ($10,000.00) of taxable income, or any part thereof, at the rate of five percent (5%); and
On all taxable income in excess of Twenty Thousand Dollars ($20,000.00), at the rate of six percent (6%).
(2) An S corporation, as defined in Section 27-8-3(1)(g), shall not be subject to the income tax imposed under this section.
(3) A like tax is hereby imposed to be assessed, collected and paid annually, except as hereinafter provided, at the rate specified in this section and as hereinafter provided, upon and with respect to the entire net income, from all property owned or sold, and from every business, trade or occupation carried on in this state by individuals, corporations, partnerships, trusts or estates, not residents of the State of Mississippi.
(4) Except as provided in subsection (5) of this section, in the case of taxpayers having a fiscal year beginning in the calendar year 1982 and ending after the first day of January 1983, the tax due for that taxable year shall be determined by:
(a) Computing for the full fiscal year the amount of tax that would be due under the rates in effect for the calendar year 1982; and
(b) Computing for the full fiscal year the amount of tax that would be due under the rates in effect for the calendar year 1983; and
(c) Applying to the tax computed under paragraph (a) the ratio which the number of months falling within the earlier calendar year bears to the total number of months in the fiscal year; and
(d) Applying to the tax computed under paragraph (b) the ratio which the number of months falling within the later calendar year bears to the total number of months within the fiscal year; and
(e) Adding to the tax determined under paragraph (c) the tax determined under paragraph (d) the sum of which shall be the amount of tax due for the fiscal year.
(5) In the case of a resident individual, association, trust or estate having a fiscal year beginning in the calendar year 2004 and ending after the first day of January 2005, the tax due for that taxable year shall be determined by:
(a) Computing for the full fiscal year the amount of tax that would be due under the rates in effect for the calendar year 2004;
(b) Computing for the full fiscal year the amount of tax that would be due under the rates in effect for the calendar year 2005;
(c) Applying to the tax computed under paragraph (a) the ratio which the number of months falling within the earlier calendar year bears to the total number of months in the fiscal year;
(d) Applying to the tax computed under paragraph (b) the ratio which the number of months falling within the later calendar year bears to the total number of months within the fiscal year; and
(e) Adding to the tax determined under paragraph (c) the tax determined under paragraph (d) the sum of which shall be the amount of tax due for the fiscal year.
(6) The revenue derived from the additional tax rate of one percent (1%) imposed under House Bill No. 1688, 2005 Regular Session, shall be deposited into the Budget Contingency Fund created under Section 27-103-301. All of the remainder of the proceeds from the taxes imposed under this section shall be deposited into the State General Fund.
SECTION 2. Section 27-7-901, Mississippi Code of 1972, is amended as follows:
27-7-901. (1) (a) There is hereby levied, assessed and shall be collected a tax of three percent (3%) upon amounts that are paid or credited by gaming establishments licensed under the provisions of the Mississippi Gaming Control Act to their patrons. (b) In addition to the tax levied in paragraph (a) of this subsection, there is hereby levied, assessed and shall be collected an additional tax of two percent (2%) upon amounts that are paid or credited by gaming establishments licensed under the provisions of the Mississippi Gaming Control Act to their patrons. Revenue collected pursuant to the provisions of this paragraph (b) shall be deposited into the Budget Contingency Fund created under Section 27-103-301.
(c) The tax shall be collected by licensed gaming establishments and remitted to the State Tax Commission in the manner provided for by regulations promulgated by the Chairman of the State Tax Commission.
(2) As used in this section, "amounts that are paid or credited" means amounts or credits that are subject to the withholding or reporting requirements of the Internal Revenue Code.
(3) No credit shall be allowed under the Income Tax Law of 1952 for the tax collected by licensed gaming establishments pursuant to this section.
SECTION 3. Section 27-7-903, Mississippi Code of 1972, is amended as follows:
27-7-903. (1) (a) There is hereby levied and assessed upon patrons of gaming establishments located in this state that are not licensed under the provisions of the Mississippi Gaming Control Act, a tax of three percent (3%) of the amounts that are paid or credited to such patrons by the gaming establishment, which tax is the same in kind and rate as has heretofore been imposed pursuant to Section 27-7-901 upon the patrons of gaming establishments which are licensed under the Mississippi Gaming Control Act.
(b) In addition to the tax levied in paragraph (a) of this subsection, there is hereby levied and assessed upon patrons of gaming establishments located in this state that are not licensed under the provisions of the Mississippi Gaming Control Act, an additional tax of two percent (2%) upon amounts that are paid or credited to such patrons by the gaming establishments. Revenue collected pursuant to the provisions of this paragraph (b) shall be deposited into the Budget Contingency Fund created under Section 27-103-301.
(c) The legal incidence and duty to pay such taxes shall fall upon the patron. The assessment of such tax is subject to any exemptions as may exist under federal or state law. The State Tax Commission may enter into tax collection agreements regarding this tax.
(2) As used in this section, "amounts that are paid or credited" means amounts or credits that are subject to the withholding or reporting requirements of the Internal Revenue Code.
(3) No credit shall be allowed under the Income Tax Law of 1952 for the tax collected by gaming establishments pursuant to this section.
SECTION 4. Section 27-65-17, Mississippi Code of 1972, is amended as follows:
27-65-17. (1) Upon every person engaging or continuing within this state in the business of selling any tangible personal property whatsoever there is hereby levied, assessed and shall be collected a tax equal to seven and one-half percent (7-1/2%) of the gross proceeds of the retail sales of the business, except as otherwise provided herein.
Retail sales of farm tractors shall be taxed at the rate of one percent (1%) when made to farmers for agricultural purposes. Retail sales of farm implements sold to farmers and used directly in the production of poultry, ratite, domesticated fish as defined in Section 69-7-501, livestock, livestock products, agricultural crops or ornamental plant crops or used for other agricultural purposes shall be taxed at the rate of three percent (3%) when used on the farm. The three percent (3%) rate shall alsoapply to all equipment used in logging, pulpwood operations or tree farming which is either (a) self-propelled or which is (b) mounted so that it is (i) permanently attached to other equipment which is self-propelled or (ii) permanently attached to other equipment drawn by a vehicle which is self-propelled.
Except as otherwise provided in subsection (3) of this section, retail sales of aircraft, automobiles, trucks, truck-tractors, semitrailers and mobile homes shall be taxed at the rate of three percent (3%).
Sales of manufacturing machinery or manufacturing machine parts when made to a manufacturer or custom processor for plant use only when said machinery and machine parts will be used exclusively and directly within this state in manufacturing a commodity for sale, rental or in processing for a fee shall be taxed at the rate of one and one-half percent (1-1/2%).
Sales of materials for use in track and track structures to a railroad whose rates are fixed by the Interstate Commerce Commission or the Mississippi Public Service Commission shall be taxed at the rate of three percent (3%).
Sales of tangible personal property to electric power associations for use in the ordinary and necessary operation of their generating or distribution systems shall be taxed at the rate of one percent (1%).
Wholesale sales of beer shall be taxed at the rate of seven percent (7%), and the retailer shall file a return and compute the retail tax on retail sales but may take credit for the amount of the tax paid to the wholesaler on said return covering the subsequent sales of same property, provided adequate invoices and records are maintained to substantiate the credit.
Wholesale sales of food and drink for human consumption to full service vending machine operators to be sold through vending machines located apart from and not connected with other taxable businesses shall be taxed at the rate of eight percent (8%).
A manufacturer selling at retail in this state shall be required to make returns of the gross proceeds of such sales and pay the tax imposed in this section.
Any person exercising any privilege taxable under Section 27-65-15 and selling his natural resource products at wholesale or to exempt persons shall pay the tax levied by said section in lieu of the tax levied by this section.
(2) From and after January 1, 1995, retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101, shall be taxed an additional two percent (2%).
(3) In lieu of the tax levied in subsection (1) of this section, there is levied on retail sales of truck-tractors and semitrailers used in interstate commerce and registered under the International Registration Plan (IRP) or any similar reciprocity agreement or compact relating to the proportional registration of commercial vehicles entered into as provided for in Section 27-19-143, a tax at the rate of three percent (3%) of the portion of the sale that is attributable to the usage of such truck-tractor or semitrailer in Mississippi. The portion of the retail sale that is attributable to the usage of such truck-tractor or semitrailer in Mississippi is the retail sales price of the truck-tractor or semitrailer multiplied by the percentage of the total miles traveled by the vehicle that are traveled in Mississippi. The tax levied pursuant to this subsection (3) shall be collected by the State Tax Commission from the purchaser of such truck-tractor or semitrailer at the time of registration of such truck-tractor or semitrailer.
SECTION 5. Section 27-71-307, Mississippi Code of 1972, is amended as follows:
27-71-307. (1) (a) In addition to the specific tax imposed in Section 27-71-303, there is hereby imposed, levied, assessed and shall be collected, as hereinafter provided, an excise or privilege tax upon each person engaged or continuing in the business of wholesaler or distributor of light wines or beer equivalent to Seventy-four and Twenty-four One Hundredths Cents (74-24/100˘) per gallon upon all light wines and beer acquired for sale or distribution in this state. Such excise or privilege tax is also imposed at the same rate upon each gallon of light wine or beer manufactured by brewpubs, each of which shall accurately and reliably measure the quantity of light wine and beer produced by using a measuring device such as a meter or gauge glass or any other suitable method approved by the commissioner. Such tax is hereby imposed as an additional tax for the privilege of engaging or continuing in business.
(b) The excise tax imposed in this section shall be paid to the State Tax Commission monthly on or before the fifteenth day of the month following the month in which the beer or light wine was manufactured or received in this state. Monthly report forms shall be furnished by the commissioner to the wholesalers, distributors and brewpubs.
(c) Provided that persons operating a railroad dining car, club car or other car in interstate commerce upon which light wines or beer may be sold and who are licensed under the provisions of Section 67-3-27 and any other law relating to the sale of such beverages shall keep such records of the sales of such light wines and beer in this state as the commissioner shall prescribe and shall submit monthly reports of such sales to the commissioner within fifteen (15) days after the end of each month on a form prescribed therefor by the commissioner, and shall pay the tax due under the provisions of this section at the time such reports are filed.
No official crowns, lids, labels or stamps with the word "MISSISSIPPI" or "MS" imprinted thereon or any other evidence of tax payment is required by this section, or may be required under rule or regulation promulgated by the commissioner, to be affixed on or to any part of a beer, light wine or malt cooler bottle, can or other light wine or malt cooler container. For purposes of this section, malt cooler products shall be defined as a flavored malt beverage made from a base of malt beverage and flavored with fruit juices, aromatics and essences of other flavoring in quantities and proportions such that the resulting product possesses a character and flavor distinctive from the base malt beverage and distinguishable from other malt beverages.
(2) A licensed wholesaler or distributor of beer or light wine may not import beer or light wine from any source other than a brewer or importer authorized by the commissioner to sell such beer or light wine in Mississippi. Any person who violates the provisions of this subsection, upon conviction thereof, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than six (6) months, or by both such fine and imprisonment, in the discretion of the court and shall be subject to license forfeiture following an appropriate hearing before the State Tax Commission.
(3) The wholesaler or distributor shall be allowed credit for tax paid on beer or light wine which is no longer marketable and which is destroyed by same when such destruction is witnessed by an agent of the commissioner and when the amount of the excise tax exceeds One Hundred Dollars ($100.00). No other loss will be allowed.
A brewpub shall be allowed credit for light wine or beer which has passed through the meter, gauge glass or other approved measuring device and which has been soured or damaged. The brewpub shall record the removal of sour or damaged light wine or beer and may take credit after the destruction is witnessed by an agent of the commissioner and when the amount of excise tax exceeds Twenty-five Dollars ($25.00). No other loss shall be allowed.
(4) All manufacturers, brewers and importers of beer or light wine shall file monthly reports as prescribed by the commissioner listing sales to each wholesaler or distributor by date, invoice number, quantity and container size, and any other information deemed necessary.
(5) All administrative provisions of the Mississippi Sales Tax Law, including those which fix damages, penalties and interest for nonpayment of taxes and for noncompliance with the provisions of such chapter, and all other requirements and duties imposed upon taxpayers, shall apply to all persons liable for taxes under the provisions of this chapter, and the commissioner shall exercise all the power and authority and perform all the duties with respect to taxpayers under this chapter as are provided in the sales tax law except where there is conflict, then the provisions of this chapter shall control.
SECTION 6. Section 27-71-337, Mississippi Code of 1972, is amended as follows:
27-71-337. All taxes levied by this article and required to be paid to the commissioner shall be payable to the commissioner in cash or by personal check, cashier's check, bank exchange, post office money order or express money order and shall be deposited by the commissioner into the State Treasury on the same day collected, provided that no remittances other than cash shall be a final discharge of liability for the tax herein imposed and levied unless and until it has been paid in cash to the commissioner.
The revenue collected from Thirty-one and Fifty-six One Hundredths Cents (31-56/100˘) per gallon upon all light wines and beer shall be deposited into the State Treasury to the credit of the Budget Contingency Fund created under Section 27-103-301. All other revenue collected under this article shall be deposited into the State General Fund.
SECTION 7. Section 27-71-11, Mississippi Code of 1972, is amended as follows:
27-71-11. The commission shall from time to time by resolution request the State Bond Commission to provide sufficient funds required to maintain an adequate alcoholic beverage inventory. Said funds shall be provided under the provisions of Chapter 557, Laws of 1966.
The commission shall add to the cost of all alcoholic beverages a markup of thirty percent (30%), inclusive of the three percent (3%) markup imposed by Section 27-71-7(2).
The commission shall sell alcoholic beverages at uniform prices throughout the state.
SECTION 8. Section 27-71-29, Mississippi Code of 1972, is amended as follows:
27-71-29. All taxes levied by this article shall be paid to the State Tax Commission in cash or by personal check, cashier's check, bank exchange, post office money order or express money order and shall be deposited by the commission in the State Treasury on the same day collected, but no remittances other than cash shall be a final discharge of liability for the tax herein imposed and levied unless and until it has been paid in cash to the State Tax Commission.
All taxes levied under Section 27-71-7(1) and received by the commission under this article shall be paid into the General Fund, and the three percent (3%) levied under Section 27-71-7(2) and received by the commission under this article shall be paid into the special fund in the State Treasury designated as the "Alcoholism Treatment and Rehabilitation Fund" as required by law. Any funds derived from the sale of alcoholic beverages in excess of inventory requirements, less the funds received from the additional two and one-half percent (2-1/2%) markup on the cost of all alcoholic beverages provided for under House Bill No. 1688, 2005 Regular Session, shall be paid not less often than annually into the General Fund. The funds received from the additional two and one-half percent (2-1/2%) markup on the cost of all alcoholic beverages provided for under House Bill No. 1688, 2005 Regular Session, shall be deposited monthly into the State Treasury to the credit of the Budget Contingency Fund created under Section 27-103-301.
SECTION 9. Section 75-76-177, Mississippi Code of 1972, is amended as follows:
75-76-177. (1) From and after August 1, 1990, there is hereby imposed and levied on each gaming licensee a license fee based upon all the gross revenue of the licensee as follows:
(a) Four percent (4%) of all the gross revenue of the licensee which does not exceed Fifty Thousand Dollars ($50,000.00) per calendar month;
(b) Six percent (6%) of all the gross revenue of the licensee which exceeds Fifty Thousand Dollars ($50,000.00) per calendar month and does not exceed One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month; and
(c) Eight percent (8%) of all the gross revenue of the licensee which exceeds One Hundred Thirty-four Thousand Dollars ($134,000.00) per calendar month.
(2) From and after July 1, 2005, there is hereby imposed and levied on each gaming licensee an additional license fee of one percent (1%) of all the gross revenue of the licensee per calendar month. Such license fee shall be in addition to the license fee imposed and levied under subsection (1) of this section.
(3) All revenue received from any game or gaming device which is leased for operation on the premises of the licensee-owner to a person other than the owner thereof or which is located in an area or space on such premises which is leased by the licensee-owner to any such person, must be attributed to the owner for the purposes of this section and be counted as part of the gross revenue of the owner. The lessee is liable to the owner for his proportionate share of such license fees.
(4) If the amount of license fees required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the Chairman of the State Tax Commission shall:
(a) Assess and collect the additional license fees determined to be due, with interest thereon until paid; or
(b) Refund any overpayment, with interest thereon, to the licensee.
Interest must be computed, until paid, at the rate of one percent (1%) per month from the first day of the first month following either the due date of the additional license fees or the date of overpayment.
(5) Failure to pay the fees provided for in this section when they are due for continuation of a license shall be deemed a surrender of the license.
SECTION 10. Section 75-76-129, Mississippi Code of 1972, is amended as follows:
[Through June 30, 2022, this section shall read as follows:]
75-76-129. On or before the last day of each month all taxes, fees, interest, penalties, damages, fines or other monies collected by the State Tax Commission during that month under the provisions of this chapter, with the exception of (a) the local government fees imposed under Section 75-76-195, and (b) an amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c), or an amount equal to twenty-five percent (25%) of the revenue collected pursuant to the fee imposed under Section 75-76-177(1)(c), whichever is the greater amount, and (c) the revenue collected pursuant to the fee imposed under Section 75-76-177(2), shall be paid by the State Tax Commission to the State Treasurer to be deposited in the State General Fund. The local government fees shall be distributed by the State Tax Commission pursuant to Section 75-76-197. Except for the period beginning on July 1, 2004, and through June 30, 2005, an amount equal to Three Million Dollars ($3,000,000.00) of the revenue collected during that month pursuant to the fee imposed under Section 75-76-177(1)(c) shall be deposited by the State Tax Commission into the bond sinking fund created in Section 65-39-3. Except for the period beginning on July 1, 2004, and through June 30, 2005, the revenue collected during that month pursuant to the fee imposed under Section 75-76-177(1)(c) that is in excess of Three Million Dollars ($3,000,000.00), but is less than twenty-five percent (25%) of the amount of revenue collected during that month, shall be deposited into the State Highway Fund to be used exclusively for the reconstruction and maintenance of highways of the State of Mississippi. The revenue collected each month pursuant to the fee imposed under Section 75-76-177(2) shall be deposited into the Budget Contingency Fund created under Section 27-103-31.
For the period beginning on July 1, 2004, and through June 30, 2005, twenty-five percent (25%) of the amount of revenue collected during each month pursuant to the fee imposed under Section 75-76-177(1)(c) shall be deposited into the Budget Contingency Fund created in Section 27-103-301.
[From and after July 1, 2022, this section shall read as follows:]
75-76-129. On or before the last day of each month, all taxes, fees, interest, penalties, damages, fines or other monies collected by the State Tax Commission during that month under the provisions of this chapter, with the exception of (a) the local government fees imposed under Section 75-76-195, and (b) the revenue collected pursuant to the fee imposed under Section 75-76-177(2), shall be paid by the State Tax Commission to the State Treasurer to be deposited in the State General Fund. The local government fees shall be distributed by the State Tax Commission pursuant to Section 75-76-197. The revenue collected each month pursuant to the fee imposed under Section 75-76-177(2) shall be deposited into the Budget Contingency Fund created under Section 27-103-301.
SECTION 11. Monies deposited into Budget Contingency Fund under Sections 27-7-5, 27-7-901, 27-7-903, 27-71-337, 27-71-29 and 75-76-129, as amended by House Bill No. 1688, 2005 Regular Session, shall be expended, upon appropriation by the Legislature for the following purposes in the specified percentages:
(a) Public education purposes in kindergarten through
Grade 12..................................... 58%
(b) Institutions of Higher Learning.............. 17%
(c) Mental health purposes....................... 11%
(d) Community and Junior Colleges................. 8%
(e) Public education purposes limited
to kindergarten............................... 3%
(f) Reimbursement for tax losses incurred
by reason of the exemption of homes
from certain ad valorem taxes................. 2%
(g) Department of Rehabilitation Services......... 1%
SECTION 12. This act shall take effect and be in force from and after July 1, 2005, except for Section 1, which shall take effect and be in force from and after January 1, 2005.