Senate Bill 2399

(As Passed the Senate)

AN ACT TO REQUIRE EMPLOYERS TO WITHHOLD 5% OF THE AMOUNT PAID TO AN INDIVIDUAL IF THE COMPENSATION IS REPORTED ON FORM 1099 AND THE INDIVIDUAL HAS FAILED TO PROVIDE A TAXPAYER IDENTIFICATION NUMBER OR PROVIDED AN INTERNAL REVENUE SERVICE ISSUED TAXPAYER IDENTIFICATION NUMBER ISSUED FOR NONRESIDENT ALIENS; TO PROVIDE THAT EMPLOYERS WHO FAIL TO COMPLY WITH THIS PROVISION SHALL BE LIABLE FOR THE AMOUNT REQUIRED TO BE WITHHELD; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) An employer shall be required to withhold five percent (5%) of the amount of compensation paid to an individual to be credited against the tax liability of the individual if the compensation is reported on Internal Revenue Service Form 1099 and with respect to which the individual has:

(a) Failed to provide a taxpayer identification number;

(b) Provided an Internal Revenue Service issued taxpayer identification number issued for nonresident aliens.

(2) Any employer who fails to comply with the requirements of this section shall be liable for the amount required to be withheld unless the employer is exempt from federal withholding with respect to such individual pursuant to a properly filed Internal Revenue Service Form 8233 and has provided a copy of this form to the commissioner.

SECTION 2. Section 1 of this act shall be codified in Article 3, Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3. This act shall take effect and be in force from and after January 1, 2008.