MISSISSIPPI LEGISLATURE
2007 Regular Session
To: Finance
By: Senator(s) Hewes, Gollott, Robertson, Moffatt, Cuevas, Dawkins
AN ACT TO AMEND SECTION 41-49-3, MISSISSIPPI CODE OF 1972, TO REVISE THE DEFINITION OF "HOTEL" IN ORDER TO REFLECT CHANGES IN THE HOTEL INDUSTRY WITHIN THE STATE OF MISSISSIPPI, AND TO DEFINE "BONA FIDE WRITTEN LEASE"; TO AMEND SECTION 27-65-23, MISSISSIPPI CODE OF 1972, IN ORDER TO ENSURE THAT ANY "HOTEL" ESTABLISHMENT COMPLIES WITH THE STATE'S SALES TAX REQUIREMENTS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 41-49-3, Mississippi Code of 1972, is amended as follows:
41-49-3. (1) The term "hotel" shall mean and include any entity or individual engaged in the business of furnishing or providing one or more rooms intended or designed for dwelling, lodging or sleeping purposes that at any one time will accommodate transient guests on a daily or weekly basis and that are known to the trade as such and includes every building or other structure kept, used, maintained or advertised as, or held out to the public to be, a place where sleeping accommodations are supplied for pay or other consideration to transient or permanent guests or tenants that have not entered into a bona fide written lease for a term of more than ninety (90) consecutive days, whether such establishment be known as a hotel, apartment hotel, condominium, cooperative housing, time-share, bed-and-breakfast, rooming house, recreational vehicle park, cabin, inn, tavern, club, resort, tourist home, tourist court, motel, court, motor court, motor lodge or by any other like term regardless of the number of rooms, lots, units, suites, spaces or cabins available, excluding nursing homes or institutions for the aged or infirm as defined in Section 43-11-1, * * * or any facility or unit defined as a "condominium" by Section 89-9-5 which is leased for a period of more than ninety (90) consecutive days as evidenced by a bona fide written lease as defined by subsection (2).
(2) As used in this section, "bona fide written lease" means a written document that clearly demonstrates it is intended for the transient guest to have exclusive use of the leased unit in the hotel. Factors to be considered in evaluating the parties' intent include, but are not limited to:
(a) The length of the lease, including the beginning and ending date;
(b) A statement giving the lessee complete and exclusive use of the property for the entire duration of the lease;
(c) Execution in good faith, without deceit or fraud;
(d) A sufficient description of the leased property;
(e) A statement that the lease contains the complete and sole agreement;
(f) A provision that the lessee will pay an agreed amount of rent;
(g) A statement containing the due date, frequency and address for payment of the rent;
(h) A statement specifying what conditions will result in early termination of the lease, the rights and obligations of the parties at termination and any penalties that will result from early termination; and
(i) Signatures of the named parties, lessee and lessor.
SECTION 2. Section 27-65-23, Mississippi Code of 1972, is amended as follows:
27-65-23. Upon every person engaging or continuing in any of the following businesses or activities there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the gross income of the business, except as otherwise provided:
Air conditioning installation or repairs;
Automobile, motorcycle, boat or any other vehicle repairing or servicing;
Billiards, pool or domino parlors;
Bowling or tenpin alleys;
Burglar and fire alarm systems or services;
Car washing--automatic, self-service, or manual;
Computer software sales and services;
Cotton compresses or cotton warehouses;
Custom creosoting or treating, custom planing, custom sawing;
Custom meat processing;
Electricians, electrical work, wiring, all repairs or installation of electrical equipment;
Elevator or escalator installing, repairing or servicing;
Film developing or photo finishing;
Foundries, machine or general repairing;
Furniture repairing or upholstering;
Grading, excavating, ditching, dredging or landscaping;
Hotels, motels, tourist courts or camps, trailer parks, or any entity or individual engaged in the business of furnishing or providing one or more rooms intended or designed for dwelling, lodging or sleeping purposes as defined in Section 41-49-3;
Insulating services or repairs;
Jewelry or watch repairing;
Laundering, cleaning, pressing or dyeing;
Marina services;
Mattress renovating;
Office and business machine repairing;
Parking garages and lots;
Plumbing or pipe fitting;
Public storage warehouses (There shall be no tax levied on gross income of a public storage warehouse derived from the temporary storage of tangible personal property in this state pending shipping or mailing of the property to another state);
Refrigerating equipment repairs;
Radio or television installing, repairing, or servicing;
Renting or leasing personal property used within this state;
Services performed in connection with geophysical surveying, exploring, developing, drilling, producing, distributing, or testing of oil, gas, water and other mineral resources;
Shoe repairing;
Storage lockers;
Telephone answering or paging services;
Termite or pest control services;
Tin and sheet metal shops;
TV cable systems, subscription TV services, and other similar activities;
Vulcanizing, repairing or recapping of tires or tubes;
Welding; and
Woodworking or wood turning shops.
Income from services taxed herein performed for electric power associations in the ordinary and necessary operation of their generating or distribution systems shall be taxed at the rate of one percent (1%).
Income from services taxed herein performed on materials for use in track or 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%).
Income from renting or leasing tangible personal property used within this state shall be taxed at the same rates as sales of the same property.
Persons doing business in this state who rent transportation equipment with a situs within or without the state to common, contract or private commercial carriers are taxed on that part of the income derived from use within this state. If specific accounting is impracticable, a formula may be used with approval of the commissioner.
A lessor may deduct from the tax computed on the rental income from tangible personal property a credit for sales or use tax paid to this state at the time of purchase of the specific personal property being leased or rented until such credit has been exhausted.
Charges for custom processing and repairing services may be excluded from gross taxable income when the property on which the service was performed is delivered to the customer in another state either by common carrier or in the seller's equipment.
When a taxpayer performs unitary services covered by this section, which are performed both in intrastate and interstate commerce, the commissioner is hereby invested with authority to formulate in each particular case and to fix for such taxpayer in each instance formulae of apportionment which will apportion to this state, for taxation, that portion of the services which are performed within the State of Mississippi.
SECTION 3. This act shall take effect and be in force from and after its passage.