House Bill 1091

AN ACT TO PROVIDE AN INCOME TAX CREDIT FOR A PORTION OF THE PREMIUMS PAID BY A SMALL EMPLOYER FOR HEALTH INSURANCE FOR ITS EMPLOYEES AND ANY DEPENDENTS OF SUCH EMPLOYEES; TO LIMIT THE MAXIMUM AMOUNT OF THE CREDIT; TO PROVIDE THAT ANY UNUSED TAX CREDIT MAY BE CARRIED FORWARD; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) Subject to the provisions of this section, a taxpayer that is a small employer shall be allowed a credit against the income taxes imposed under this chapter for the amounts paid by the taxpayer as premiums for health insurance covering the taxpayer's employees and any dependents of such employees. The credit provided for in this section shall not exceed the lesser of fifty percent (50%) of the aggregate amount paid by the taxpayer for such insurance premiums during the taxable year or the amount of tax imposed upon the taxpayer for the taxable year reduced by the sum of all other credits allowable to such taxpayer under this chapter, except credit for tax payments made by or on behalf of the taxpayer. Any unused portion of the credit may be carried forward for the succeeding five (5) tax years. Any amount of health insurance premiums paid by a taxpayer that is applied toward the credit authorized in this section may not be used as a deduction by the taxpayer for state income tax purposes.

(2) Tax credits authorized by this section that are earned by a partnership, limited liability company, S corporation or other similar pass-through entity, may be allocated to the partners, members or shareholders of such entity on a pro rata basis or in accordance with the provisions of any agreement of the partners, members or shareholders.

(3) For the purposes of this section, the term "small employer" means any person, firm, corporation, partnership, association or other entity actively engaged in business which, on at least fifty percent (50%) of its working days during the year for which a credit is claimed under this section, employed no more than twenty (20) employees. In determining the number of employees, companies that are affiliated companies or that are eligible to file a combined tax return for purposes of state taxation shall be considered one (1) employer.

SECTION 2. Section 1 of this act shall be codified as a new section in Chapter 7, Title 27, Mississippi Code of 1972.

SECTION 3. Nothing in this act shall affect or defeat any claim, assessment, appeal, suit, right or cause of action for taxes due or accrued under the income tax laws before the date on which this act becomes effective, whether such claims, assessments, appeals, suits or actions have been begun before the date on which this act becomes effective or are begun thereafter; and the provisions of the income tax laws are expressly continued in full force, effect and operation for the purpose of the assessment, collection and enrollment of liens for any taxes due or accrued and the execution of any warrant under such laws before the date on which this act becomes effective, and for the imposition of any penalties, forfeitures or claims for failure to comply with such laws.

SECTION 4. This act shall take effect and be in force from and after January 1, 2010.