House Bill 1635

AN ACT TO AMEND SECTION 27-65-17, MISSISSIPPI CODE OF 1972, TO REDUCE THE RATE OF SALES TAX IMPOSED ON RETAIL SALES OF BOATS; TO IMPOSE A TAX ON CASUAL SALES OF BOATS THAT ARE REQUIRED TO BE REGISTERED WITH THE MISSISSIPPI DEPARTMENT OF WILDLIFE, FISHERIES AND PARKS; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-65-17, Mississippi Code of 1972, is amended as follows:

27-65-17. (1) (a) Except as otherwise provided in this section, 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 percent (7%) of the gross proceeds of the retail sales of the business.

(b) Retail sales of farm tractors and parts and labor used to maintain and/or repair such tractors shall be taxed at the rate of one and one-half percent (1-1/2%) when made to farmers for agricultural purposes.

(c) (i) 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, and parts and labor used to maintain and/or repair such implements, shall be taxed at the rate of one and one-half percent (1-1/2%) when used on the farm.

(ii) The one and one-half percent (1-1/2%) rate shall also apply to all equipment used in logging, pulpwood operations or tree farming, and parts and labor used to maintain and/or repair such equipment, which is either:

1. Self-propelled, or

2. Mounted so that it is permanently attached to other equipment which is self-propelled or permanently attached to other equipment drawn by a vehicle which is self-propelled.

In order to be eligible for the rate of tax provided for in this subparagraph (ii), such sales must be made to a professional logger. For the purposes of this subparagraph (ii), a "professional logger" is a person, corporation, limited liability company or other entity, or an agent thereof, who possesses a professional logger's permit issued by the Mississippi State Tax Commission and who presents the permit to the seller at the time of purchase. The commission shall establish an application process for a professional logger's permit to be issued, which shall include a requirement that the applicant submit a copy of documentation verifying that the applicant is certified according to Sustainable Forestry Initiative guidelines. Upon a determination that an applicant is a professional logger, the commission shall issue the applicant a numbered professional logger's permit.

(d) Except as otherwise provided in subsection (3) of this section, retail sales of aircraft, automobiles, trucks, truck-tractors, semitrailers and manufactured or mobile homes shall be taxed at the rate of three percent (3%).

(e) Sales of manufacturing machinery or manufacturing machine parts when made to a manufacturer or custom processor for plant use only when the 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%).

(f) Sales of machinery and machine parts when made to a technology intensive enterprise for plant use only when the machinery and machine parts will be used exclusively and directly within this state for industrial purposes, including, but not limited to, manufacturing or research and development activities, shall be taxed at the rate of one and one-half percent (1-1/2%). In order to be considered a technology intensive enterprise for purposes of this paragraph:

(i) The enterprise shall meet minimum criteria established by the Mississippi Development Authority;

(ii) The enterprise shall employ at least ten (10) persons in full-time jobs;

(iii) At least ten percent (10%) of the workforce in the facility operated by the enterprise shall be scientists, engineers or computer specialists;

(iv) The enterprise shall manufacture plastics, chemicals, automobiles, aircraft, computers or electronics; or shall be a research and development facility, a computer design or related facility, or a software publishing facility or other technology intensive facility or enterprise as determined by the Mississippi Development Authority;

(v) The average wage of all workers employed by the enterprise at the facility shall be at least one hundred fifty percent (150%) of the state average annual wage; and

(vi) The enterprise must provide a basic health care plan to all employees at the facility.

(g) 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%).

(h) 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%).

(i) 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.

(j) 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%).

(k) Sales of equipment used or designed for the purpose of assisting disabled persons, such as wheelchair equipment and lifts, that is mounted or attached to or installed on a private carrier of passengers or light carrier of property, as defined in Section 27-51-101, at the time when the private carrier of passengers or light carrier of property is sold shall be taxed at the same rate as the sale of such vehicles under this section.

(l) Sales of the factory-built components of modular homes, panelized homes and precut homes, and panel constructed homes consisting of structural insulated panels, shall be taxed at the rate of three percent (3%).

(m) Sales of materials used in the repair, renovation, addition to, expansion and/or improvement of buildings and related facilities used by a dairy producer shall be taxed at the rate of three and one-half percent (3-1/2%). For the purposes of this paragraph (m), "dairy producer" means any person engaged in the production of milk for commercial use.

(n) Retail sales of boats shall be taxed at the rate of four percent (4%).

(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.

(4) 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.

SECTION 2. (1) Upon every person, firm or corporation purchasing other than at wholesale within this state any boat required to be registered with the Mississippi Department of Wildlife, Fisheries and Parks from any person, firm or corporation which is not a licensed dealer engaged in selling boats, there shall be levied and collected a sales tax at the rate of three percent (3%) of the true value of the boat as calculated according to guidelines prescribed by the Department of Revenue.

(2) Upon every person, firm or corporation purchasing other than at wholesale outside the state any boat required to be registered with the Mississippi Department of Wildlife, Fisheries and Parks from any person, firm or corporation which is not a licensed dealer engaged in selling boats, for use, storage or other consumption within this state there is levied a use tax at the rate of three percent (3%) of the true value of the boat as calculated according to guidelines prescribed by the Department of Revenue.

(3) Where any boat is taken in trade as a credit or part payment on the sale of a boat taxable under this section, the tax levied by this section shall be paid on the net difference, that is, the true value of the boat sold less the credit for the boat taken in trade.

(4) The tax levied by this section shall be collected by the Mississippi Department of Wildlife, Fisheries and Parks at the time of, and as a prerequisite to, the registration of any such boat. The Mississippi Department of Wildlife, Fisheries and Parks shall give to the person registering the boat a receipt in a form prescribed and furnished by the Department of Revenue for the amount of tax collected.

(5) The Mississippi Department of Wildlife, Fisheries and Parks shall, on or before the twentieth day of each month, file a report with and pay to the Department of Revenue all funds collected under the provisions of this section, less a commission of three percent (3%) which shall be retained by the Mississippi Department of Wildlife, Fisheries and Parks as a commission for collecting such tax. The report required to be filed shall cover all collections made during the calendar month next preceding the date on which the report is due and filed.

Any error in the report and remittance to the Department of Revenue may be adjusted on a subsequent report. If the error was in the collection by the Mississippi Department of Wildlife, Fisheries and Parks, it shall be adjusted through the Mississippi Department of Wildlife, Fisheries and Parks with the taxpayer before credit is allowed by the Department of Revenue.

All information relating to the collection of this tax by the Mississippi Department of Wildlife, Fisheries and Parks and such records as the Department of Revenue may require shall be preserved in the Mississippi Department of Wildlife, Fisheries and Parks' office for a period of three (3) years for audit by the Department of Revenue.

(6) The tax levied by this section shall not apply to the following:

(a) Transfers of legal ownership of boats currently registered or licensed in the transferor's name between husband and wife, parent and child, or grandparents and grandchildren, unless the transferor is a licensed dealer of boats and the transfer of the boat is made in the regular course of business.

(b) Transfers of legal ownership of boats pursuant to a will or pursuant to any law providing for the distribution of the property of one dying intestate.

SECTION 3. This act shall take effect and be in force from and after July 1, 2012.