MISSISSIPPI LEGISLATURE

2012 Regular Session

To: Finance

By: Senator(s) Fillingane

Senate Bill 2674

AN ACT TO CREATE A UNIFORM STATEWIDE SYSTEM FOR FILING NOTICES OF TAX LIENS WITH THE SECRETARY OF STATE THAT ARE IN FAVOR OF OR ENFORCED BY THE DEPARTMENT OF REVENUE; TO PROVIDE THAT THIS ACT IS LIMITED TO TAX LIENS IN REAL PROPERTY AND PERSONAL PROPERTY, TANGIBLE AND INTANGIBLE, OF TAXPAYERS OR OTHER PERSONS AGAINST WHOM THE DEPARTMENT OF REVENUE HAS LIENS PURSUANT TO LAW FOR UNPAID FINALLY DETERMINED TAX LIABILITIES ADMINISTERED BY THE DEPARTMENT OF REVENUE; TO PROVIDE THE REQUISITES FOR ENROLLMENT OF NOTICES OF TAX LIENS WITH THE SECRETARY OF STATE; TO PROVIDE THE EFFECT OF ENROLLMENT OF A NOTICE OF TAX LIEN WITH THE SECRETARY OF STATE; TO AUTHORIZE THE DEPARTMENT OF REVENUE TO PAY CERTAIN FEES TO THE SECRETARY OF STATE FOR ENROLLMENT, REENROLLMENT AND RELEASE OF NOTICES OF TAX LIENS; TO PROVIDE THAT A NOTICE OF TAX LIEN FILED WITH THE SECRETARY OF STATE SHALL BE A LIEN UPON THE DEBTOR'S PROPERTY FOR A PERIOD OF 7 YEARS FROM THE DATE OF ENROLLMENT UNLESS IT IS SOONER RELEASED BY THE DEPARTMENT OR THE DEPARTMENT REENROLLS THE NOTICE OF TAX LIEN BEFORE THE EXPIRATION OF THE 7 YEARS; TO PROVIDE THAT IN THE EVENT THAT A NOTICE OF TAX LIEN LAPSES UPON THE EXPIRATION OF 7 YEARS, THE NOTICE OF TAX LIEN MAY, IN THE SOLE DISCRETION OF THE DEPARTMENT, BE REENROLLED WITH THE SECRETARY OF STATE; TO PROVIDE FOR RELEASES OF NOTICES OF TAX LIENS; TO PROVIDE THE MANNER IN WHICH NOTICES OF TAX LIENS SHALL BE MAINTAINED BY THE SECRETARY OF STATE; TO AMEND SECTIONS 27-7-55 AND 27-13-29, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FILING OF NOTICES OF TAX LIENS FOR INCOME AND FRANCHISE TAX PENALTIES AND INTEREST WITH THE CIRCUIT CLERK ON THE JUDGMENT ROLL OF THE COUNTY IN WHICH THE TAXPAYER RESIDES OR OWNS PROPERTY, SHALL BE OPTIONAL; AND FOR RELATED PURPOSES.

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

SECTION 1. This act may be cited as the Mississippi Uniform State Tax Lien Registration and Enforcement Act.

SECTION 2. (1) The purpose of this act is to provide a uniform statewide system for filing notices of tax liens with the Secretary of State that are in favor of or enforced by the Mississippi Department of Revenue.

(2) The scope of this act is limited to tax liens in real property and personal property, tangible and intangible, of taxpayers or other persons against whom the Mississippi Department of Revenue has liens pursuant to law for unpaid finally determined tax liabilities administered by the Mississippi Department of Revenue.

SECTION 3. As used in this act:

(a) "Commissioner" means the Commissioner of Revenue of the Mississippi Department of Revenue.

(b) "Debtor" and "Judgment Debtor" means a taxpayer or other person against whom there is an unpaid finally determined tax liability collectible by the Mississippi Department of Revenue.

(c) "Delivered" means transmission to and receipt by the Office of the Secretary of State of a notice of lien or other notice in any medium to which the Mississippi Department of Revenue and the Office of the Secretary of State have agreed.

(d) "Department" means the Mississippi Department of Revenue.

(e) "Finally determined tax liabilities" means any state tax, fee, penalty, and/or interest owed by a person to the Mississippi Department of Revenue where the assessment of the liability is not subject to any further timely filed administrative or judicial review.

(f) "Last-known address of the debtor" means the address of the debtor appearing on the records of the department for which the finally determined tax liabilities were assessed at the time the notice of tax lien is sent by the department to the Office of the Secretary of State.

(g) "Person" means an individual, organization or legal entity.

SECTION 4. (1) If any taxpayer refuses to pay any finally determined tax liabilities, the commissioner may enroll with the Office of the Secretary of State a notice of tax lien for the finally determined tax liabilities due.

(2) The notice of tax lien file shall include:

(a) The name and last-known address of the debtor;

(b) The name and address of the department;

(d) The basis for the tax lien, including, but not limited to, the amount owed as of the date of enrollment with the Office of the Secretary of State.

(3) The notice of tax lien shall be delivered to and receipt thereof shall be acknowledged by the Office of the Secretary of State in a medium and format to which the department and the Office of the Secretary of State have agreed.

(4) Each notice of tax lien shall be authenticated by the department in a manner in which the department and Office of the Secretary of State have agreed.

(5) A notice of tax lien is enrolled when it complies with subsections (1) through (4) of this section and has been delivered to and receipt acknowledged by the Office of the Secretary of State.

SECTION 5. (1) When a notice of tax lien is enrolled by the department in the Office of the Secretary of State, the tax lien is perfected and shall be attached to all of the existing and after-acquired property of the debtor, both real and personal, tangible and intangible, which is located in any and all counties within the State of Mississippi.

(2) The perfected tax lien shall be valid as against mortgagees, pledgees, entrusters, purchasers, judgment creditors, and other persons from the time of enrollment with the Office of the Secretary of State.

(3) The amount of the tax lien shall be a debt due the State of Mississippi and shall remain a lien upon all property and rights to property belonging to the debtor, both real and personal, tangible and intangible, which is located in any and all counties within the State of Mississippi, including choses in action, with the same force and like effect as any enrolled judgment of a court of record. Interest and penalty shall accrue on the tax lien at the same rate and with the same restrictions, if any, as specified by statute for the accrual of interest and penalty for the type of tax or taxes for which the tax lien was issued.

(4) The notice of tax lien shall serve as authority for the issuance of writs of execution, writs of attachment, writs of garnishment or other remedial writs. In addition to those writs, the notice of tax lien shall also serve as authority for the commissioner to issue warrants under Sections 27-7-57, 27-13-31, and 27-65-59 for the collection of the tax lien. Once issued, the execution of the warrants shall be in accordance with Section 27-3-33(4) for the levy on salaries, compensation or other monies due the delinquent taxpayer, Sections 27-7-61 through 27-7-67 in regard to income tax and withholding tax, Sections 27-13-35 through 27-13-41 for franchise tax, and Sections 27-65-63 through 27-65-69 for sales tax and any other tax or fee administered by the department that utilizes the administrative provisions of the sales tax law in the administration of the tax or fee. Under warrants issued for the tax liens enrolled with the Office of the Secretary of State, any property, real or personal, within the State of Mississippi is subject to execution under the warrant and any salary, compensation or other monies owed to the debtor named in the tax lien is subject to levy under Section 27-3-33(4) if the person that owes the salary, compensation or other monies to the debtor is subject to service of process in this state.

(5) The department is authorized to pay to the Office of the Secretary of State the following fees for enrolling notices of tax liens, reenrolling notices of tax liens, and releasing notices of tax liens out of funds appropriated by the Legislature to defray expenses of the department:

(a) The fee for the enrollment of notices of tax liens shall be Two Dollars ($2.00);

(b) The fee for the reenrollment of notices of tax liens shall be Two Dollars ($2.00); and

The fees shall be included in the full amount owed by the debtor.

SECTION 6. (1) A notice of tax lien shall be a lien upon the debtor's property for a period of seven (7) years from the date of enrollment unless:

(a) It is sooner released by the department; or

(b) The department reenrolls the notice of tax lien before the expiration of the seven (7) years. There shall be no limit upon the number of times that the department may reenroll notices of tax liens.

(2) In the event that a notice of tax lien lapses on the expiration of seven (7) years, the notice of tax lien may, in the sole discretion of the department, be reenrolled. A notice of tax lien that is reenrolled pursuant to this subsection shall be fully enforceable as of the date of reenrollment; however, any notice of tax lien that is reenrolled after the lapse of the seven-year period shall lose the priority it had prior to its expiration. There shall be no limit upon the number of times that the Department may reenroll notices of tax liens in this manner.

(3) If the department reenrolls a notice of tax lien, the notice of tax lien in regard to that reenrollment shall contain the following information:

(a) The name and last-known address of the debtor;

(b) The name and address of the department;

(d) The tax lien number assigned to the lien by the department; and

(e) The basis for the tax lien, including, but not limited to, the amount owed as of the date of reenrollment with the Office of the Secretary of State.

(4) The reenrollment of the tax lien with the Office of the Secretary of State within the seven-year period shall constitute a continuation of the tax lien appearing on the judgment roll of the county as it relates to real and personal property belonging to the debtor in that county. A notice of release of tax lien filed with the Office of the Secretary of State shall constitute a release of tax lien within both the Office of the Secretary of State and the county in which the tax lien was previously enrolled.

SECTION 7. The department, in its sole discretion, may withdraw a notice of tax lien from the registry of the Office of the Secretary of State. The notice of tax lien shall be stricken and removed as though never enrolled.

SECTION 8. (1) Within fifteen (15) working days from the receipt by the department of full payment of a tax lien enrolled with the Secretary of State, including payment of any additionally accruing interest, penalty, fees and/or costs, the department shall file with the Secretary of State a notice of release of the tax lien being paid.

(2) The notice of release of tax lien shall be delivered to and receipt thereof acknowledged by the Office of the Secretary of State in a medium and format to which the department and the Office of the Secretary of State have agreed, and shall be authenticated by the department in a manner to which the department and the Office of the Secretary of State have agreed.

(3) In the event that a notice of release of tax lien is issued in error by the department and received by the Office of the Secretary of State; or the form of payment received by the department is not honored and/or the transfer of payment to the department is not completed for any reason after the notice of release of tax lien is received by the Office of the Secretary of State; or the department is required to return and/or turnover the payment received to the taxpayer or other person due to bankruptcy, a court order or other proceedings after the notice of release of the tax lien issued as a result of the payment is received by the Office of the Secretary of State; the department, in its sole discretion, may enroll a new tax lien for the finally determined taxes represented in the tax lien for which the notice of release of tax lien was issued, including any additional accruing interest, penalty and/or filing fees to the date of the new enrollment. A notice of tax lien that is enrolled pursuant to this provision shall be fully enforceable as of the date of the new enrollment.

SECTION 9. (1) The Office of the Secretary of State shall maintain notices of tax liens filed with it after the effective date of this act in its information management system in a form that permits them to be readily accessible in an electronic form through internet and to be reduced to printed form. The electronic and printed form shall include the following information:

(a) The name of the taxpayer as judgment debtor;

(b) The name and address of the department;

(d) Whether the enrollment is the first enrollment of the tax lien or a reenrollment of the tax lien;

(e) The amount of the taxes, penalties, interest, and filing fees indicated to be due on the notice of tax lien received from the department; and

(f) The date and time of enrollment or reenrollment.

(2) The Office of the Secretary of State shall not charge for the access to information on the enrollment of tax liens.

SECTION 10. All tax liens enrolled or reenrolled on the judgment rolls of the counties of this state shall remain on the judgment rolls of the county in which the tax lien was enrolled and have the force and effect of a judgment in that county for the duration of seven (7) years from the last date of enrollment or reenrollment unless and until such time as the department reenrolls the tax lien with the Office of the Secretary of State. The reenrollment of a tax lien with the Office of the Secretary of State within this seven-year period shall constitute a continuation of the tax lien appearing on the judgment roll of the county as it relates to real and personal property belonging to the debtor in that county.

SECTION 11. Section 27-7-55, Mississippi Code of 1972, is amended as follows:

27-7-55. If any taxpayer, liable for the payment of income taxes, penalties or interest, fails or refuses to pay them after receiving the notice and demands as provided in Sections 27-7-49, 27-7-51 and 27-7-53, and if the taxpayer has not filed a timely appeal to the board of review as provided by law, the commissioner may file a notice of tax lien for the income taxes, penalties and interest with the circuit clerk of the county in which the taxpayer resides or owns property, which shall be enrolled on the judgment roll. Immediately upon receipt of the notice of tax lien for income taxes, penalties and interest, the circuit clerk shall enter upon the judgment roll, in the appropriate columns, the name of the taxpayer as judgment debtor, the name of the commissioner or Department of Revenue as judgment creditor, the amount of the taxes, penalties and interest, and the date and time of enrollment. The judgment shall be valid as against mortgagees, pledgees, entrusters, purchasers, judgment creditors, and other persons from the time of filing with the clerk. The amount of the judgment shall be a debt due the State of Mississippi and remain a lien upon all property and rights to property belonging to the taxpayer, both real and personal, including choses in action, with the same force and like effect as any enrolled judgment of a court of record, and shall continue until satisfied; however, the judgment shall not be a lien upon the property of the taxpayer for a longer period than seven (7) years from the date of the filing of the notice of tax lien for income taxes, penalties and interest unless an action is brought on the lien before the expiration of such time or unless the commissioner refiles the notice of tax lien before the expiration of such time. The judgment shall be a lien upon the property of the taxpayer for a period of seven (7) years from the date of refiling such notice of tax lien unless an action is brought on the lien before the expiration of such time or unless the commissioner refiles such notice of tax lien before the expiration of such time. There shall be no limit upon the number of times that the commissioner may refile notices of tax liens. The judgment shall serve as authority for the issuance of writs of execution, writs of attachment, writs of garnishment or other remedial writs. The commissioner may issue warrants for collection of income taxes from such judgments in lieu of the issuance of any remedial writ by the circuit clerk.

Upon failure to pay the taxes imposed under this article by any taxpayer who has executed any bond, the commissioner shall give notice of the failure to the sureties of the bond and demand payment of the tax, penalties and interest within ten (10) days. If the sureties of the taxpayer's bond shall fail or refuse to pay the penal sum demanded within the ten (10) days allowed, the commissioner shall file a notice of tax lien with the circuit clerk of the county in which the sureties reside or own property, which shall be enrolled upon the judgment roll, and the commissioner may proceed to collect from the sureties as * * * provided in this section for collecting from any judgment debtor.

The commissioner is hereby authorized to pay the clerk's fee for enrolling certificates of indebtedness and any court costs that may be adjudged against the commission or commissioner out of funds appropriated by the Legislature to defray expenses of the Department of Revenue.

SECTION 12. Section 27-13-29, Mississippi Code of 1972, is amended as follows:

27-13-29. If any taxpayer, liable for the payment of franchise taxes, penalties or interest, fails or refuses to pay them after receiving the notice and demands as provided in Section 27-13-23 or 27-13-25, and if such taxpayer has not filed a timely appeal to the board of review as provided by law, the commissioner may file a notice of tax lien for the franchise taxes, penalties, and interest with the circuit clerk of the county in which the taxpayer resides or owns property, which, shall be enrolled on the judgment roll. Immediately upon receipt of the notice of tax lien for franchise taxes, penalties and interest, the circuit clerk shall enter upon the judgment roll, in the appropriate columns, the name of the taxpayer as judgment debtor, the name of the commissioner or Department of Revenue as judgment creditor, the amount of the taxes, penalties and interest, and the date and time of enrollment. The judgment shall be valid as against mortgagees, pledgees, entrusters, purchasers, judgment creditors, and other persons from the time of filing with the clerk. The amount of the judgment shall be a debt due the State of Mississippi and remain a lien upon all property and rights to property belonging to the taxpayer, both real and personal, including choses in action, with the same force and like effect as any enrolled judgment of a court of record, and shall continue until satisfied. Such judgment shall serve as authority for the issuance of writs of execution, writs of attachments, writs of garnishment or other remedial writs. The commissioner may issue warrants for collection of franchise taxes from such judgments in lieu of the issuance of any remedial writ by the circuit clerk.

Upon failure to pay the taxes imposed under this chapter by any taxpayer who has executed any bond, the commissioner shall give notice of the failure to the sureties of such bond and demand payment of the tax, penalties and interest within ten (10) days. If the sureties of the taxpayer's bond shall fail or refuse to pay the penal sum demanded within the ten (10) days allowed, the commissioner shall file a notice of tax lien with the circuit clerk of the county in which the sureties reside or own property, which shall be enrolled upon the judgment roll, and the commissioner may proceed to collect from the sureties as provided in this section for collecting from any judgment debtor.

SECTION 13. This act shall take effect and be in force from and after July 1, 2012.