Senate Bill 2942

AN ACT TO AMEND SECTIONS 27-13-5 AND 27-13-7, MISSISSIPPI CODE OF 1972, TO PHASE OUT THE CORPORATION FRANCHISE TAX ON BUSINESS ENTERPRISES THAT ARE CLASSIFIED UNDER THE INTERNAL REVENUE SERVICE PRINCIPAL BUSINESS OR PROFESSIONAL ACTIVITY CODES AS MANUFACTURERS AND PRIMARILY OPERATING AS A MANUFACTURER IN THIS STATE; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-13-5, Mississippi Code of 1972, is amended as follows:

27-13-5. (1) Franchise tax levy. (a) Except as otherwise provided in paragraph (b) of this subsection and subsections (3), (4), (5) * * * ~~and~~, (7) and (8) of this section, there is hereby imposed, to be paid and collected as hereinafter provided, a franchise or excise tax upon every corporation, association or joint-stock company or partnership treated as a corporation under the income tax laws or regulations, organized or created for pecuniary gain, having privileges not possessed by individuals, and having authorized capital stock now existing in this state, or hereafter organized, created or established, under and by virtue of the laws of the State of Mississippi, equal to Two Dollars and Fifty Cents ($2.50) for each One Thousand Dollars ($1,000.00), or fraction thereof, of the value of the capital used, invested or employed in the exercise of any power, privilege or right enjoyed by such organization within this state, except as hereinafter provided. In no case shall the franchise tax due for the accounting period be less than Twenty-five Dollars ($25.00). It is the purpose of this section to require the payment to the State of Mississippi of this tax for the right granted by the laws of this state to exist as such organization, and to enjoy, under the protection of the laws of this state, the powers, rights, privileges and immunities derived from the state by the form of such existence.

(b) From and after January 1, 2015, except as otherwise provided in subsections (3), (4), (5) and (7) of this section and in lieu of the tax authorized in paragraph (a) of this subsection, for a business enterprise that is classified under the Internal Revenue Service Principal Business or Professional Activity Codes as a manufacturer and primarily operating as a manufacturer in this state, there is hereby imposed, to be paid and collected as hereinafter provided, a franchise or excise tax equal to the following:

(i) For tax years beginning on or after January 1, 2015, but before January 1, 2016, One Dollar and Seventy-five Cents ($1.75) for each One Thousand Dollars ($1,000.00), or fraction thereof, of the value of the capital used, invested or employed in the exercise of any power, privilege or right enjoyed by such organization except as hereinafter provided.

(ii) For tax years beginning on or after January 1, 2016, but before January 1, 2017, One Dollar ($1.00) for each One Thousand Dollars ($1,000.00), or fraction thereof, of the value of the capital used, invested or employed in the exercise of any power, privilege or right enjoyed by such organization except as hereinafter provided.

(iii) For tax years beginning on or after January 1, 2017, but before January 1, 2018, Fifty Cents (50¢) for each One Thousand Dollars ($1,000.00), or fraction thereof, of the value of the capital used, invested or employed in the exercise of any power, privilege or right enjoyed by such organization except as hereinafter provided.

(2) Annual report of domestic corporations. Each domestic corporation shall file an annual report as required by the provisions of Section 79-4-16.22.

(3) A corporation that has negotiated a fee-in-lieu as defined in Section 57-75-5 shall not be subject to the tax levied by this section on such project; provided, however, that the fee-in-lieu payment shall be otherwise treated in the same manner as the payment of franchise taxes.

(4) An approved business enterprise as defined in the Growth and Prosperity Act shall not be subject to the tax levied by this section on the value of capital used, invested or employed by the approved business enterprise in a growth and prosperity county or supervisors district as provided in the Growth and Prosperity Act.

(5) A business enterprise operating a project as defined in Section 57-64-33, in a county that is a member of a regional economic development alliance created under the Regional Economic Development Act shall not be subject to the tax levied by this section on the value of capital used, invested or employed by the business enterprise in such a county as provided in Section 57-64-33.

(6) The tax levied by this chapter and paid by a business enterprise located in a redevelopment project area under Sections 57-91-1 through 57-91-11 shall be deposited into the Redevelopment Project Incentive Fund created in Section 57-91-9.

(7) A business enterprise as defined in Section 57-113-1 that is exempt from certain state taxes under Section 57-113-5 shall not be subject to the tax levied by this section on the value of capital used, invested or employed by the business enterprise.

(8) For tax years beginning from and after January 1, 2018, a business enterprise that is classified under the Internal Revenue Service Principal Business or Professional Activity Codes as a manufacturer and primarily operating as a manufacturer in this state shall not be subject to the tax levied by this section on the value of capital used, invested or employed by the business enterprise.

SECTION 2. Section 27-13-7, Mississippi Code of 1972, is amended as follows:

27-13-7. (1) Franchise tax levy. (a) Except as otherwise provided in paragraph (b) of this subsection and in subsections (3), (4), (5) * * *~~and~~, (7) and (8) of this section, there is hereby imposed, levied and assessed upon every corporation, association or joint-stock company, or partnership treated as a corporation under the income tax laws or regulations as hereinbefore defined, organized and existing under and by virtue of the laws of some other state, territory or country, or organized and existing without any specific statutory authority, now or hereafter doing business or exercising any power, privilege or right within this state, as hereinbefore defined, a franchise or excise tax equal to Two Dollars and Fifty Cents ($2.50) of each One Thousand Dollars ($1,000.00), or fraction thereof, of the value of capital used, invested or employed within this state, except as hereinafter provided. In no case shall the franchise tax due for the accounting period be less than Twenty-five Dollars ($25.00). It is the purpose of this section to require the payment of a tax by all organizations not organized under the laws of this state, measured by the amount of capital or its equivalent, for which such organization receives the benefit and protection of the government and laws of the state.

(2) Annual report of foreign corporations. Each foreign corporation authorized to transact business in this state shall file an annual report as required by the provisions of Section 79-4-16.22.

SECTION 3. This act shall take effect and be in force from and after July 1, 2014.