MISSISSIPPI LEGISLATURE
2017 Regular Session
To: Finance
By: Senator(s) Fillingane
AN ACT TO AMEND SECTIONS 27-7-55, 27-7-307, 27-13-29 AND 27-65-55, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT PERSONS WITH CERTAIN OWNERSHIP INTERESTS IN A CORPORATION OR LIMITED LIABILITY COMPANY SHALL BE LIABLE FOR INCOME, WITHHOLDING, FRANCHISE AND SALES TAXES DUE FROM THE CORPORATION OR LIMITED LIABILITY COMPANY; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 27-7-55, Mississippi Code of 1972, is amended as follows:
27-7-55. (1) (a)
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 * * * the notice of tax lien 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. 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 * * * the judgments in lieu of the
issuance of any remedial writ by the circuit clerk.
(b) 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 may 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.
(c) The
commissioner is * * *
authorized to pay the clerk's fee for enrolling certificates of indebtedness
and any court costs that may be adjudged against the department or commissioner
out of funds appropriated by the Legislature to defray expenses of the
Department of Revenue.
(2) (a) Persons owning stock of fifty percent (50%) or more of the total of corporations or fifty percent (50%) interest in limited liability companies with thirty-five (35) or less owners also shall be liable for amounts due from the corporation or limited liability company under this article, including interest and penalties thereon, when the amounts become due and unpaid to the extent that the amounts accrued while the person owned the stock or interest.
(b) Persons owning stock of ten percent (10%) or more of the total of corporations or ten percent (10%) or more interest in limited liability companies with thirty-five (35) or less owners and exercising responsibilities for fiscal management of the corporation or limited liability company also shall be liable for amounts due from the corporation or limited liability company under this article, including interest and penalties thereon, when the amounts become due and unpaid to the extent that the amounts accrued while the person was exercising responsibilities for fiscal management.
(c) The liability under this subsection is derivative of the corporation or limited liability company, and the three-year assessment period provided in Section 27-7-49 will begin to run after the liability of the corporation or limited liability company becomes final. A person being assessed under this subsection may appeal his liability under Section 27-77-5 solely regarding the issue of the ownership interest and management requirements of this subsection. The commissioner shall make assessments against and effect collection from persons liable under this subsection by the same procedures provided for assessment and collections of taxes levied by this article.
SECTION 2. Section 27-7-307, Mississippi Code of 1972, is amended as follows:
27-7-307. (1) Every
employer shall be liable for amounts required to be deducted and withheld by
this article regardless of whether or not the amounts were in fact deducted and
withheld, except that if the employer fails to deduct and withhold the required
amounts and if the tax against which the required amounts would have been
credited is paid, the employer shall not be liable for those amounts not
deducted and withheld if * * * such the failure was due to reasonable cause.
(2) (a) Persons owning stock of fifty percent (50%) or more of the total of corporations or fifty percent (50%) interest in limited liability companies with thirty-five (35) or less owners also shall be liable for amounts withheld or required to be withheld under this article, including interest and penalties thereon, when the amounts become due and unpaid to the extent that the amounts accrued while the person owned the stock or interest.
(b)
Persons owning stock of ten percent (10%) or more of the total of
corporations or ten percent (10%) interest in limited liability companies with
thirty-five (35) or less owners and exercising responsibilities for fiscal
management of * * *
the corporation or limited liability company also shall be liable for
amounts withheld or required to be withheld under this article, including
interest and penalties thereon, when * * * the amounts become due and unpaid
to the extent that * * *
the amounts accrued while * * * the person was exercising
responsibilities for fiscal management.
(c) The liability
under this subsection is derivative of the corporation or limited liability
company, and the three-year assessment period provided in Section 27-7-49 will
begin to run after the liability of the corporation or limited liability
company becomes final. A person being assessed under this subsection may
appeal his liability under Section 27-77-5 solely regarding the issue of the
ownership interest and management requirements of this subsection. The
commissioner shall make assessments against and effect collection from * * * persons liable under this subsection
pursuant to the provisions of this article for the making of withholding tax
determinations against employers.
SECTION 3. Section 27-13-29, Mississippi Code of 1972, is amended as follows:
27-13-29. (1) (a)
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 * * * 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 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. * * * The 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 * * * the judgments in lieu of the
issuance of any remedial writ by the circuit clerk.
(b) 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 * * *
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
may 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.
(c) The
commissioner is * * *
authorized to pay the clerk's fee for enrolling certificates of indebtedness
and any court costs that may be adjudged against the department or commissioner
out of funds appropriated by the Legislature to defray expenses of the
Department of Revenue.
(2) (a) Persons owning stock of fifty percent (50%) or more of the total of corporations or fifty percent (50%) interest in limited liability companies with thirty-five (35) or less owners also shall be liable for amounts due under this chapter, including interest and penalties thereon, when the amounts become due and unpaid to the extent that the amounts accrued while the person owned the stock or interest.
(b) Persons owning stock of ten percent (10%) or more of the total of corporations or ten percent (10%) or more interest in limited liability companies with thirty-five (35) or less owners and exercising responsibilities for fiscal management of the corporation or limited liability company also shall be liable for amounts due under this chapter, including interest and penalties thereon, when the amounts become due and unpaid to the extent that the amounts accrued while the person was exercising responsibilities for fiscal management.
(c) The liability under this subsection is derivative of the corporation or limited liability company, and the three-year assessment period provided in Section 27-13-25 will begin to run after the liability of the corporation or limited liability company becomes final. A person being assessed under this subsection may appeal his liability under Section 27-77-5 solely regarding the issue of the ownership interest and management requirements of this subsection. The commissioner shall make assessments against and effect collection from persons liable under this subsection by the same procedures provided for assessment and collections of taxes levied by this chapter.
SECTION 4. Section 27-65-55, Mississippi Code of 1972, is amended as follows:
27-65-55. (1) The tax
imposed by this chapter shall be a lien upon the property of any person subject
to the provisions thereof who shall sell out his business or stock of goods, or
shall quit business, and * * *such the person shall be required to make out the
return provided for under Section 27-65-33 within ten (10) days after the date
he sold out his business or stock of goods, or quit business, and pay the tax
imposed by this chapter. The purchaser or transferee in business shall be
required to withhold sufficient of the purchase money to cover the amount of
any taxes, damages and interest due until such time as the former owner shall
produce a receipt from the commissioner showing that * * * the liability has been paid, or a
certificate that no taxes are due. In the event the former owner shall fail to
pay any taxes, damages and interest due the state within the time allowed, the
successor in business shall pay * * * the taxes, damages and interest to
the commissioner upon demand. If the purchaser or transferee of a business or
stock of goods shall fail to withhold purchase money as provided and the taxes,
damages and interest shall be due and unpaid after the period of ten (10) days
allowed, he shall be personally liable for the payment of taxes, damages and
interest of the former owner, and the property sold or transferred may be
proceeded against by the commissioner in the hands of the purchaser or
transferee as though no sale or transfer had been made.
(2) (a) Persons owning stock of fifty percent (50%) or more of the total of corporations or fifty percent (50%) interest in limited liability companies with thirty-five (35) or less owners also shall be liable sales taxes levied by this chapter upon the corporation when the taxes become due and unpaid to the extent that the amounts accrued while the person owned the stock or interest.
(b) Persons
owning stock of ten percent (10%) or more of the total of corporations or ten
percent (10%) interest in limited liability companies with thirty-five (35) or
fewer owners and exercising responsibility for fiscal management, also shall be
liable for sales taxes levied by this chapter upon * * * the corporations when * * * the taxes become due and unpaid to
the extent that * * *
the taxes accrued while * * * the person was exercising
responsibility for fiscal management.
(c) The liability under this subsection is derivative of the corporation or limited liability company, and the thirty-six-month assessment period in Section 27-65-42 will begin to run after the liability of the corporation or limited liability company becomes final. A person being assessed under this subsection may appeal his liability under Section 27-77-5 solely regarding the issue of the ownership interest and management requirements of this subsection.
(d) The
commissioner shall make assessments against * * * persons liable under this subsection
of * * * the
taxes, damages and interest, and effect collection by the same procedures * * * provided for assessment and collection
of all taxes levied by this chapter.
(3) Any person, acting as
agent for a dealer who has no permanent place of business in this state, who
sells tangible personal property in this state, either at auction or as a
transient vendor, shall be liable for collection of sales tax, where
applicable, and payment of the same of this state unless the vendor principal
is authorized to collect the tax and is registered under Section 27-65-27.
Such persons shall maintain for a period of three (3) years adequate records
which shall be available for inspection by the commissioner or his agent and
which shall reveal the true sales tax liability of all parties to each
transaction. Failure to maintain and permit examination of * * * the records shall render the agent
liable for sales tax accruing from all sales as determined by the commissioner
from any information available. The commissioner shall effect collection by
the same procedures herein provided for assessment and collection of all taxes
levied by this chapter.
SECTION 5. This act shall take effect and be in force from and after July 1, 2017.