House Bill 500

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS BY TAXPAYERS TO RURAL HOSPITALS; TO LIMIT THE AMOUNT OF THE CREDIT; TO PROVIDE THAT UNUSED PORTIONS OF A CREDIT MAY BE CARRIED FORWARD FOR FIVE CONSECUTIVE YEARS FROM THE CLOSE OF THE TAX YEAR IN WHICH THE CREDIT WAS EARNED; TO PROVIDE THAT CONTRIBUTIONS FOR WHICH CREDITS ARE CLAIMED UNDER THIS ACT MAY NOT BE USED AS DEDUCTIONS FOR STATE TAX PURPOSES; TO PROVIDE THE CRITERIA THAT A HOSPITAL MUST MEET IN ORDER FOR A CONTRIBUTION TO THE HOSPITAL TO QUALIFY FOR THE CREDIT AUTHORIZED BY THIS ACT; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) For the purposes of this section, the following words and phrases shall have the meanings ascribed in this section unless the context clearly indicates otherwise:

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

(b) "Rural hospital" means a licensed hospital that has fifty (50) or fewer licensed beds.

(c) "Voluntary cash contribution" means a cash contribution made to a rural hospital by the taxpayer applying for a credit and does not include payment for or the donation of merchandise, services or goods.

(2) (a) (i) The tax credit authorized in this subsection shall be available only to a taxpayer who is a business enterprise engaged in commercial, industrial or professional activities and operating as a corporation, limited liability company, partnership or sole proprietorship. Except as otherwise provided in this subsection, a credit is allowed against the taxes imposed by this chapter for voluntary cash contributions made by a taxpayer during a taxable year to a rural hospital. The amount of credit that may be utilized by a taxpayer in a taxable year shall be limited to an amount not to exceed the lesser of the amount contributed during a taxable year or seventy-five percent (75%) of the total tax liability of the taxpayer for the taxable year. Any tax credit claimed under this subsection but not used in any taxable year may be carried forward for five (5) consecutive years from the close of the taxable year in which the credits were earned.

(ii) A contribution to a rural hospital for which a credit is claimed under this subsection does not qualify for and shall not be included in any credit that may be claimed under subsection (2) of this section.

(iii) A contribution for which a credit is claimed under this subsection may not be used as a deduction by the taxpayer for state income tax purposes.

(b) A taxpayer claiming a credit authorized by this subsection shall provide the name of the rural hospital and the amount of the contribution to the department on forms provided by the department.

(c) A rural hospital shall provide the department with a written certification that it meets the criteria to be considered a rural hospital. The rural hospital shall also notify the department of any changes that may affect eligibility under this subsection.

(d) The department shall review each written certification and determine whether the hospital meets the criteria to be considered a rural hospital and notify the hospital of its determination. The department may also periodically request recertification from the hospital. The department shall compile and make available to the public a list of eligible rural hospitals.

(e) Tax credits authorized by this subsection that are earned by a partnership, limited liability company, S corporation or other similar pass-through entity, shall be allocated among all partners, members or shareholders, respectively, either in proportion to their ownership interest in such entity or as the partners, members or shareholders mutually agree as provided in an executed document.

(f) A taxpayer shall apply for credits with the department on forms prescribed by the department. In the application the taxpayer shall certify to the department the dollar amount of the contributions made or to be made during the calendar year. Within thirty (30) days after the receipt of an application, the department shall allocate credits based on the dollar amount of contributions as certified in the application. However, if the department cannot allocate the full amount of credits certified in the application due to the limit on the aggregate amount of credits that may be awarded under this subsection in a calendar year, the department shall so notify the applicant within thirty (30) days with the amount of credits, if any, that may be allocated to the applicant in the calendar year. Once the department has allocated credits to a taxpayer, if the contribution for which a credit is allocated has not been made as of the date of the allocation, then the contribution must be made not later than sixty (60) days from the date of the allocation. Documentation of the contribution must be received by the department within seventy-five (75) days from the date of the allocation or January 15^th of the following year, whichever occurs first. If the contribution is not made or the department does not receive documentation of the contribution within such time period, the allocation shall be cancelled and returned to the department for reallocation. Upon final documentation of the contributions, if the actual dollar amount of the contributions is lower than the amount estimated, the department shall adjust the tax credit allowed under this subsection.

(g) The aggregate amount of tax credits that may be allocated by the department under this subsection during a calendar year shall not exceed Fifteen Million Dollars ($15,000,000.00).

(h) The department shall not allocate any credits under this subsection after January 1, 2025.

(3) (a) (i) Except as otherwise provided in this subsection, a credit is allowed against the taxes imposed by this chapter for voluntary cash contributions made by a taxpayer during a taxable year to a rural hospital. The amount of credit that may be utilized by a taxpayer in a taxable year shall not exceed: 1. The lesser of the amount contributed during a taxable year or the total tax liability of the taxpayer for the taxable year for a single individual or a head of household.

2. The lesser of the amount contributed during a calendar year or the total tax liability of the taxpayer for the taxable year for a married couple filing a joint return.

A husband and wife who file separate returns for a taxable year in which they could have filed a joint return may each claim only one-half (1/2) of the tax credit that would have been allowed for a joint return.

(ii) Any tax credit claimed under this subsection but not used in any taxable year may be carried forward for five (5) consecutive years from the close of the taxable year in which the credits were earned.

(iii) A contribution to a rural hospital for which a credit is claimed under this subsection does not qualify for and shall not be included in any credit that may be claimed under subsection (1) of this section.

(iv) A contribution for which a credit is claimed under this subsection may not be used as a deduction by the taxpayer for state income tax purposes.

(b) A taxpayer claiming a credit authorized by this subsection shall provide the name of the rural hospital and the amount of the contribution to the department on forms provided by the department.

(e) A taxpayer shall apply for credits with the department on forms prescribed by the department. In the application the taxpayer shall certify to the department the dollar amount of the contributions made or to be made during the calendar year. Within thirty (30) days after the receipt of an application, the department shall allocate credits based on the dollar amount of contributions as certified in the application. However, if the department cannot allocate the full amount of credits certified in the application due to the limit on the aggregate amount of credits that may be awarded under this subsection in a calendar year, the department shall so notify the applicant within thirty (30) days with the amount of credits, if any, that may be allocated to the applicant in the calendar year. Once the department has allocated credits to a taxpayer, if the contribution for which a credit is allocated has not been made as of the date of the allocation, then the contribution must be made not later than sixty (60) days from the date of the allocation. Documentation of the contribution must be received by the department within seventy-five (75) days from the date of the allocation or January 15^th of the following year, whichever occurs first. If the contribution is not made or the department does not receive documentation of the contribution within such time period, the allocation shall be cancelled and returned to the department for reallocation. Upon final documentation of the contributions, if the actual dollar amount of the contributions is lower than the amount estimated, the department shall adjust the tax credit allowed under this subsection.

(f) The aggregate amount of tax credits that may be allocated by the department under this subsection during a calendar year shall not exceed Five Million Dollars ($5,000,000.00).

(g) The department shall not allocate any credits under this subsection after January 1, 2025.

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, 2020.