MISSISSIPPI LEGISLATURE
2023 Regular Session
To: Finance
By: Senator(s) McDaniel
Senate Bill 2875
AN ACT TO AMEND SECTION 27-7-5, MISSISSIPPI CODE OF 1972, TO
PHASE OUT THE MISSISSIPPI STATE INCOME TAX BASED ON GENERAL FUND REVENUE COLLECTIONS;
AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section
27-7-5, Mississippi Code of 1972, is amended as follows:
[Until January 1 of
the next succeeding year after the date that the Commissioner of
Revenue certifies that the amount of the actual General Fund revenue collected
during the most recent fiscal year exceeds the amount of the actual General
Fund revenue for the most recent full fiscal year multiplied by the inflation factor
prescribed in subsection (1) of this section, this section shall read as
follows:]
27-7-5. (1) On or
before October 1, 2023, and on or before October 1 of each succeeding year, if
the amount of the actual General Fund revenue collected during the most recent
full fiscal year exceeds the amount of the actual General Fund revenue for the
previous full fiscal year multiplied by whichever is the lesser of 1.015 or the
inflation factor determined under this paragraph as calculated and certified by
the Commissioner of Revenue, the taxable rate on all wages or personal income
of natural persons in excess of Ten Thousand Dollars ($10,000.00) shall
decrease by one-half percent (.50%) effective for the taxable year that begins
on the following January 1. From and after January 1 of the succeeding year
for which the taxable rate is zero percent (0%), the personal income tax shall
stand repealed.
The inflation factor
shall be determined by dividing the CPI-U for the most recent full fiscal year
by the CPI-U for the fiscal year immediately preceding the most recent full
fiscal year. As used in this subsection (1), "CPI-U" means the
United States Consumer Price Index for All Urban Consumers, South Region as defined
and reported by the United States Department of Labor, Bureau of Labor
Statistics.
( * * *12) * * * (a) Except as otherwise provided in this section,
There is hereby assessed and levied, to be collected and paid as hereinafter provided,
for the calendar year 1983 and fiscal years ending during the calendar year 1983
and all taxable years thereafter, upon the entire net income of every resident individual,
corporation, association, trust or estate, in excess of the credits provided, a
tax at the following rates:
( * * *ia) * * * 1. Through calendar year 2017, on the first Five
Thousand Dollars ($5,000.00) of taxable income, or any part thereof, the rate shall
be three percent (3%);
* * *2.(b) For calendar year 2018, on the first
One Thousand Dollars ($1,000.00) of taxable income there shall be no tax levied,
and on the next Four Thousand Dollars ($4,000.00) of taxable income, or any part
thereof, the rate shall be three percent (3%);
* * *3.(c) For calendar year 2019, on the first
Two Thousand Dollars ($2,000.00) of taxable income there shall be no tax levied,
and on the next Three Thousand Dollars ($3,000.00) of taxable income, or any part
thereof, the rate shall be three percent (3%);
* * *4.(d) For calendar year 2020, on the first
Three Thousand Dollars ($3,000.00) of taxable income there shall be no tax levied,
and on the next Two Thousand Dollars ($2,000.00) of taxable income, or any part
thereof, the rate shall be three percent (3%);
* * *5.(e) For calendar year 2021, on the first
Four Thousand Dollars ($4,000.00) of taxable income there shall be no tax levied,
and on the next One Thousand Dollars ($1,000.00) of taxable income, or any part
thereof, the rate shall be three percent (3%);
* * *6.(f) For calendar year 2022 and all taxable
years thereafter, there shall be no tax levied on the first * * * Five Thousand Dollars ($5,000.00) Ten Thousand
Dollars ($10,000.00) of taxable income * * *;
(ii)
On taxable income in excess of Five Thousand Dollars ($5,000.00) up to and including
Ten Thousand Dollars ($10,000.00), or any part thereof, the rate shall be four percent
(4%); and
(iii).
On all taxable income in excess of Ten Thousand Dollars ($10,000.00), the rate shall
be five percent (5%).
* * * (b) (i) For calendar year 2023 and all calendar years thereafter,
there shall be no tax levied under subparagraph (ii) of paragraph (a) of this subsection
on the taxable income of individuals in excess of Five Thousand Dollars ($5,000.00)
up to and including Ten Thousand Dollars ($10,000.00), or any part thereof; and
(ii)
For calendar year 2024 and all calendar years thereafter, the tax imposed under
subparagraph (iii) of paragraph (a) of this subsection upon all taxable income of
individuals in excess of Ten Thousand Dollars ($10,000.00), shall be at the following
rates:
1.
For calendar year 2024, on such taxable income, the rate shall be four and seven‑tenths
percent (4.7%);
2.
For calendar year 2025, on such taxable income, the rate shall be four and four‑tenths
percent (4.4%); and
3.
For calendar year 2026 and all calendar years thereafter, on such taxable income,
the rate shall be four percent (4%).
It
is the intent of the Legislature that before calendar year 2026, the Legislature
will consider whether the revised tax rates
provided for in this subparagraph (ii) will be
further decreased for calendar years after calendar year 2026. If the revised tax rates provided for in this subparagraph
(ii) are further decreased for calendar years after calendar year 2026 to the extent
that there is no tax levied on the taxable income of individuals under this subparagraph
(ii), the individual income tax shall stand repealed.
( * * *23) An S corporation, as defined in Section
27-8-3(1)(g), shall not be subject to the income tax imposed under this section.
( * * *34) A like tax is hereby imposed to be assessed,
collected and paid annually, except as hereinafter provided, at the rate specified
in this section and as hereinafter provided, upon and with respect to the entire
net income, from all property owned or sold, and from every business, trade or occupation
carried on in this state by individuals, corporations, partnerships, trusts or estates,
not residents of the State of Mississippi.
( * * *45) In the case of taxpayers having a fiscal
year beginning in a calendar year with a rate in effect that is different than the
rate in effect for the next calendar year and ending in the next calendar year,
the tax due for that taxable year shall be determined by:
(a) Computing for the full
fiscal year the amount of tax that would be due under the rates in effect for the
calendar year in which the fiscal year begins; and
(b) Computing for the full
fiscal year the amount of tax that would be due under the rates in effect for the
calendar year in which the fiscal year ends; and
(c) Applying to the tax
computed under paragraph (a) the ratio which the number of months falling within
the earlier calendar year bears to the total number of months in the fiscal year;
and
(d) Applying to the tax
computed under paragraph (b) the ratio which the number of months falling within
the later calendar year bears to the total number of months within the fiscal year;
and
(e) Adding to the tax determined
under paragraph (c) the tax determined under paragraph (d) the sum of which shall
be the amount of tax due for the fiscal year.
[From and after
January 1 of the next succeeding year after the date that the
Commissioner of Revenue certifies that the amount of the actual General Fund
revenue collected during the most recent fiscal year exceeds the amount of the
actual General Fund revenue for the most recent full fiscal year multiplied by
the inflation factor prescribed in subsection (1) of this section, the
individual income tax shall stand repealed and this section shall read as
follows:]
27-7-5. * * * (1) (a) Except as otherwise provided in this section, there
is hereby assessed and levied, to be collected and paid as hereinafter provided,
for the calendar year 1983 and fiscal years ending during the calendar year 1983
and all taxable years thereafter, upon the entire net income of every resident individual,
corporation, association, trust or estate, in excess of the credits provided, a
tax at the following rates:
(i)
1. Through calendar year 2017, on the first Five Thousand Dollars ($5,000.00) of
taxable income, or any part thereof, the rate shall be three percent (3%);
2.
For calendar year 2018, on the first One Thousand Dollars ($1,000.00) of taxable
income there shall be no tax levied, and on the next Four Thousand Dollars ($4,000.00)
of taxable income, or any part thereof, the rate shall be three percent (3%);
3.
For calendar year 2019, on the first Two Thousand Dollars ($2,000.00) of taxable
income there shall be no tax levied, and on the next Three Thousand Dollars ($3,000.00)
of taxable income, or any part thereof, the rate shall be three percent (3%);
4.
For calendar year 2020, on the first Three Thousand Dollars ($3,000.00) of taxable
income there shall be no tax levied, and on the next Two Thousand Dollars ($2,000.00)
of taxable income, or any part thereof, the rate shall be three percent (3%);
5.
For calendar year 2021, on the first Four Thousand Dollars ($4,000.00) of taxable
income there shall be no tax levied, and on the next One Thousand Dollars ($1,000.00)
of taxable income, or any part thereof, the rate shall be three percent (3%);
6.
For calendar year 2022 and all taxable years thereafter, there shall be no tax levied
on the first Five Thousand Dollars ($5,000.00) of taxable income;
(ii)
On taxable income in excess of Five Thousand Dollars ($5,000.00) up to and including
Ten Thousand Dollars ($10,000.00), or any part thereof, the rate shall be four percent
(4%); and
(iii)
On all taxable income in excess of Ten Thousand Dollars ($10,000.00), the rate shall
be five percent (5%).
(b)
(i) For calendar year 2023 and all calendar years thereafter, there shall be no
tax levied under subparagraph (ii) of paragraph (a) of this subsection on the taxable
income of individuals in excess of Five Thousand Dollars ($5,000.00) up to and including
Ten Thousand Dollars ($10,000.00), or any part thereof; and
(ii)
For calendar year 2024 and all calendar years thereafter, the tax imposed under
subparagraph (iii) of paragraph (a) of this subsection upon all taxable income of
individuals in excess of Ten Thousand Dollars ($10,000.00), shall be at the following
rates:
1.
For calendar year 2024, on such taxable income, the rate shall be four and seven‑tenths
percent (4.7%);
2.
For calendar year 2025, on such taxable income, the rate shall be four and four‑tenths
percent (4.4%); and
3.
For calendar year 2026 and all calendar years thereafter, on such taxable income,
the rate shall be four percent (4%).
It
is the intent of the Legislature that before calendar year 2026, the Legislature
will consider whether the revised tax rates
provided for in this subparagraph (ii) will be
further decreased for calendar years after calendar year 2026. If the revised tax rates provided for in this subparagraph
(ii) are further decreased for calendar years after calendar year 2026 to the extent
that there is no tax levied on the taxable income of individuals under this subparagraph
(ii), the individual income tax shall stand repealed.
(2)
An S corporation, as defined in Section 27‑8‑3(1)(g), shall not be subject
to the income tax imposed under this section.
(3)
A like tax is hereby imposed to be assessed, collected and paid annually, except
as hereinafter provided, at the rate specified in this section and as hereinafter
provided, upon and with respect to the entire net income, from all property owned
or sold, and from every business, trade or occupation carried on in this state by
individuals, corporations, partnerships, trusts or estates, not residents of the
State of Mississippi.
(4)
In the case of taxpayers having a fiscal year beginning in a calendar year with
a rate in effect that is different than the rate in effect for the next calendar
year and ending in the next calendar year, the tax due for that taxable year shall
be determined by:
(a)
Computing for the full fiscal year the amount of tax that would be due under the
rates in effect for the calendar year in which the fiscal year begins; and
(b)
Computing for the full fiscal year the amount of tax that would be due under the
rates in effect for the calendar year in which the fiscal year ends; and
(c)
Applying to the tax computed under paragraph (a) the ratio which the number of months
falling within the earlier calendar year bears to the total number of months in
the fiscal year; and
(d)
Applying to the tax computed under paragraph (b) the ratio which the number of months
falling within the later calendar year bears to the total number of months within
the fiscal year; and
(e)
Adding to the tax determined under paragraph (c) the tax determined under paragraph
(d) the sum of which shall be the amount of tax due for the fiscal year.
[Deleted]
SECTION 2. This act
shall take effect and be in force from and after July 1, 2023.