House Bill 1986

AN ACT TO AMEND SECTION 27-7-22.48, MISSISSIPPI CODE OF 1972, WHICH AUTHORIZES AN INCOME TAX CREDIT, INSURANCE PREMIUM TAX CREDIT AND AD VALOREM TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS MADE BY TAXPAYERS TO CERTAIN ELIGIBLE CHARITABLE ORGANIZATIONS THAT CONTRACT OR MAKE OTHER AGREEMENTS OR ARRANGEMENTS WITH HEALTH CARE PERSONNEL TO PROVIDE HEALTH CARE SERVICES TO LOW-INCOME RESIDENTS OF THIS STATE, TO REVISE THE DEFINITION OF THE TERM "ELIGIBLE CHARITABLE ORGANIZATION"; TO PROVIDE THAT A TAXPAYER WHO IS ALLOCATED A TAX CREDIT DURING A CALENDAR MAY USE THE CREDIT AGAINST INCOME TAXES AND INSURANCE PREMIUM TAXES IMPOSED FOR THE IMMEDIATELY PRECEDING TAXABLE YEAR, PROVIDED THAT THE TAXPAYER HAS NOT ALREADY FILED A RETURN FOR SUCH TAXES; TO PROVIDE THAT TAX CREDITS THAT WERE NOT ALLOCATED DURING CALENDAR YEAR 2023, MAY BE ALLOCATED DURING CALENDAR 2024; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 27-7-22.48, Mississippi Code of 1972, is amended as follows:

27-7-22.48. (1) (a) 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:

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

(ii) "Eligible charitable organization" means an organization that is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code and spends at least

fifty percent (50%) of its * * *~~budget~~ payroll on contracting or making other agreements or arrangements with physicians * * *~~and/or~~, physician assistants, advanced practice registered nurses, nurse practitioners, registered nurses, or other direct-patient care staff, to provide health care services to low-income residents of this state including those who are mothers and to their households.

"Eligible charitable organization" does not include any entity that provides, pays for or provides coverage of abortions or that financially supports any other entity that provides, pays for or provides coverage of abortions.

(iii) "Low-income residents" means persons whose household income does not exceed one hundred eighty-five percent (185%) of the federal poverty level converted to a modified adjusted gross income equivalent standard.

(iv) "Nurse practitioner" means a nurse practitioner certified under Section 73-15-20, Mississippi Code of 1972.

(v) "Physician" means an individual licensed to practice medicine or osteopathic medicine under Section 73-25-1 et seq., Mississippi Code of 1972.

(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 Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123, for voluntary cash contributions made by a taxpayer during the taxable year to an eligible charitable organization. A credit is also allowed against ad valorem taxes assessed and levied on real property for voluntary cash contributions made by the taxpayer during the taxable year to an eligible charitable organization. The amount of credit that may be utilized by a taxpayer in a taxable year shall be limited to an amount not to exceed fifty percent (50%) of the total tax liability of the taxpayer for the taxes imposed by such sections of law and an amount not to exceed fifty percent (50%) of the total tax liability of the taxpayer for ad valorem taxes assessed and levied on real property. Subject to such limitation on the amount of credit that a taxpayer may utilize in a taxable year, a taxpayer who is allocated a tax credit under this subsection during a calendar year may utilize the credit against the taxes imposed by Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123 for the immediately preceding taxable year, provided that the taxpayer has not already filed an annual return for such taxes. 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 tax year in which the credits were earned.

(ii) A contribution to an eligible charitable organization 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 (3) 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) Taxpayers taking a credit authorized by this subsection shall provide the name of the eligible charitable organization and the amount of the contribution to the department on forms provided by the department.

(c) An eligible charitable organization shall provide the department with a written certification that it meets all criteria to be considered an eligible charitable organization. The organization shall also notify the department of any changes that may affect eligibility under this subsection.

(d) The eligible charitable organization's written certification must be signed by an officer of the organization under penalty of perjury. The written certification shall include the following:

(i) Verification of the organization's status under Section 501(c)(3) of the Internal Revenue Code;

(ii) A statement that the organization does not provide, pay for or provide coverage of abortions and does not financially support any other entity that provides, pays for or provides coverage of abortions;

(iii) Any other information that the department requires to administer this subsection.

(e) The department shall review each written certification and determine whether the organization meets all the criteria to be considered an eligible charitable organization and notify the organization of its determination. The department may also periodically request recertification from the organization. The department shall compile and make available to the public a list of eligible charitable organizations.

(f) 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.

(g) (i) 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. If the contribution is not made 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.

(ii) For the purposes of using a tax credit against ad valorem taxes assessed and levied on real property, a taxpayer shall present to the appropriate tax collector the tax credit documentation provided to the taxpayer by the Department of Revenue, and the tax collector shall apply the tax credit against such ad valorem taxes. The tax collector shall forward the tax credit documentation to the Department of Revenue along with the amount of the tax credit applied against ad valorem taxes, and the department shall disburse funds to the tax collector for the amount of the tax credit applied against ad valorem taxes. Such payments by the Department of Revenue shall be made from current tax collections.

(h) The aggregate amount of tax credits that may be allocated by the department under this subsection during a calendar year shall not exceed Three Million Dollars ($3,000,000.00). In addition, the amount of any tax credits that were not allocated by the department under this subsection during calendar year 2023, may be allocated during calendar 2024.

(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 by an individual taxpayer during the taxable year to an eligible charitable organization. A credit is also allowed against ad valorem taxes assessed and levied on real property for voluntary cash contributions made by the taxpayer during the taxable year to an eligible charitable organization. The amount of credit that may be utilized by a taxpayer in a taxable year shall be limited to an amount not to exceed fifty percent (50%) of the total tax liability of the taxpayer for the taxes imposed by this chapter and an amount not to exceed fifty percent (50%) of the total tax liability of the taxpayer for ad valorem taxes assessed and levied on real property. Subject to such limitation on the amount of credit that a taxpayer may utilize in a taxable year, a taxpayer who is allocated a tax credit under this subsection during a calendar may utilize the credit against the taxes imposed by this chapter for the immediately preceding taxable year, provided that the taxpayer has not already filed an annual return for such taxes. 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 tax year in which the credits were earned.

(ii) 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.

(iii) A contribution to an eligible charitable organization 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.

(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.

(d) The eligible charitable organization's written certification must be signed by an officer of the organization under penalty of perjury. The written certification shall include the following:

(i) Verification of the organization's status under Section 501(c)(3) of the Internal Revenue Code;

(iii) Any other information that the department requires to administer this subsection.

(f) (i) 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. If the contribution is not made 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 One Million Dollars ($1,000,000.00). In addition, the amount of any tax credits that were not allocated by the department under this subsection during calendar year 2023, may be allocated during calendar 2024.

SECTION 2. 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, insurance premium tax laws or ad valorem 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, insurance premium tax laws or ad valorem 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 3. This act shall take effect and be in force from and after January 1, 2024.