House Bill 4032

AN ACT TO AUTHORIZE AN INCOME TAX CREDIT, INSURANCE PREMIUM TAX CREDIT AND AD VALOREM TAX CREDIT FOR VOLUNTARY CASH CONTRIBUTIONS BY CERTAIN TAXPAYERS TO CERTAIN ELIGIBLE HOSPITALS; TO PROVIDE THE CRITERIA THAT A HOSPITAL MUST MEET IN ORDER FOR A CONTRIBUTION TO THE HOSPITAL TO QUALIFY FOR THE TAX CREDIT AUTHORIZED BY THIS ACT; 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; 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 subsection unless the context clearly indicates otherwise:

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

(b) "Eligible hospital" means licensed Mississippi hospitals that provide short term acute care services, Critical Access Hospitals and other hospitals that have forty-nine (49) or fewer licensed inpatient beds and have an Emergency Department that provides emergency services twenty-four (24) hours a day for each day of a week. The term "eligible hospital" does not include hospitals that are owned by the State of Mississippi or the federal government.

In addition, in order to be an "eligible hospital", a hospital must engage, or have already engaged, a healthcare consulting firm with expertise and experience in operational and financial optimization of hospitals in the State of Mississippi. The consulting firm will advise and assist in developing an initial strategic plan for the hospital and in updating the strategic plan on at least an annual basis. As part of their engagement, the consulting firm will work with hospital leadership and provide input in helping to identify new service offering opportunities, improve or optimize existing service offerings, and to help identify opportunities for efficiency improvements and cost savings. A hospital also must engage or have already engaged a Certified Public Accountant (CPA) firm with expertise in healthcare and hospital reimbursement and cost reporting. The CPA firm will provide ongoing assistance in the form of reimbursement and cost reporting advisory services and assistance with preparation and filing of annual cost reports. A hospital must have a qualified CPA firm engaged for these services prior to qualifying as an eligible hospital.

(2) (a) The tax credit authorized in this section 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 section, 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 hospital. 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 hospital. The amount of credit that may be utilized by a taxpayer in a taxable year shall be limited to (i) 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 (ii) 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 section 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.

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

(3) A taxpayer taking a credit authorized by this section shall provide the name of the eligible hospital and the amount of the contribution to the department on forms provided by the department.

(4) To be considered an eligible hospital, a hospital shall provide the department with a written certification that it meets all criteria to be considered an eligible hospital. The hospital shall also notify the department of any changes that may affect eligibility under this section.

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

(a) Verification that the hospital meets the definition of eligible hospital under subsection (1)(b) of this section; and

(b) Any other information that the department requires to administer this section.

(6) The department shall review each written certification and determine whether the hospital meets all the criteria to be considered an eligible 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 hospitals.

(7) Tax credits authorized by this section 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.

(8) (a) 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 section 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 section.

(b) 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.

(9) For calendar year 2026, the aggregate amount of tax credits that may be allocated by the department under this section during the calendar year shall not exceed Eighteen Million Dollars ($18,000,000.00); for calendar year 2027, the aggregate amount of tax credits that may be allocated by the department under this section during the calendar year shall not exceed Twenty-four Million Dollars ($24,000,000.00); and for calendar year 2028, and for each calendar year thereafter, the aggregate amount of tax credits that may be allocated by the department under this section during a calendar year shall not exceed Thirty Million Dollars ($30,000,000.00). For calendar year 2026, for credits allocated during the calendar year for contributions to eligible hospitals, no more than Three Hundred Thousand Dollars ($300,000.00) of such credits may be allocated for contributions to a single eligible hospital for the same calendar year. For calendar year 2027, for credits allocated during the calendar year for contributions to eligible hospitals, no more than Four Hundred Thousand Dollars ($400,000.00) of such credits may be allocated for contributions to a single eligible hospital for the same calendar year. For calendar year 2028, and for each calendar year thereafter, for credits allocated during the calendar year for contributions to eligible hospitals, no more than Five Hundred Thousand Dollars ($500,000.00) of such credits may be allocated for contributions to a single eligible hospital for same calendar year.

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, 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 and 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 4. This act shall take effect and be in force from and after January 1, 2026.