TABLE OF CONTENTS
GENERAL INFORMATION AND INSTRUCTIONS 3
WHAT’S NEW! 3
WHO MUST FILE 4
DEFINITIONS 4
TERMINATION OF S CORPORATION ELECTION 5
TIME AND PLACE FOR FILING 5
ELECTRONIC FILING 5
TAXPAYER ACCESS POINT (TAP) 5
WHO MUST SIGN 5
REQUIRED FORMS AND SCHEDULES 5
TAX PAYMENTS 6
ESTIMATED TAX PAYMENTS 7
INTEREST AND PENALTY PROVISIONS 7
ACCOUNTING METHODS 7
ACCOUNTING PERIOD 7
ROUND TO THE NEAREST DOLLAR 7
RECORDKEEPING 7
TAX RATES 7
AMENDED RETURN 7
TREATMENT OF DISREGARDED ENTITIES 8
FRANCHISE TAX (S CORPORATIONS) 9
INCOME TAX 10
INSTALLMENT SALES 10
INTANGIBLE AND INTEREST EXPENSES 10
ARMS-LENGTH TRANSACTIONS 10
LONG TERM CAPITAL GAINS FROM SALES OF STOCK 10
EXTRATERRITORIAL INCOME 10
APPORTIONMENT/ALLOCATION 10
NET OPERATING LOSS (NOL) 11
PRODUCERS OF MINERAL OR NATURAL RESOURCE PRODUCTS 11
UNRELATED BUSINESS TAXABLE INCOME – EXEMPT ORGANIZATIONS 11
INCENTIVE CREDITS AND EXEMPTIONS 12
SPECIFIC INSTRUCTIONS 16
FORM 84-105 16
FORM 84-122 17
FORM 84-131 19
FORM 84-132 19
FORM 84-150 20
FORM 84-155 21
FORM 83-305 21
COMPOSITE FILING 2
2
DISTRICT OFFICES 25
APPENDIX 26
TAX CREDIT CODES 2
7
3
GENERAL INFORMATION AND
INSTRUCTIONS
Important tips to help expedite processing of your return:
Use black ink when preparing the return.
To indicate a loss (negative income), use
brackets around the dollar amount.
Attach a copy of the federal return behind the state
return including returns filed electronically. Combined
filers must attach the consolidated Federal Form
1120 (pages 1-5), Schedule M-3 and a complete
Pro-Forma Federal Return.
Additional schedules and attachments should
be stapled to the return.
Visit our website at www.dor.ms.gov to download forms by
tax year and tax type.
TAXPAYER ACCESS POINT (TAP)
Remember, TAP is:
• Easy to use
• Convenient
• Free
Go Paperless!
With TAP, you have the option to Go Paperless. This
means that you can pay your taxes online and receive
certain correspondence electronically.
TAP email lets you know that you have new
correspondence to view online. You then logon to TAP to
read the letter or message and take appropriate action on
your account. Only you or persons you authorize can see
your correspondence.
When making payments or updating profile information,
you should always log directly into TAP using your User ID
and password. TAP does not provide links containing your
transaction or personal information to any external website.
Remember, you can pay your bill online through TAP
without registering for a TAP account. For more
information on TAP, view the Electronic Filing Section of
this booklet.
House Bill 1296 (2021 Legislative Session) – Miss. Code
Ann. §27-7-22.31
Amended Miss. Code Ann. §22-7-22.31 to remove the
provision that excludes single-family dwellings from the
definition of the term “eligible property”; to revise the
provisions under which a taxpayer eligible for a tax credit
may claim the tax credit in phases; to remove the option,
in lieu of the ten-year carryforward, of a refund paid over a
two-year period in the amount of 75% of the excess credit;
to allow the option, in lieu of claiming the credit, of a rebate
of 75% of the amount that would be eligible to claim as a
credit; to provide that the rebate shall be subject to
approval by the Department of Archives and History and
shall be redeemed with the Department of Revenue for an
immediate cash payment; to provide that the Department
of Archives and History shall not issue certificates evidencing the
eligible rebate or credit which will result in credits being
awarded in excess of $12,000,000 in any one state calendar
year for projects with total qualified rehabilitation costs and
expenses of $1,750,000.00 or more; to provide that the
Department of Archives and History shall not issue certificates
evidencing the eligible rebate or credit which will result in credits
being awarded in excess of $12,000,000.00 in any one state
calendar year for projects with total qualified rehabilitation costs
and expenses of less than $1,750,000.00; to provide that a
taxpayer claiming a credit instead of a rebate shall claim the
credit on the income tax return for the tax year for which the
credit is certified; to provide the order in which a rebate or credit
shall be certified.
House Bill 1356 (2021 Legislative Session) – Miss. Code
Ann. §27-7-17
Amended Miss. Code Ann. §27-7-17 to provide that for the state
income tax deduction authorized for depreciation, in the case of
new or used aircraft, equipment, engines, or other parts and
tools used for aviation, the allowance for bonus depreciation
conforms with the federal bonus depreciation rates and
reasonable allowance for depreciation is no less than one
hundred percent.
House Bill 1446 (2021 Legislative Session) - Miss. Code
Ann. §57-121-7
Amended Miss. Code Ann. §57-121-7 to allow an income tax
deduction for otherwise deductible expenses if the payment for
such expenses is made with the grant or loan program of the
Paycheck Protection Program as authorized under the
Coronavirus Aid, Relief and Economic Security (CARES) Act
and the Consolidated Appropriations Act of 2021, the COVID-
19 Economic Injury Disaster Loan Program, the 2020 COVID-
19 Mississippi Business Assistance Act and/or the Rental
Assistance Grant Program, and such expenses are allowed as
deductions for federal income tax purposes.
Senate Bill 2832 (2021 Legislative Session) – Miss. Code
Ann. §27-7-22.36
Amended Miss. Code Ann. §27-7-22.36 to extend the repeal
date of the upholstered household furniture manufacturing job
tax credit from January 1, 2022, to January 1, 2026.
Senate Bill 2858 (2016 Legislative Session) - Miss. Code
Ann. §27-7-5 and §27-7-18
Beginning with tax year 2018, the 3% tax rate on corporate
income tax will be phased out over a five-year period ending
with tax year 2022 as follows:
Tax Year 2018
First $1,000 @ 0% and the next
$4,000 @ 3%
Tax Year 2019
First $2,000 @ 0% and the next
$3,000 @ 3%
Tax Year 2020
First $3,000 @ 0% and the next
$2,000 @ 3%
Tax Year 2021
First $4,000 @ 0% and the next
$1,000 @ 3%
Tax Year 2022
First $5,000 @ 0%
Senate Bill 2858 (2016 Legislative Session) - Miss. Code
Ann. §27-13-1, §27-13-5, §27-13-7 and §27-13-67
Beginning with tax year 2018, the franchise tax will be
4
completely phased out over a nine-year period ending with tax
year 2027 as follows:
Tax Cuts and Jobs Act (TCJA)
Mississippi will follow the federal TCJA changes listed below:
• Section 179 expensing amounts increased from $500,000
to $1,000,000.
• The change in accounting method allowed for taxpayers
with average gross receipts of less than $25 million for the
previous years to elect to use the cash method of
accounting. A copy of the federal Form 3115 is required to
be attached to the Mississippi income tax return.
• The deduction for entertainment, amusement and
recreation expenses when directly related to a taxpayer’s
trade or business is eliminated. Mississippi will also follow
the other TCJA provisions related to food and beverage
expenses, transportation fringe benefits, fines, penalties
and research and experimental expenditures.
• IRC Section 1031 like-kind exchange of property will apply
to real property not held primarily for sale and Mississippi
personal property per Miss. Code Ann. §27-7- 9(f)(1)(A).
• Contractors with average gross receipts less than $25
million for the previous three (3) tax years are exempt from
the requirement to use the percentage of completion for
contracts to be completed within two (2) years. Taxpayer
will be allowed to use the completed contract method.
S Corporation
Every S corporation domesticated or qualified to do business in
Mississippi, and every S corporation engaged in business in
Mississippi or having sources of income from Mississippi
must file a return even if the corporation is inactive or not
otherwise engaged in business. Such corporation will remain
subject to the filing requirements until the corporation is officially
dissolved or withdrawn through the Office of the Mississippi
Secretary of State.
Foreign S corporations engaged in business in Mississippi or
having sources of income in this state although not qualified to
transact business in this state through the Office of the
Secretary of State are subject to the measure of the franchise
tax levy.
Partnership
Every partnership, LLC, or LLP, domestic or foreign, deriving
income from property owned within the State of Mississippi or
business, trade, profession or occupation carried on within the
state must file a return.
Exempt Organization
Every exempt corporate organization as described in Miss.
Code Ann. §27-7-27 or §27-7-29 and not otherwise exempt
from the income tax levy is required to make a corporate tax
filing if they have Mississippi unrelated business taxable
income. Refer to the “Unrelated Business Taxable Income of
Exempt Organizations” section of this booklet for more
information.
S Corporation
"S corporation" means a corporation for which a valid election
under section 1372(a) of the Internal Revenue Code is in effect.
A corporation must file Form 84-105 if (a) it elected to be an S
corporation by filing Federal Form 2553, (b) the IRS accepted
the election, and (c) the election remains in effect. Do not file
Form 84-105 until the corporation has been notified by the IRS
that the federal election has been accepted.
An S corporation is not subject to income tax imposed by Miss.
Code Ann. §27-7-5 but may be subject to withholding
requirements as explained under the “Tax Payments” section
of this booklet. Also, every S corporation domesticated or
qualified to do business in Mississippi is subject to the measure
of the franchise tax levy.
Partnership
The term "partnership" includes a syndicate, group, pool, joint
venture or other unincorporated organization through or by
means of which any business, financial operation or venture is
carried on, and which is not within the meaning of a corporation,
trust or estate.
A domestic or foreign limited liability company (LLC) is
classified as an entity for purposes of Mississippi income tax
laws in the same manner as the entity is classified for federal
income tax purposes. If an LLC is treated as a partnership for
federal income tax purposes, it will file as a partnership for
Mississippi purposes. If an LLC is treated as a corporation for
federal income tax purposes, it will file as a corporation for
Mississippi income and franchise tax purposes.
In this booklet, all three entities (partnership, LLC, and LLP)
may, at times, be referred to as "partnerships" and
partners/members referred to as "partners".
Tax Year 2018
$2.50 per $1,000 of capital in excess of
$100,000
Tax Year 2019
$2.25 per $1,000 of capital in excess of
$100,000
Tax Year 2020
$2.00 per $1,000 of capital in excess of
$100,000
Tax Year 2021
$1.75 per $1,000 of capital in excess of
$100,000
Tax Year 2022
$1.50 per $1,000 of capital in excess of
$100,000
Tax Year 2023
$1.25 per $1,000 of capital in excess of
$100,000
Tax Year 2024
$1.00 per $1,000 of capital in excess of
$100,000
Tax Year 2025
$0.75 per $1,000 of capital in excess of
$100,000
Tax Year 2026
$0.50 per $1,000 of capital in excess of
$100,000
Tax Year 2027
$0.25 per $1,000 of capital in excess of
$100,000
Tax Year 2028
Franchise tax repealed effective January
1, 2028
5
Once the election is made to be treated as an S corporation,
it stays in effect until it is terminated. Mississippi considers
the election to be terminated at such time as the election is
considered terminated for federal purposes.
S Corporation
The Mississippi Pass-Through Entity Tax Return must be
filed on or before the 15th day of the 3rd month following the
close of the accounting year. If the due date falls on a
Saturday, Sunday or legal holiday, the return is due the next
business day. A business day is any day that is not a
Saturday, Sunday or legal holiday.
If the S election was terminated during the tax year, the due
date of Form 84-105 is on or before the 15th day of the 3rd
month following the date of termination.
Partnership
Calendar year partnerships, LLCs and LLPs must file no later
than March 15th annually. Fiscal year partnerships, LLCs
and LLPs must file no later than the 15th day of the 3rd
month following the end of the fiscal year.
Extension of Time to File Return
Mississippi will follow federal return filing and extended due
dates. Taxpayers requesting an extension of time to file the
return must remit the tax due with Form 83-180, on or before
the due date of the return. The authorized extension of time
to file does not extend the time for payment of the income or
franchise tax due. Interest and penalty will apply on any
underpayment of tax.
The return should be mailed to:
Department of Revenue Street Address:
P.O. Box 23191 500 Clinton Center Drive
Jackson, MS 39225-3191 Clinton, MS 39056
Pursuant to the authority granted to the Department of
Revenue in Miss Code Ann Section 27-3-83 and Title 35, Part
I, Chapter 4 of the Mississippi Administrative Procedures and
Procedures Code, the Department of Revenue will mandate
all Corporations, S corporations, and Partnerships with assets
of $250,000 or more to file electronically for tax years
beginning on or after January 1, 2019 and all subsequent tax
years.
Failure to file returns electronically may subject taxpayers to a
penalty of twenty-five dollars ($25.00) for the first instance of
noncompliance and five hundred dollars ($500.00) for each
additional instance of noncompliance.
Please contact the Department of Revenue at (601) 972-7700
if you are unable to comply with this mandate.
TAP provides online access to your tax account information
24 hours a day, 7 days a week. TAP is free and convenient!
Users of TAP are able to:
• make electronic payments of returns and assessments;
• view previously filed returns and amended returns;
• make address changes and view tax correspondence;
• view recent account activity, and;
• register a new business or add accounts to the business;
Third Party Access for Tax Practitioners
Tax practitioners can have TAP access to account information
for each of your clients - from one login. First, create your own
TAP account (only one per FEIN). Once you are registered in
TAP, select "Add Access to Existing Account." Your client
(taxpayer) must provide you the Letter ID and Account ID in
order for you to have access to their accounts. All accounts
you set up for third party access are found under the "Other
Taxpayers' Accounts" tab in TAP. For more information on
TAP, visit our website at www.dor.ms.gov.
Users cannot file Pass-Through Entity Tax Returns in TAP.
However, tax preparers have the ability to file the tax returns
electronically through an authorized software provider. A copy
of the complete federal return must be submitted electronically.
Please visit our website at
www.dor.ms.gov for additional
information on how to file Mississippi returns on-line and how
to access approved on-line software providers.
S Corporation
The return must be signed by the president, vice president or
other officer of the corporation. A receiver, trustee or assignee
must sign any return which he/she is required to file on behalf
of a corporation.
Partnership
The return must be signed by one general partner or limited
liability company member. If a receiver, trustee in bankruptcy,
or assignee controls the organization's property or business,
that person must sign the return.
Anyone who prepares the return but does not charge the
company should not complete the paid preparer section.
Generally, anyone who is paid to prepare the return must
legibly sign it and must also furnish the preparer tax
identification number (PTIN) issued by the Internal Revenue
Service (IRS).
To be a complete return, the return should contain all the
requisite general information, as well as, all summary tax
information and the basic back up schedules. Examples of the
required general information are complete name, current
address, FEIN, officer information and signature and other
information relating to the filing entity as requested on page 2
of Form 84-105.
TAXPAYER ACCESS POINT (TAP)
TIME AND PLACE FOR FILING
6
Examples of the summary tax information are the front page
of the return, the franchise tax schedule, the computation of net
income, the computation of the apportionment factor (if
applicable), the balance sheet, nonbusiness income schedule
(if applicable), the direct accounting income statement (if
applicable), schedules showing the computation of any tax
credit taken (such as jobs credit) and the Schedule K reflecting
information pertaining to shareholders' distributive shares of
income and deductions.
Examples of the basic backup schedules are details of other
additions or other deductions as requested on the computation
of net income schedule, details of other additions or other
deductions as requested on other statements made a part of
the return, details of other current assets and other assets, and
details of other current liabilities and other liabilities on the
balance sheet as are normally included with the federal return.
The total tax due on the return must be paid in full no later than
the 15
th
day of the 3rd month after the end of the tax year (S
Corporation and Partnership).
Payment Options:
• Online Payments: To pay online, go to www.dor.ms.gov,
click on Taxpayer Access Point (TAP) and follow the
instructions. Without a MARS account or a TAP login,
users are able to make estimate payments online.
• Check or Money Order Payments: To pay by check or
money order, complete the payment voucher (Form
84300), make the check or money order payable to the
Department of Revenue and mail both to P.O. Box 23192
Jackson, MS 39225-3192.
Pass-Through Entities do not pay tax on its income but
"passes through" any profits (losses) to its
shareholders/partners (owners). Owners must include pass
through items on their income tax returns. Individual owners
are subject to tax upon their distributive share of pass-through
entity net income, whether it is distributed to them or not. A
non-resident individual, who is a member of a pass-through
entity owning property or doing business in the State of
Mississippi, is subject to tax on his share of the pass-through
entity net income, whether distributed or not.
If the pass-through entity does business both within and
without the state, it will be necessary to compute the income
(loss) of the pass-through entity from sources within the state
in order to determine the amount of income taxable to, or the
amount of the loss deductible by, the non-resident owners.
The non-resident shareholder/partner is subject to tax only on
such share of his income, whether or not distributed, as is
assignable to Mississippi.
S Corporation
An S corporation may elect to file a composite return and make
composite payments of tax on behalf of some of its non-
resident shareholders. In general, any non-resident individual
may elect to be included in a composite filing. For more
information on filing a composite, see the Composite Filing
Section of this booklet. If a non-resident is going to file a
Mississippi non-resident individual tax return he or she
must not be included in a composite return, but should
separately pay estimated taxes as an individual using
Form 80-106.
Non-Resident Income Tax Agreement
All non-resident shareholders of Mississippi S corporations are
required to execute an agreement (a) to file a return and to
make timely payment of all taxes imposed on the shareholder
by the state of Mississippi with respect to the income of the S
corporation, and (b) to be subject to personal jurisdiction in this
state for purposes of the collection of income taxes, together
with related interest and penalties, imposed on the shareholder
by this state with respect to the income of the S corporation.
Form 84-380 should be filed with the S corporation and
maintained by the S corporation as a part of its permanent tax
files. This form should not be sent with the pass-through entity
return.
In the event the S corporation fails to obtain the agreement of
a non-resident shareholder indicated above or in the event a
non-resident shareholder fails to file a return and to make timely
payments of all taxes imposed on the shareholder by this state,
the S corporation shall make a payment to the state in an
amount equal to the highest marginal tax rate in effect under
Miss. Code Ann. §27-7-5 (5%) multiplied by the shareholder's
pro rata share of the income attributable to the state reflected
on the corporation's return for the taxable period.
Partnership
In the event the individual partners fail to report and pay the
taxes imposed according to Miss. Code Ann. § 27-7-25, the
partnership and the general partners shall be jointly and
severally liable for said tax liability and shall be assessed
accordingly. However, the partnership and/or general partners
shall not be liable if the partnership withholds 5% of the net gain
or profit of the partnership for the tax year and remits the same
to the Commissioner.
In a sale of real property and associated tangible personal
property which is not considered an exchange or trade of such
property and which results in gross proceed greater than
$100,000.00 paid by the buyer to the seller and owned by an
non-resident, the seller, rather than the buyer, shall be
responsible for paying over to the Department of Revenue an
amount equal to 5% of the amount realized by the seller.
Partnerships electing to report tax on partnership net income in
this manner should request Form 84-387. Partners with tax
remitted to the Department of Revenue through partnership
withholding should claim the amount as estimated tax on his or
her individual income tax return. Form 84-387 should be
provided to the partner by the partnership showing the correct
amount withheld.
A partnership that has income from sources within and without
Mississippi should withhold from Mississippi source income
only. The Commissioner may allow composite return filing by
a partnership. See the “Composite Filing” section of this
booklet for additional information.
7
Every taxpayer, filing a composite return, with an annual income
tax liability in excess of $200 must make estimated tax
payments. At least 90% of the current income tax liability of the
S Corporation filing a composite return must be paid by
submitting quarterly payments. The remaining of the balance is
due by the due date of the return. Partnerships filing composite
returns must follow the Individual tax rules on estimated tax
payments. The due dates for estimated tax payments are:
• 15
th
day of the 4
th
month after year end;
• 15
th
day of the 6
th
month after year end;
• 15
th
day of the 9
th
month after year end, and;
• 15
th
day of the 12
th
month after year end.
The payment is due on the next business day if the date falls
on a Saturday, Sunday or legal holiday. Penalties may apply if
the corporation does not make the required estimated tax
payments by the due date. Use Form 83-305 to determine the
amount of interest and penalty on underestimate. See detailed
instructions for the form under the “Specific Instructions” for
Form 83-305 section of this booklet.
• Late Payment: Interest and penalty are charged on taxes
paid late even if an extension of time to file is granted. The
interest is assessed from the due date until paid and is
computed at 1
/2 of 1% per month.
The penalty imposed for failure to pay the tax when due is
1/2% per month not to exceed 25% in the aggregate.
• Late or Non-Filer: Penalties are imposed for failure to file
a return when due on the total amount of the tax deficiency
or delinquency. The penalty is 5% per month not to exceed
25% in the aggregate. The penalty shall not be less than
$100 for income tax for failure to file a return.
• Incomplete Returns: A company that does not file a
complete return or does not file a return within the
prescribed time may be subject to a penalty of $25 per
required attachment or schedule up to a maximum o f $500
per return.
The purpose of this penalty provision is to ensure that sufficient
information is disclosed on the return. If major schedules (such
as the balance sheet) are omitted or incomplete, or if schedules
are consistently omitted or incomplete, then the penalty will be
imposed. The more severe or consistent the omission, the more
likely it is that the penalty will be imposed. Refer to the “Required
Forms and Schedules” section of this booklet for additional
information on what constitute a complete return.
Direct or Separate Accounting Method: Producers of mineral
or natural resource products and construction contractors are
required to use direct accounting in computing their taxable
income to this state. For more details, see Title 35, Part III,
Subpart 08, Chapter 06 of the Miss Administrative Code. Other
taxpayers may not employ a direct accounting or separate
accounting method unless they have obtained written authority
from the Commissioner to do so. Refer to the Producers of Mineral
or Natural Resource Products Section of this booklet for additional
information.
Returns should be filed on the basis of the 12-month accounting
period established by the corporation. A corporation on a fiscal
year basis must enter the beginning and ending dates of the
taxable year in the appropriate spaces on the return. No
accounting period, other than calendar year, will be recognized,
unless before its close it was definitely established as an
accounting period by the taxpayer and the books of such
taxpayer were kept in accordance therewith.
All dollar amounts should be rounded to the nearest whole
dollar (no pennies). Round down to the next lower dollar
amounts under $.50 and round up to the next higher dollar
amounts of $.50 and over. For example: $2.15 becomes $2.00;
$4.75 becomes $5.00; and $3.50 becomes $4.00.
Taxpayers are required to maintain an accurate and complete
set of records and other information necessary for the
Department to determine the correct amount of tax due. The
records and other information must be available for inspection
by the Department upon request at a reasonable time and
location. Refusal or delay by the taxpayer to provide
documentation upon the Department’s request will result in an
assessment being made from any information available, which
shall be prima facie correct.
Franchise Tax (S Corporation): $1.75 per $1,000 of capital,
or fractional part thereof, of capital, surplus, undivided profits
and true reserves employed in Mississippi in excess of
$100,000 (Minimum tax of $25).
Income Tax (Composite): 0% on the first $4,000 of taxable
income and 3% on the next $1,000, 4% on the next $5,000 of
taxable income and 5% on all taxable income in excess of
$10,000.
File an amended return to:
• make adjustments to tax;
• claim a refund due to an adjustment to tax;
8
• claim a net operating loss (NOL) carryback deduction;
• report federal adjustments (1120X), and;
• report IRS audit adjustments (RAR).
When to File: A taxpayer may apply to the Department for
revision of any return filed at any time within 3 years of the due
date; or, if an extension was granted, 3 years from the date the
return was filed. The 3 year period is not applicable to an IRS
audit; however, no additional assessment or refund will be made
more than 3 years after the date the IRS disposes of the tax
liability in question.
Net Operating Loss (NOL): Form 84-155 must be filed with an
amended return in order to claim a net operating loss deduction.
Form 84-155 is used to make an irrevocable election to
carryback or carryforward the current year NOL. For more
information concerning net operating losses, see the “Net
Operating Loss (NOL)” section of this booklet.
Internal Revenue Service Audit (RAR): To document
adjustments made as a result of an IRS audit, the Revenue
Agent Report should be attached to the Mississippi amended
return.
Amended Federal: To document adjustments made as a result
of an amended federal return, a copy of the amended federal
(Form 1120X) should be attached to the amended Mississippi
return.
Any other documentation supporting the adjustments made
should also be included with the amended Mississippi return.
Attach a copy of the original filed return. Overpayments that are
not refunded will be applied to the next period for which the
corporation makes a filing.
Treatment of A QSSS and Its Owner: A federal election to be
treated as a Qualified Subchapter S Subsidiary (QSSS) is
considered an election for state purposes and as such the QSSS
will be treated the same for state income and franchise tax
purposes. Thus the QSSS’s activity is treated as a division of its
parent S corporation for federal income tax purposes and
will be treated in the same manner for state income and
franchise tax purposes.
A parent S corporation that is required to file and report for
federal income tax purposes on the activity conducted in
Mississippi by its QSSS is considered doing business in
Mississippi for both income and franchise tax purposes and
shall include the activity of the QSSS when making income and
franchise tax return filings to this state. The QSSS will not
make separate return filings. Attach a copy of the
approved federal QSSS election when filing the parent S
corporation return.
S corporations that do not have a QSSS election in effect will
make return filings in the same manner as any other S
corporation. An S corporation is subject to the franchise tax and
must compute its Mississippi income. Unless a composite
return election is in effect, each shareholder will make a filing
to this state reporting its Mississippi taxable income and, if a
corporation, will make at least the minimum franchise tax
payment.
Treatment of a SMLLC and Its Owner: A Single Member
Limited Liability Company (SMLLC) that is disregarded for
federal reporting purposes will, likewise, be disregarded for
state reporting purposes.
The SMLLC’s activity in this state will be reported by the owner
of the SMLLC when making its return filings. A corporate owner
of an SMLLC will make income and franchise tax return filings
based on its activities and the activities of any disregarded
entities. If the owner of the SMLLC is itself an SMLLC or other
type of disregarded entity, then such amounts will be reported
by the ultimate owners which are not disregarded entities.
9
FRANCHISE TAX (S CORPORATIONS)
The franchise tax is measured by the value of capital used,
invested or employed in the exercise of any power, privilege or
right enjoyed by the corporation within Mississippi. The mode
of measurement is the amount of capital of the corporation
employed or so situated as to be privileged to be employed in
this state. In determining the amount of capital, the net book
value as regularly employed in conducting the affairs of the
corporation should be accepted as prima facie correct as to
the true capital of the corporation, except where the
Commissioner determines that the book value does not
properly reflect capital employed in this state and in that
situation the Commissioner's determination of capital should
be prima facie correct.
Form 84-110 must be completed by all corporations to indicate
the amount of capital of the corporation. All reserves that do
not represent definitely known and fixed liabilities must be
considered as elements of capital of the corporation. Amounts
designated for payment of dividends may not be excluded
unless such amounts have been definitely and irrevocably
placed to the credit of the stockholder, subject to withdrawal
on demand. Sums representing debts, notes, bonds,
mortgages due and payable, depreciation reserves, bad debt
reserves, or reserves representing valuation accounts may be
excluded (unless between affiliated companies or
shareholders).
Holding Corporation: A holding corporation, as defined in
Miss. Ann. Code § 27-13-1(i), is (1) any corporation owning at
least eighty percent (80%) of the value of capital stock and at
least eighty percent (80%) of the combined voting power of all
classes of capital stock of another corporation and (2) deriving
at least ninety-five percent (95%) of its gross receipts from
dividends, interest, royalties, rents, services provided to
members of an affiliated group (as defined in Section 27-7-
37(2)(d)) to the extent of the cost of providing such services.
Per Miss. Ann. Code §27-13-1(i), in the case of a holding
corporation, the value of the capital used, invested or
employed in this state shall exclude that portion of the book
value of the holding corporation’s investment in stock or
securities of its subsidiary corporation using the ratio between
(1) the holding corporation’s investment in stock or securities
of its subsidiary corporation and (2) the holding corporation’s
total assets. Such ratio shall then be applied to the total capital
stock, surplus, undivided profits and true reserves of the
holding corporation in order to arrive at the amount of the
exclusion. The holding company exclusion is computed on line
7 of Form 84-110 and a schedule of computation must be
attached to the return for the exclusion.
Multistate Taxpayers: Lines 9 through 12 of Form 84-110
must be completed by multistate corporations doing business
both within and without Mississippi. Total capital of a multistate
corporation is apportioned to Mississippi in the ratio that real
and tangible personal property owned in Mississippi and gross
receipts from business carried on in Mississippi bears to the
total real and tangible personal property owned by the
corporation and gross receipts wherever located and from
wherever received.
The amount of capital apportioned to Mississippi is computed
on line 13 of Form 84-110. The section of Form 84-110
concerning the assessed value of all real and personal
property in Mississippi must be completed by all corporations.
Miss. Code Ann. §27-13-9 and §27-13-13, provide that the
amount of the determined capital in Mississippi should in no
case be less than the assessed value of the Mississippi
property of the corporation for the year preceding the year in
which the return is due.
Taxable capital is calculated on lines 15 through 18 of Form
84-110. The amount of taxable capital shown on line 18
should be entered on line 1, Form 84-105.
For tax years ending on or after December 31, 2001, the
property and receipts of flow-through entities must be included
in a multistate corporate partner’s computation of the
apportionment ratio applied to the capital base. The assessed
value of property of flow-through entities must be included in
a multistate corporate partner’s assessed value of property
when determining the alternate capital base.
10
INCOME TAX
Generally, all domestic and foreign pass-through entities having
income from sources within Mississippi must complete Form 84-
122, which makes adjustments for additions to and deductions
from federal ordinary income due to differences in federal and
Mississippi laws, to arrive at net income (loss) for state
purposes.
Mississippi does not follow federal rules concerning installment
sales. Gains from the sale of casual property will be recognized
in the year of the sale. However, the tax on the gain may be
deferred. Deferred taxes are generally paid as the proceeds
from the sale are received. However, the following will result in
acceleration of payments:
• Transfer, disposition, sale or disposal of the note in any
manner will result in deferred tax payments becoming
immediately due and payable.
• Liquidation, dissolution, withdrawal from this state and
certain merger transactions will result in deferred tax
payments becoming immediately due and payable.
• Failure to comply with the necessary filing requirements.
Taxpayers who elect the installment method for federal income
tax purposes should include as a part of their return both a
Federal Form 6252 and a schedule of any differences between
the federal and Mississippi amounts.
Taxpayers are required to add back the following to its
computation of net income:
• Intangible expenses and costs and interest expenses and
costs in relation to or in connection with the direct or indirect
maintenance or management, ownership, sale, exchange,
or other disposition of intangible property.
• Royalty, patent, technical and copyright fees, licensing fees
and other similar expenses.
• Expenses and costs associated directly or indirectly with
factoring transactions or discounting transactions.
Intangible property includes patents, patent applications,
trade names, trademarks, service marks and similar types
of intangible assets.
Limitations: The adjustment will not apply to such portion of
intangible expenses, interest expenses and costs which are not
with a related member; or the related member is not primarily
engaged in the acquisition, use, maintenance, management,
ownership, sale, exchange or other disposition of intangible
property; and the transaction(s) were done for a valid business
purpose.
The state definition of "arms-length" is not tied to that of the
federal definition. See Miss. Code Ann. § 27-7-9(j)(6). The
Commissioner can adjust a transaction when income has been
shifted between related parties and/or taxes have been
avoided in this state.
Gains from the sale of certain stocks in domestic entities are
not recognized as a part of income. However, the gain must be
reduced by losses from the sale of certain stocks in domestic
entities if the losses were incurred in the year of the gain or
within the two years preceding or subsequent to the gain. See
Miss. Code Ann. § 27-7-9(f)(10).
Mississippi has not adopted federal provisions related to
Extraterritorial Income Exclusion. The amount related to this
exclusion of income on the federal return must be added back
to the Mississippi income tax return prior to the apportionment
of income. The proper placement for this Mississippi
adjustment to federal income is on Form 84-122, line 9 titled
"Other Additions Required by Law". A copy of Federal Form
8873 should be attached to the Mississippi return when this
adjustment is being made for federal purposes.
In addition, a FSC (Foreign Sales Corporation) that is
organized under the laws of a U.S. territory is treated as a
domestic corporation and, thus, dividends received from it are
considered apportionable business income.
Total Assignment of Income: If the business activity in
respect to any trade or business of the pass-through entity
occurs within this state, and if by reason of such business
activity the pass-through entity is not taxable in another state,
the total net income (loss) of the pass-through is assigned to
Mississippi.
Apportionment of Business Income: If the business activity
in respect to any trade or business of a taxpayer occurs both
within and without this state, and if by reason of such business
activity the taxpayer is taxable in another state, the portion of
the net income (loss) arising from such trade or business which
is derived from sources within this state, should be determined
by apportionment in accordance with the formulas prescribed
by Title 35, Part III, Subpart 08, Chapter 06 of the Miss. Admin.
Code unless prescribed otherwise. In such case, the taxpayer
must complete Form 84-125. Multistate contractors use Form
84-124.
11
Allocation of Nonbusiness Income: Non-business income
(loss) shall be allocated by multistate corporations within and
without this state in accordance with the provisions of Title 35,
Part III, Subpart 08, Chapter 06 of the Miss. Admin. Code. Form
84-150 should be used only if the corporation has activities in
another state and has income, losses, expenses, or deductions
which are to be allocated ("non-business") rather than
apportioned. For a definition of what constitutes "non-business"
income, losses, expenses, and deductions and rules for
allocating these items, See Miss. Code Ann. §27-7-23.
Net Operating Loss: For any taxable year ending after
December 31, 2001, the period for net operating loss carrybacks
and net operating loss carryovers is two periods back and
twenty periods forward. This is NOT in accordance with federal
carryback and carryover provisions that provide for a five-year
carryback period.
A short taxable year counts as a taxable year. A taxpayer may
elect to forgo the carryback on Form 84-155. Once this election
is made, it cannot be changed.
Form 84-155 must be completed and attached or an NOL
deduction will not be allowed. Taxpayers must indicate the
income year the NOL was applied (Column C of Form 84-155).
Taxpayers engaged in the trade or business of producing oil,
gas, other liquid hydrocarbons, sulfur, coal, sand, gravel and
other mineral or natural resource products, except timber,
should determine Mississippi net business income from such
activity on a direct or separate accounting basis.
The Mississippi gross business income from the production of
mineral or natural resources shall include: (a) sales of natural or
mineral resources produced in Mississippi and sold in this state;
(b) the market value, at the time of transfer, of all natural or
mineral resources produced in this state and transferred by the
taxpayer to another state for sale, refining, processing or
manufacturing, provided that if the natural or mineral resources
are sold by means of an "arms-length" transaction prior to
refining, processing or manufacturing, the market value
prescribed herein shall not exceed the selling price; and (c) the
market value at the time of transfer, of all natural or mineral
resources produced by the taxpayer in Mississippi and
transferred to a refinery, processing plant or manufacturing
facility of the taxpayer in Mississippi.
A natural resource product shall be deemed to be sold in
Mississippi if it is located in this state at the time title thereto
passes to the purchaser. In the absence of specific proof of
value of natural resources at the time of transfer from the state,
the value of natural resources at the time of production should
be determined in accordance with the methods prescribed for
the determination of "gross income from the property" for
purposes of percentage depletion for federal income tax
purposes.
For tax years beginning on or after January 1, 2002, every
exempt organization, as described in Miss. Code Ann. § 27-7-
27 or § 27-7-29 and not exempt from the income tax levy
(federal & state agencies, etc.), is required to file an income tax
return with this state if the organization:
1.
Earns or receives unrelated business taxable income as
determined under IRC Section 512 or is an ESOP with an
interest in an "S" corporation, and
2.
Is a resident of this state, doing business in this state, or
receiving income from sources within this state.
Exempt corporate organizations file Form 84-105 and any
necessary supplemental schedules. These organizations are
not subject to the franchise tax levy and should leave lines 1
through 4 blank.
In computing taxable income, enter on line 1 of Form 84-122
(line 1, page 2 of Form 81-110 for trust organizations) the
amount of unrelated business taxable income before any net
operating loss and specific deduction as reported on Federal
Form 990-T. A complete and signed copy of Federal Form 990-
T must be attached to the Mississippi schedules as a part of
the return. Make any necessary adjustments for
income/expenses otherwise included/excluded under the
income tax laws of this state such as income from sources
without this state, add-back of nondeductible income taxes, etc.
Corporate organizations with unrelated business taxable
income are subject to the same estimated payment
requirements as other corporate taxpayers. Corporate
organizations must make all required tax payments by the 15th
day of the fourth month following the close of the tax year.
While the filing deadline is also the 15th day of the fourth month
following the close of the tax year, an automatic filing extension
is granted. If a taxpayer files an extension for federal tax
purposes, the Mississippi filing deadline will be extended
through the date of the federal extension as well.
Employee Stock Ownership Plans that receive Mississippi
income as a shareholder in an "S" corporation must include
such income as a part of Mississippi taxable income. The
source of the income is determined by the "S" corporation's
activities and is reported on Form 84-132 to the ESOP
shareholder.
Trust organizations must make all required tax payments by
the 15th day of the fourth month following the close of the tax
year. Generally, if a filing extension is granted for federal tax
purposes, it will be granted for state purposes as well. A copy
of the federally approved extension must be attached with the
return filing.
PRODUCERS OF MINERAL OR NATURAL
RESOURCE PRODUCTS
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INCENTIVE CREDITS AND EXEMPTIONS
Incentive credits arising at the S corporation, partnership, LLC
or LLP level are passed through to the shareholders,
partners/interest owners based on their percentage of
ownership in the entity earning the credit.
As a general rule, the credit passed through to the shareholder,
partner/interest owner can be applied only to the income tax
attributable to the shareholder’s, partner/interest owner's
income derived from the entity earning the credit.
In the case of a Mississippi resident who is a partner in a
multistate S corporation or partnership, credits passed through
from the S corporation or partnership may be used to offset only
the amount of income tax attributable to the owner’s share of
pass-through entity income assigned to Mississippi. For any of
these credits to be allowed, schedules must be attached
showing the computations.
Form 84-401 should only be completed by members of the
composite filing group. If more than three income tax credits are
claimed, attach a supplemental schedule and enter the total on
line 3 of Form 84-401. Non-composite members of the group
should complete Form 80-401 and attach as a part of their
Mississippi Individual Income Tax Return.
The following is a brief description of the major credits allowed
under state statutes:
Premium Retaliatory Tax Credit (02)
An income tax credit is available to insurance companies that
paid additional retaliatory premium taxes to other states. The
credit can offset 100% of income tax due. No carryover is
allowed for this credit.
Finance Company Privilege Credit (03)
An income tax credit is provided to finance companies that paid
privilege taxes. The credit can offset 100% of income tax due.
No carryover is allowed for this credit.
Jobs Tax Credit (05)
A credit is allowed for increasing employment levels in certain
types of business. The business must be primarily engaged in
manufacturing, processing, warehousing, distribution,
wholesaling, or research and development; or designated by
rule and regulation by the Mississippi Development Authority as
air transportation and maintenance facilities, final destination or
resort hotels having a minimum of 150 guest rooms, recreational
facilities that impact tourism, movie industry studios,
telecommunications enterprises, data or information processing
enterprises or computer software development enterprises or
any technology intensive facility or enterprises.
The amount of the credit is based on the number of new jobs
created and the county where the jobs are created. The credit
is good for a period of 5 years. This credit may be used in
combination with any of the other credits. However, the total of
the Jobs Tax Credit is limited to 50% of the income tax liability
attributable to the income derived from operations in this state
for that year. Any credit claimed but not used in a taxable year
may be carried forward for 5 years.
The credit is based on the percentage of payroll for new full-
time jobs.:
County Ranking
Average
Minimum
Increase of Jobs
Percentage
of Payroll
Tier One
(Developed)
20 or More 2.5%
Tier Two
(Moderately Developed)
15 or More 5%
Tier Three
(Less Developed)
10 or More 10%
The number of jobs must be created within 1 year and is
measured at the end of the fiscal year. They cannot be
accumulated over several years. The credit is available for
each net new full-time job created as long as the minimum
number has been achieved and maintained. The credit is for
full-time positions only and is based on the current year gross
payroll. The credit allowed shall be adjusted in the event of
payroll fluctuations during the additional five (5) years of the
credit. You cannot combine part-time jobs to add up to a full-
time job. The credit is based on filled positions and the
employees must be employed in this state and subject to
Mississippi Withholding Tax. Form 83-450 must be completed
and attached to the return. Please attach to this form, a
schedule listing the new full-time jobs created (titles/pins, date
created and payroll amount for the year).
A jobs tax credit is authorized for each full-time employee
employed in a new cut and sew job by enterprises that own or
operate an upholstered household furniture manufacturing
facility. The repeal date on this provision is extended to January
1, 2026.
A jobs tax credit is authorized for each full-time employee of
businesses primarily engaged in providing inland water
transportation of cargo on lakes, rivers and intracoastal
waterways. This credit is effective from and after January 1,
2019.
National or Regional Headquarters Tax Credit (06)
(Repealed effective July 1, 2022)
An income tax credit is available for a 5-year period for each
position assigned to the national or regional headquarters of a
business created in or transferred to Mississippi. The credit is
$500 for each new full-time employee, $1,000 for each new
fulltime employee whose salary is 125% of the average annual
state wage, or $2,000 for each new full-time employee whose
salary is 200% of the average state wage. A minimum number
of 20 new headquarters jobs must be created to receive the
credit. A taxpayer claiming a refund on this credit must file
a separate return; it cannot be included in a combined
return.
13
Research and Development Skills Credit (07)
This credit provides an incentive to locate full-time positions
requiring research and development skills in the state. These
positions have to be engaged in a research and development
activity. Qualification of jobs for this credit would require at a
minimum, a Bachelor’s degree in a scientific or technical field of
study from an accredited 4 year college or university,
employment in the employee’s area of expertise and
compensation at a professional level with 2 years of related job
experience. Examples are chemist and engineers.
A credit of $1,000 for each full-time position requiring research
and/or development skills is available for a 5-year period. There
is no minimum number of positions that must be created to
qualify for this credit. The credit is for full-time positions only.
Part-time jobs cannot be combined to add up to a full-time job.
The credit is based on filled positions and the employees must
be employed in this state and subject to Mississippi Withholding
Tax. The credit for employees employed for less than 12 months
will be allowed based on a pro-rated portion in the first and last
years. The amount of the credit is pro-rated based on the
number of months the employee is employed in this state
divided by 12.
The total of the Research and Development Skills Credit is
limited to 50% of the income tax liability attributable to the
income derived from operations in this state for that year. Any
excess credit amount can be carried forward for up to 5 years
from the original year in which the excess credit could not be
used.
Employer Child/Dependent Care Credit (08)
The Child/Dependent Care Tax Credit is an incentive to any
business providing dependent day care (both children and adult)
for its employees during the employee's working hours or
assisting community-provided day care. The expenses must be
incurred in the operation of a program certified by the Mississippi
Department of Health. The net cost of any contract executed by
the employer for a third party to provide dependent care is a
qualified expense. If the employer elects to provide dependent
care directly, then the qualified expenses are expenses for staff,
learning and recreational materials and equipment, and cost
associated with the construction and maintenance of a facility.
Additional eligible expenses include costs assumed by the
employer which increases the quality, availability and
affordability of dependent care in the community used by
employees during the employee's work hours. For facilities and
equipment, the eligible expense is the amount of depreciation
expense allowable in computing taxable income. These
expenses are net of any reimbursement.
The Child/Dependent Care Tax Credit may be used in
combination with any other credit. The credit is equal to 50% of
the qualified day care expenses. It is not refundable. It can be
used to offset 100% of the income tax liability. Any excess credit
amount can be carried forward for up to 5 years from the original
year in which the excess credit could not be used.
Skills Training Credit (09) (Repealed effective July 1, 2016)
A credit is allowed for certain employer-sponsored basic skill
training and retraining programs. The credit allowed is 50% of
qualified expenses not to exceed 50% of the income tax liability.
Any excess credit will not be refunded but can be carried
forward for up to 5 years. In addition, the credit shall not exceed
$2,500 per employee per year. The job training and retraining
tax credit should be in addition to all other tax credits granted by
the laws of this state. The repeal date on this provision is
extended to July 1, 2016.
Reforestation Tax Credit (RTC) (10)
This credit, based on the costs incurred for certain approved
reforestation practices, is an amount equal to the lesser of 50%
of the actual cost of approved practices or 50% of the average
cost of approved practices as established by the Mississippi
Forestry Commission. In any taxable year, the maximum
amount of RTC shall not exceed the lesser of $10,000 or the
amount of income tax imposed upon the eligible owner for the
taxable year reduced by the sum of all other credits allowable
to the eligible owner. The lifetime maximum reforestation tax
credit that an eligible owner may utilize is $10,000 in the
aggregate.
Effective January 1, 2007, the lifetime maximum RTC that an
eligible owner may utilize is $75,000.00. Any unused portion of
the RTC may be carried forward to succeeding years.
Reforested acreage on which the eligible owner receives any
state or federal cost share assistance funds to defray the cost
of an approved reforestation practice is not eligible for the RTC.
The RTC is not available to private corporations which
manufacture products or provide public utility services of any
type or any subsidiary of such corporations.
Gambling License Fee Credit (11)
An income tax credit provided to the licensee that paid a license
fee which is based on gross revenues of the licensee. The credit
can offset 100% of income tax due. No carryover is allowed for
this credit.
Mississippi Business Finance Corporation Revenue Bond
Service Credit (13)
Only debt service paid on revenue bonds issued by the
Mississippi Business Finance Corporation to finance economic
development projects to induce the location of manufacturing
facilities within this state can be taken as a credit. This credit can
be used against the taxes due from the income generated by
or arising out of the economic development project. Effective
January 1, 2014, Senate Bill 2376 amends Miss. Code Ann.
§57- 10-401 to revise the term “Economic Development
Project” to include the economic development project of a
related approved company that is merged into or consolidated
with another approved company where the approved
companies are engaged in a vertically integrated
manufacturing or warehouse operation. The bill also amends
Miss. Code Section Ann. §57-10-449, to extend the repeal date
until October 1, 2022 the authority for the Mississippi Business
Finance Corporation to issue bonds to finance economic
development projects. For more information on the benefits of
this program contact: Mississippi Development Authority, P.O.
Box 849, Jackson, MS 39205-0849.
14
Ad Valorem Inventory Tax Credit (14)
This is an income tax credit for manufacturers, distributors and
wholesale or retail merchants for a certain amount of ad valorem
taxes paid on commodities, goods, wares and merchandise held
for resale. The ad valorem credit may be claimed for each location
where such commodities, products, goods, wares and
merchandise are found and upon which the ad valorem taxes have
been paid. The tax credit for each location on which ad valorem
taxes have been paid should not exceed the lesser of $15,000 or
the amount of income taxes attributable to such location.
Previously, the credit may be claimed only in the year in which the
ad valorem taxes are paid; however, Senate Bill 2934 amended
Miss. Code Ann. §27-7-
22.5 increasing the income tax credit for ad valorem taxes paid on
certain inventory and authorizes any unused tax credit claimed to
be carried forward for five (5) consecutive years effective July 1,
2012.
Effective January 1, 2014, House Bill 787 amends Miss. Code
Ann. §27-7-22.5 to provide an income tax credit for ad valorem
taxes paid on rental equipment. Rental equipment is defined as
any rental equipment or other rental items which are held for short-
term rental to the public under rental agreements that are not
subject to privilege taxes. The bill also provides for the amount of
credit to increase each year until the 2016 taxable year in which
the amount of the credit will be limited to the lesser of the amount
of ad valorem taxes paid or the amount of income taxes due for
each location. Any ad valorem taxes paid by a taxpayer that is
applied toward the tax credit may not be used as a deduction by
the taxpayer for state income tax purposes.
A copy of the tax receipt from the county that shows the
inventory valuation and a schedule showing the calculation
of the ad valorem tax paid based on the valuation must be
attached to the return.
Export Port Charges Credit (15)
An income tax credit is authorized for taxpayers that utilize the port
facilities at state, county, or municipal ports. The income tax credit
is equal to the total export cargo charges paid by the taxpayer for:
(a) receiving in the port; (b) handling to a vessel; and (c) wharfage.
The credit provided should not exceed 50% of the amount of tax
imposed upon the taxpayer for the taxable year reduced by the
sum of all other credits. Any unused portion of the credit may be
carried forward for the succeeding 5 years. This credit will be
repealed effective December 31, 2022.
Import Port Charges Credit (17)
An income tax credit is authorized for taxpayers that utilize the port
facilities at state, county, or municipal ports for the import of cargo.
To be eligible, a taxpayer must locate its United States
headquarters in Mississippi on or after January 1, 2005, employ at
least 5 permanent full-time employees who actually work at such
headquarters and have a minimum capital investment of
$5,000,000 in Mississippi. The income tax credit is equal to the
charges paid by the taxpayer for: (a) receiving in the port; (b)
handling to a vessel; and (c) wharfage. The credit provided shall
not exceed 50% of the amount of tax imposed upon the taxpayer
for the taxable year reduced by the sum of all other credits. Any
unused portion of the credit may be carried forward for the
succeeding 5 years. The maximum cumulative credit that may be
claimed ranges between $1,000,000 and $4,000,000 depending
on the number of permanent full-time employees of the
taxpayer.
Broadband Technology Credit (BTC) (19)
A tax credit is provided for telecommunications enterprises
making investments in equipment used in the deployment of
broadband technologies. The credit applies to both income and
franchise taxes. The credit is a percentage of the cost of the
investments incurred after June 30, 2003 and before July 1,
2013. The percentage applied is 5%, 10%, and 15% for Tier 1,
Tier 2, and Tier 3 counties respectively. For more details on
eligibility, computation of the credit, qualifying expenditures,
limitations, carryovers, as well as any necessary forms or work
sheets, please contact the Corporate Tax Division at (601) 923-
7099. Enterprises qualifying for this credit are able to receive
certain sales tax exemptions as well. For more information
please contact the Sales Tax Bureau at (601) 923-7015.
House Bill 1729 amended Miss. Code Ann. §57-87-5 to extend
until July 1, 2025, the franchise tax credit authorized for
telecommunications enterprises for the cost of equipment used
in the deployment of broadband technologies and to extend until
July 1, 2025 the ad valorem tax exemption for equipment used
in the deployment of broadband technologies by
telecommunications enterprises.
Manufacturing Investment Tax Credit (23)
A manufacturing enterprise who falls within the definition of the
term “manufacturer” in Miss. Code Ann. § 27-65-11 and has
operated in the state for at least 2 years is allowed a
manufacturing investment tax credit for income tax equal to 5%
of the eligible investments made by the manufacturing
enterprise. "Eligible investment" means an investment of at least
$1,000,000.00 in buildings and/or equipment for the
manufacturing enterprise.
The maximum credit that may be claimed by a taxpayer on any
project shall be limited to $1,000,000. The Manufacturing
Investment Tax Credit should not exceed 50% of the taxpayer's
state income tax liability in any 1 tax year net of all other credits.
Any Manufacturing Investment Tax Credit claimed but not used
may be carried forward for 5 years from the close of the tax year
in which the eligible investment was made. For more details on
eligibility, computation of the credit, qualifying expenditures,
limitations, carryovers, as well as any necessary forms or work
sheets, please contact the Corporate Tax Division at (601) 923-
7099.
Historic Structure Rehabilitation Credit (26)
An income tax credit is allowed for certain costs and expenses
in rehabilitating eligible property certified as a historic structure
or structure in a certified historic district. Effective January 1,
2011, if the amount of the credit exceeds $250,000, the
taxpayer may elect to claim a refund in the amount of 75% of
the excess credit in lieu of the 10-year carryforward. The refund
will be paid in equal installments over a 2-year period. Not-for-
profit entities are not eligible for this credit. House Bill 1729
amended Miss. Code Ann. §27-7-22.3 to remove the provision
that authorizes a taxpayer to elect to receive a 75% rebate on
the amount of excess historic rehabilitation credits over
$250,000 to allow the taxpayer to elect to receive a
rebate on 75% on the total amount of excess historic rehabilitation
15
credit in lieu of the ten-year carryforward. The bill also increased
the maximum aggregate amount of historic rehabilitation credit
that may be awarded by $60,000,000 and extended the credit
qualification date to December 31, 2030.
New Markets Credit (28)
The New Markets Credit allows a credit for income, insurance
premium, or premium retaliatory taxes to investors in eligible equity
securities issued by a Qualified Community Development Entity
that has entered into an allocation agreement with the Community
Development Financial Institutions Fund of the U.S. Treasury
Department (CDFI) with respect to federal income tax credits
authorized by the Federal NMTC Law, which includes the State of
Mississippi in the service area outlined in such agreement. This
Qualified Community Development Entity is commonly referred to
as a “CDE”.
The CDE must use 85% or more of the proceeds of the issuance of
the equity security to make investments that are Mississippi
Qualified Low-Income Community Investments (MQLICIs), and
those investments must be maintained for a minimum of 7 years. A
MQLICI is an investment in Mississippi in a business that meets
the requirements of a Qualified Active Low-Income Community
Business (QALICB) or an investment in Mississippi approved as a
Qualified Low Income Community Investment under the Federal
New Markets Tax Credit law. A security meeting these
requirements is commonly referred to as a “QEI”. MDA will review
the QEI to determine if it qualifies for the Mississippi New Markets
Credit. If the QEI does qualify, MDA will issue a certification of
credits allowed. The total Mississippi New Markets Credit for all
Mississippi taxpayers is capped at $15,000,000 per year.
Wildlife Land Use Credit (30)
Effective January 1, 2010, a state income tax credit is allowed that
provides a $5.50 per acre tax credit for certain taxpayers that allow
land to be used as a natural area preserve, wildlife refuge, wildlife
management area or public outdoor recreation area. Land must
first be approved to be suitable for the uses listed above by the
Mississippi Commission on Wildlife, Fisheries and Parks. Any
unused credit amount may be carried forward for five (5) years from
the close of the taxable year in which the land was approved for
such a use.
Headquarters Relocation Credit (32)
(Repealed effective July 1, 2022)
Effective January 1, 2014, an income tax credit is authorized under
House Bill 785 for any company that transfers or relocates its
national or regional headquarters to Mississippi. The bill provides
that the amount of the credit is equal to the actual relocation costs
paid by the company in the taxable year. Relocation costs shall
include those non-depreciable expenses that are necessary to
relocate headquarters’ employees to the national or regional
headquarters, including, but not limited to, costs such as travel
expenses for employees and members of their households to and
from Mississippi in search of homes and moving expenses to
relocate furnishings, household goods and personal property of the
employees and members of their households. The company must
create twenty (20) jobs to qualify and the credit shall be applied to
the taxable year in which the relocation costs are paid. The credit
is limited to a $1,000,000 cap each fiscal year.
Veteran Employee Credit (33)
This bill authorizes an income tax credit for taxpayers that
employ persons who are honorably discharged veterans who
served on active duty in the Armed Forces of the United States
on or after September 11, 2001, and who have been
unemployed for six consecutive months immediately prior to
being employed by such taxpayers. Likewise, this bill authorizes
any tax credit claimed but not used in any taxable year to be
carried forward for five (5) consecutive years and the aggregate
amount of tax credits that may be awarded shall not exceed
$1,000,000.00. This bill is effective January 1, 2016.
Business Contributions to Eligible Charitable
Organizations (36)
Effective from and after January 1, 2019, the Children’s Act
authorized an income tax credit for business enterprises that
donate cash to eligible charitable organizations. The credit is
limited to fifty percent (50%) of the total tax liability and may be
carried forward for five (5) years. House Bill 1729 amended
Miss. Code Ann. §27-7-22.41 was to increase the aggregate
amount of credits that may be awarded during a calendar year
for voluntary cash contributions by business enterprises to
eligible charitable organizations and to revise certain provision
relating to the allocation of such credits.
Endowment Fund Charitable Credit (37)
Provides an income tax credit for donations made to endowed
funds held by community foundations. The tax credit shall be
25% of the qualified contribution made to the endowed fund
with the minimum amount being $1,000 and the maximum
amount being $200,000. If the amount of allowable credit
exceeds the amount of tax due, the excess may be carried
forward for five (5) years. This credit can be utilized by both
individual and corporate taxpayers and is effective from and
after January 1, 2019.
Bank Share Credit (50)
The Bank Share Credit is a franchise tax credit that equals the
amount of all ad valorem taxes paid by banks on personal
property and on the assessed value of its intangibles to any
county, district or municipality. The credit can offset 100% of
franchise tax due. No carryover is allowed for this credit.
General Restrictions on Incentive Credits
The only credits whose usage is dependent on another credit
are the Export Port Charges Credit, Import Port Charges Credit
and the Reforestation Tax Credit (RTC). The RTC should be
used last.
The total of the Jobs Tax Credit, the Headquarters Credit and
the R & D Skills Credit cannot exceed 50% of the total income
tax due. The other credits are not limited in such a manner and
their usage will be independent of one another. When one
credit is limited to 50% of the income tax due and another one
is also limited to 50%, when combined they may offset 100%
of the income tax due. It will be up to the taxpayer to list which
credits are to be used on the tax return. Please keep in mind
that a number of the credits do not have carryforward
provisions. When a deduction on the Mississippi tax return also
gives rise to a tax credit, the amount of that credit which is being
used on the current return must be added back to Mississippi
income (loss) after any apportionment of income.
16
The adding back of the credit to taxable income will increase the tax
liability, which may increase the amount of credit that may be taken.
When this is the case, continue to increase the amount of credit
being used and add back to income until there is a difference of
$1,000 or less between the two. Therefore, the credit added back
may be, at most, $1,000 less than the credit being used.
Some credits are based on a percentage of an expense, and in this
case only the credit used should be added back. Those credits
which are affected are: Finance Company Privilege,
Child/Dependent Care, Skills Training, Gaming, Rural Economic
Development (RED), Export Port Charges, Import Port Charges,
Reforestation, and Ad Valorem tax credits.
The credits allowed should not be used by any business enterprise
or corporation other than the business enterprise actually qualifying
for the credit.
As a general rule, all credits generated by the S corporation or
partnership are passed through to the shareholders based on their
respective ownership percentages.
In the event that a composite return is filed on behalf of some or all
of the nonresident shareholders, or in the event that a liability for
taxes arises due to the failure to secure an agreement from a
resident shareholder or a nonresident shareholder fails to file a
return and to make timely payment of taxes due, any credit which
would otherwise be passed through to the shareholder(s) involved
may be utilized against the tax liability.
Growth and Prosperity (GAP) Areas Tax Exemption
The Growth and Prosperity (GAP) Areas Tax Exemption was
created to encourage businesses to locate facilities and hire
individuals in areas that have a certain percentage of the population
below the federal poverty level or have an unemployment rate that
is 200% of the state’s average unemployment rate.
The income and franchise tax exemption is available for a
period of 10 years for certain businesses locating in a
designated GAP area. The eligible businesses include ones
that manufacture, process, assemble, store, warehouse,
service, distribute, sell any products or goods including
products of agriculture, research and development, and others
as determined by MDA which will create at least 10 jobs.
Businesses that cannot claim the exemption are retail
establishments, gaming businesses or casinos and electrical
generation facilities. An eligible business that constructs a new
facility or expands an existing facility located in one of the
designated GAP areas can apply to MDA to be exempted from
state and local taxes for a period of 10 years or until December
31, 2022, whichever occurs first.
A business that relocates from a county in Mississippi to a
GAP area is not eligible for the exemption. When filing the
state income and franchise tax return claiming the exemption,
attach a schedule showing the calculation of how the
exemption was calculated, a copy of the certification from the
MDA and the completed application, and the Income and
Franchise Tax Credit Summary (Form 84-401) showing all
credits taken.
The GAP Area Exemption is authorized under Miss. Code
Ann. § 27-7-21, § 27-13-5 and § 57-80-1 through § 57-80-11.
For more information on the GAP Areas, please contact:
Mississippi Development Authority
Financial Resources Division – GAP Program
P.O. Box 849
Jackson, MS 39205
SPECIFIC INSTRUCTIONS
TAXPAYER INFORMATION
Please provide all information requested. Enter the county code
corresponding to your principal business location (see Appendix for
a list of the codes).
Partnerships, LLCs, and LLCs filing an informational return
should start on page 2, line 1.
FRANCHISE TAX (S CORPORATIONS ONLY)
Line 1: Enter the amount of taxable capital from Form 84-110,
line 18.
Line 2: Enter the amount of franchise tax due. For tax year 2021,
the franchise tax rate is $1.75 per $1,000 of capital in
excess of $100,000 (minimum tax of $25).
Line 3: Enter the total amount of credit claimed from Form 84-
401, line 1.
Line 4: Enter the net franchise tax due (line 2 minus line 3).
If line 3 equals or exceeds the amount shown on line
2, enter a zero.
COMPOSITE INCOME TAX ONLY
Line 5: Enter zero unless the taxpayer is filing a composite
return or is required to make a payment of tax
because it failed to obtain an agreement from a non-
resident shareholder required by subsection (3)(a) of
section 10 of the Mississippi S Corporation Income
Tax Act. In either of these situations, enter the total
of the non-resident shareholders' distributions
included in the composite return from Line 32, Form
84-122 or on which payment of tax is required by the
S Corporation for failure to secure the above
mentioned agreement.
17
Line 6: Enter the amount of income tax due. For tax year 2021,
the income tax rates are: 0% on the first $4,000 of taxable
income; 3% on the next $1,000 of taxable income; 4% on
the next $5,000 of taxable income; and 5% on taxable
income in excess of $10,000.
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.
Line 7: Enter the total amount of credit claimed from Form 84- 401,
line 3. For limitations, see the “General Restrictions on
Incentive Credits” section of this booklet.
Line 8: Enter the net income tax due (line 6 minus line 7). If line 7
equals or exceeds the amount shown on line 6, enter a
zero.
PAYMENTS AND TAX DUE
Line 9: Enter the total franchise and income tax due (add line 4
plus line 8). S corporations, enter the amount on line 4;
composite S corporations, enter the amounts on line 4 plus
line 8; and composite partnership, enter the amount on line
8.
Line 10: Enter the amount of overpayment from the previous filed
return. The overpayment from the prior year should be the
amount shown on the previous return as an overpayment
to be credited to the next year.
Line 11: Enter the total amount of estimated tax payments and
payment with extension. This amount should equal the
total of quarterly estimated income tax payments and the
amount paid with the request for an automatic extension
of time to file.
Line 12: Enter the total amount of previous payments made for the
tax year (line 10 plus line 11).
Line 13: Enter the net total franchise and income tax due. This is
the amount of total tax due less previous payments (line
9 minus line 12).
Line 14: If the current Mississippi income tax liability (line 8) is
$200 or less, then estimated income tax payments
were not required for this year. If the current year
Mississippi income tax liability exceeds $200, Form
83- 305 (S corporations) and Form 80-320
(partnerships) should be completed and attached to
the return if filing a composite return. S corporations
enter the amount from Form 83-305, line 19.
Partnerships enter the amount from Form 80- 320,
line 11.
Line 15: Enter the amount of interest due on late payment of
tax. An extension of time only extends the time for
filing a return, not payment of the tax. If the income
and franchise tax is not paid by the original due date
of the return, then interest is due at the rate of ½ of
1% per month on or after 01/01/19.
Line 16: Enter the amount of penalty due on late payment of tax.
An extension of time only extends the time for filing a
return, not the payment of tax. The penalty imposed
for failure to pay the tax when due is 1/2% per month,
not to exceed 25% in the aggregate.
Line 17: Enter the amount of penalty due for failure to file a
return by the due date of the return. The penalty for
failure to file a return is 5% per month not to exceed
25% in the aggregate. The penalty imposed for
failure to file is based on the additional amount of tax
due. Such failure to file penalty shall not be less than
$100 for income tax.
Line 18: Enter the balance of tax due (if line 9 is larger than
line 12). This is the amount of total tax due less
previous payments plus interest and penalties (add
line 13 through line 17).
Line 19: Enter the amount of overpayment, if any (line 12
minus line 9).
Line 20: Enter the portion of line 19 that you wish to carry
forward and credit against your next year’s tax
liability. This credit will be considered for estimated
income tax purposes as a first quarter payment.
Line 21: Enter the portion of line 19 that you wish to be
refunded. The total of line 20 and line 21 should
equal line 19.
Generally, all domestic and foreign pass-through entities
having income from sources within Mississippi must complete
Form 84-122 which makes adjustments for additions to and
deductions from federal ordinary income due to differences in
Federal and Mississippi laws, in arriving at the net income (loss)
for state purposes. This schedule highlights some of the
differences but is not an all-inclusive list. The Mississippi
Administrative Code and Regulations are available on our
website at www.dor.ms.gov.
18
Multistate construction contractors and producers of mineral or
natural resource products are required to use direct accounting
and file Form 84-124. In this situation, lines 1 through 24 of this
form are not completed unless the taxpayer also has income
apportionable to this state from another line of business.
Lines 19, 20, 21 of this form do not apply to taxpayers doing
business only in Mississippi.
Line 1: Enter the amount of taxable income (loss) (before net
operating loss and special deductions) per federal
Form 1120S (S corporations) and federal Form 1065
(partnerships).
Line 2: Enter the combined amount of the pass-through
income items shown on federal Form 1120S/1065
Schedule K. Long term and short term capital losses
are included only to the extent of current year capital
gains.
Line 3: Enter the combined amount of pass-through
deductions shown on federal Form 1120S/1065,
Schedule K.
Line 4: Enter the total of lines 1 plus 2 less line 3. This amount
represents federal net income.
Line 5: Enter the amount of state, local and foreign
government income taxes claimed as a deduction on
Form 1120S/1065.
Line 6: Enter the amount of interest on obligations of states and
political subdivisions thereof (other than Mississippi)
received by the corporation, net of expenses.
Line 7: Enter the amount of depletion claimed on Form
1120S/1065 in excess of the cost basis of the asset on
which the depletion is claimed.
Line 8: Enter the amount of special depreciation allowance
claimed for federal tax purposes. Federal Form 4562
must be completed twice and attached immediately
after Form 84-122.
The first submission reflects the deductions taken for
federal income tax purposes. The second submission
should be labeled “Mississippi” at the top of the form
and will compute the apportionable and/or allocable
depreciation deduction without taking into account any
special depreciation allowance (generally line 14 of
federal Form 4562).
Any difference between the two submissions resulting
from the special depreciation allowance is reported as
an increase on this line. Any additional depreciation
expense, for purposes of this state, due to the basis
adjustment not being made is reported on line 15 of this
form.
Line 9: Enter any other additions required by law. Other
additions include but are not limited to 1) charitable
contribution carryovers, 2) unrecognized installment
sale gains, and 3) add back of intangible expenses and
costs and interest expenses and costs incurred with
certain related members.
For more information on treatment of installment sales,
as well as the years effected, see Miss. Code Ann. §
27-7-9. Intangible expenses and costs and interest
expenses and costs incurred with certain related
members must be added back to income. For
additional details, see Miss. Code Ann. § 27-7-17(2).
Line 11: Exempt interest received on direct U.S. Government
obligations (see Title 35, Part III, Subpart 02, Chapter
04 of the Miss Admin Code on what constitutes a direct
obligation) is not taxable to Mississippi. Enter the
amount of such interest reported as income on Form
1120S/1065, net of expenses.
Line 12: Enter the amount of wage expense that was not
deducted on Form 1120S/1065 because a federal tax
credit was taken in lieu of an expense.
Line 13: Enter the income/loss from a partnership or other
flow-through entity. Flow-through entity income is
allocated based on the source as determined in the
hands of the flow-through entity rather than the owner.
Line 14: Multistate construction contractors and producers of
mineral or natural resource products must use direct
accounting (Form 84-124) to report the income from
these lines of business. Enter the income (net of
expenses) from these lines of business as reported on
federal Form 1120S/1065.
For further information concerning accounting
methods for contractors and mineral producers see
Title 35, Part III, Subpart 08, Chapter 06 of the Miss.
Admin. Code for details. If this is your only line of
business in Mississippi, skip lines 1 through 24 and
start with line 25.
Line 15: When a special depreciation allowance is taken for
federal tax purposes, the depreciable base must be
reduced by the amount of the allowance. Enter the
additional depreciation expense for purposes of this
state due to the basis adjustment not being made for
state purposes. Attach supporting computations for
any amounts claimed.
Line 16: Enter any other deductions authorized by law. For
each adjustment, provide an explanation of the basis
for exclusion and a schedule showing how the amount
is computed. In particular, gain from the sale of an
interest in certain types of domestic entities may not
be recognized for state purposes. If this is applicable,
provide a schedule showing the computation of the
non-recognized gain. For more details on what
qualifies for this exclusion, see Miss. Code Ann. §27-
19
7-9(f)(10).
Line 18: Adjusted federal Form 1120S/1065 income (loss)
subject to apportionment (line 4 plus line 10 minus line
17). If this corporation is not doing business in other
states (as opposed to multiple states) skip lines 19
through 21 and enter the amount of this line on line
22.
Line 19: Enter the amount of non-business income (loss)
shown on the Non-business Income Worksheet, Form
84-150, column E, line 2.
Line 23: Enter the amount of nonbusiness income (loss)
allocated to this state shown on the Nonbusiness
Income Worksheet, Form 84-150, column F, line 2.
Line 24: Enter the amount of Mississippi sourced income (loss)
received from flow-through entities (attach Mississippi
K-1s).
Line 25: Enter the amount reported on Form 84-124, page 2,
line 31 and/or page 3, line 46.
Line 26: Enter other adjustments required by law. Attach a
schedule of computations.
Line 27: Enter the amount of income exemption. When filing the
state tax return claiming an exemption, attach a
schedule showing the calculation of how the exemption
was calculated, a copy of the certification from the
Mississippi Development Authority
(MDA) and the
completed application.
Line 28: Income apportioned and directly allocated to
Mississippi (sum lines 22 through 27). Unless you are
filing a composite return on behalf of some or all of the
nonresident shareholders, stop here and enter zero on
Form 84-105, line 5.
Line 30: Enter the amount of composite filing adjustment. For
details of how to compute the adjustment, view the
“Composite Filing” section of this booklet.
Line 31: Deduct any available separate company composite
Mississippi net operating loss carryover or carryback to
the extent of composite income. Attach a completed
Form 84-155. Mississippi does not conform to federal
net operating loss rules.
Line 32: Mississippi composite income subject to tax (lines 29
less line 30 and line 31). If positive, report this amount
on Form 84-105, line 5. Only income of qualified
non-resident partners electing to be in a composite
filing is included on this line. All other partners'
income is reported on their respective Mississippi K-1's
and as a part of their respective Mississippi individual
income tax filings.
Schedule K is a summary schedule of all shareholders' shares
of the corporation's income (loss), credits, etc. All corporations
must complete this form.
Column A: Enter the name, FEIN or SSN of each owner(s) or
partner(s) of the entity.
Column B: Enter the owner(s) or partner(s) ownership
percentage and state of residence. Enter the
percentage in decimal form. For example, 25%
should be entered as 25.0000. Check the box if
filing composite. See the “Composite Filing”
section of this booklet for additional information
on composite filers.
Column C: Enter each owner or partner share of Mississippi
income (loss) on line a. Enter the credit code and
the amount of the credit on line b and line c
respectively.
Column D: Enter the amount of non-Mississippi taxable
income (loss) for each owner or partner.
Line 2: Enter the totals from Column B through Column D.
Line 3: If applicable, enter the totals from page 2 of this
form, Column B through Column D.
Line 4: Enter the sum of line 2 and line 3 from Column B
(must total 100%). Enter the totals from line 2a and
line 3a from Column C here; composite filers enter
total composite income from Column C, line 4a on
Form 84-122, page 2, line 29 and line 4c on Form
84-401, line 3. Enter the sum of line 2 and line 3
from Column D on line 4, Column D.
Line 5: Enter the amount from line 4a, Column C plus line
4, Column D.
The amounts to be shown on the Mississippi Schedule K-1
should represent Mississippi income and/or deductions. Due
to the differences in treatment of various elements of income,
expenses and/or credits for federal and state purposes, the
amounts shown on the Mississippi K-1 will not necessarily be
the same amounts as shown on the Federal K-1.
Determination of the amounts to be reported on the Mississippi
K-1 should be made using the owner’s share of income and
deductions including Mississippi apportionment.
For informational items that cannot be reported as a single
dollar amount, enter “STMT” in the dollar amount entry space
to indicate the information is provided on an attached
statement.
20
Box 1: Enter the amount of ordinary business income (loss)
per federal Form 1120S, page 1, line 21 (S
corporations) and federal Form 1065, page 1, line 22
(partnerships).
Box 2: Enter the owner’s share of rental real estate income
(loss), net of expenses.
Box 3: Enter the owner’s share of Mississippi other rental
income (loss), net of expenses.
Box 4: Guaranteed payments represent a division of the
partner’s profit. Therefore, enter the amount of
payments made by the partnership to the partner for
services rendered and/or or interest on capital
contributions. Applicable to partnerships only.
Box 5: Enter the total owner’s share of Mississippi interest
income received by or credited to the entity. As a
general rule, interest income constitutes gross
income and is fully taxable, unless specifically
exempt or excluded by statute.
Box 6a: Enter the owner’s share of Mississippi ordinary
dividends income.
Box 6b: Enter the owner’s share of Mississippi qualified
dividends income.
Box 7: Enter the owner’s share of Mississippi
royalties.
Box 8: Enter the owner’s share of Mississippi net short-term
capital gain (loss) from federal Schedule D, Form
1120S (S corporations) and federal Schedule D,
Form 1065 (partnerships).
Box 9a: Enter the owner’s share of Mississippi net long-term
capital gain (loss) from federal Schedule D, Form
1120S (S corporations) and federal Schedule D, Form
1065 (partnerships).
Box 9b: A collectible gain (loss) is any long-term gain or
deductible long-term loss from the sale or exchange of
a collectible that is a capital loss. Mississippi Law does
not conform to federal with respect to the tax treatment
of capital gains; therefore, the gain is taxed as ordinary
income.
Box 9c: Enter the owner’s share of Mississippi Section 1250
gain.
Box 10: Enter the owner’s share of Mississippi Section 1231
gain (loss). Attach a copy of the federal Form 4797.
Box 11: Enter the owner’s share of Mississippi income, gain, or
loss not included in boxes 1 through 9. Provide a
description and the amount for each item.
Box 12: Enter the owner’s share of Mississippi charitable
contributions made by the entity (limited to 20% of
the entity’s current year taxable income).
Mississippi does not allow a carryover of any
unused contributions deduction.
Box 13: Enter the owner’s share of Mississippi Section 179
deduction. Attach a copy of the federal Form 4562.
Box 14: Enter the owner’s share of Mississippi other
deductions authorized by law. For each adjustment,
provide an explanation of the basis for exclusion
and a schedule showing how the amount is
computed.
Box 15: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information. Applicable to partnerships only.
Box 16: This box is used to report federal tax credits which
are not applicable to the state; therefore, it will be
reported as an item of information. Any state tax
credits claimed by the corporation should be
reported in Part IV of this form.
Box 17: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information.
Box 18: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information.
Box 19: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information. Applicable to S-corporations only.
Box 20: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information. Applicable to partnerships only.
Box 21: This box is not applicable to the state; therefore, it
will be reported on this form as an item of
information. Applicable to partnerships only.
Box 22: Report any other information as required by Federal
(see federal Schedule K-1 for details).
This schedule is to be completed only if the corporation has
activities in another state and has income, losses, expenses,
or deductions which are to be allocated ("non-business")
rather than apportioned.
On lines 1a through 1i, enter any non-business income or
losses, including gains (losses) from the disposition of non-
business assets. Enter any expenses associated with such
income (loss) including indirect expenses (such as interest
expense pro-rated to "non-business" assets).
Enter in Column A each item of non-business income or loss
allocated to any state, including Mississippi, and the related
21
expenses in Column C.
Enter in Column B items allocated to Mississippi and the
related expenses in Column D.
Enter the net of Columns A and C in Column E, and the net of
Columns B and D in Column F.
PART I: NET OPERATING LOSS
Generally, when a corporation’s Mississippi sourced items of
deduction exceed its Mississippi gross income, a NOL is
generated. A NOL is to be carried by the corporation to each
of the two (2) taxable years preceding the year of the NOL,
starting with the earliest, and then to each of the twenty (20)
tax years following the year of the NOL, until the NOL is
exhausted, or the carryforward period expires. An exception is
when, on the original return filing, the corporation elects to
forgo the carryback. In this case the NOL generated is carried
forward for 20 years.
Column A: Enter the year end the net operating loss was
generated.
Column B: Enter the amount of the net operating loss (this
amount should be entered as a positive
number).
Column C: Enter the year end in which the net operating loss
deduction is taken. A net operating loss deduction
can be carried back 2 years or carried forward 20
years.
Column D: Enter the amount of net operating loss deduction
actually used to offset income.
Column E: Enter the remaining of unused net operating loss,
if any (column B minus column D and enter the
result as a positive number).
Line 1: Enter the total amount available from column B.
Line 2: Enter the amount of net operating loss deduction
currently used. Enter this amount on Form 84-122, line
31 also.
Line 3: Subtract line 2 from line 1 to compute the net operating
loss available for carryforward.
Every taxpayer, filing a composite return, with an annual income
tax liability in excess of two hundred dollars ($200) must make
estimated tax payments. These estimated tax payments must
not be less than ninety percent (90%) of the annual income tax
liability of S Corporation filing a composite return and must be
paid by submitting quarterly payments. The remaining of the
balance is due by the due date of the return. The S Corporation
that fails to file an estimated tax return and pay the tax within the
time prescribed or underestimates the required amount shall be
liable for penalty of ten percent (10%) plus interest of ½ of 1 %
per month on the underpayment of tax from the date the
payment is due until paid or the next payment due date,
whichever is earlier. Partnerships a filing composite return must
follow the Individual Income Tax rules on estimated tax
payments.
Line 1: Enter the amount of current year income tax due from
Form 84-105, line 8 (composite S Corporation).
Line 2: Multiply line 1 by 90% for S Corporation (not
applicable if using the prior year income tax liability).
Composite Partnerships must follow the Individual
Income Tax rules.
Line 3: Enter the amount of prior year income tax due.
Line 4: Enter the lesser of line 2 or line 3 (except large
corporations).
Line 5: Enter the amount of required estimated payment per
quarter by dividing line 4 by four.
Line 6: Enter the appropriate months of the S Corporation’s
tax year in column (a) through column (d).
Line 7: Enter the amount from Part 1, line 5 in each column.
The cumulative total should not be less than 90% of
the income tax due for the year (S Corporation).
Line 8: Enter the actual amount of estimated tax paid each
quarter.
Line 9: Enter in column (a) any overpayment from the
previous year. Enter any excess from the previous
quarter(s), line 9, in column (b) through column (d).
Line 10: Subtract line 7 from line 8 and line 9 and enter the
amount in column (a). If the result is negative
(overpayment), enter zero and carry the overpayment
amount (positive) in the next quarter(s), line 9, column
(b) through column (d).
Line 11: Multiply line 10 by 10%. If negative, enter zero.
Line 12: Enter the cumulative amount from line 7.
Line 13: Enter the cumulative amount of estimated taxes paid
plus any overpayment from the prior year (line 8 plus
line 9).
Line 14: Subtract line 12 from line 13. If the result is negative,
enter zero).
Line 15: Enter the interest rate in column (a) through column
(d). Compute interest at the rate of ½ of 1% per month
from the payment due date until paid or until the next
payment due date, whichever is earlier.
Line 16: Multiply line 14 by line 15.
22
Line 17: Enter the amount of penalty from line 11, column (a)
through column (d).
Line 18: Enter the amount of interest from line 16, column (a)
through column (d).
Line 19: Enter the total amount of underestimate interest and
penalty due (line 17 plus line 18) on this line and on
Form 83-105, page 1, line 14 (C Corporations) or on
Form 84-105, page 1, line 14 (S Corporations).
COMPOSITE FILING
Nonresident individuals/partners without any activity in
Mississippi other than that from the pass-through entity may
elect to be included in a composite filing. Once an individual
elects to be included in a composite filing, they must continue to
file in this manner. Underestimate, late payment, and any other
interest and penalties will be determined on the composite
income.
The net income for each electing member included in a
composite filing will generally be computed in the same manner
as in a separate individual filing except that a deduction of
$5,000.00 or 10% of the composite net income, whichever is
less, is authorized in lieu of any individual exemption and
deduction. Likewise, the tax liability is computed on the
combined income of all electing members, that is, on the
composite taxable income.
Composite members are allowed tax credits, as well as net
operating loss and capital loss deductions, provided they are
computed and tracked on an individual basis.
Example 1:
White Acre, Inc. is a multistate foreign S corporation doing
business in Mississippi. B, C, D, E and F are shareholders of the
corporation each with a 20% ownership/profits interest. B, C, D,
and E are residents of Texas, while F is a resident of this state.
B, C, and D elect to be included in a combined return.
White Acre, Inc. has the following income tax computations:
Ordinary income per federal return
150,000
Net income from rental real estate activities
20,000
Interest income
48,000
Net 1231 Gain 11,500
Section 179 expense
(17,500)
Total federal income $212,000
Add: Intangible expense with Related Member 140,000
Less: Interest on Obligations of the U.S. (40,000)
Total net income for state purposes $312,000
Less: Non-business Income (20,000)
Net income subject to apportionment $292,000
Apportionment Factor 40.00%
Mississippi Net Business Income 116,800
Non-business income allocable to MS 2,000
Mississippi net income $118,800
(This amount corresponds to Line 28, Form 84-122)
Ownership interest of B, C and D 60.00%
Composite filing MS net income 71,280
Composite filing exemption deduction (5,000)
Composite filing net operating loss carryover (20,000)
Composite filing MS net taxable income $46,280
(This amount corresponds to Line 32, Form 84-122)
Composite filing tax liability $2,044
*The difference between line 28 and line 32 is $72,520
which is entered on line 30, Form 84-122.
Schedule K Income:
Shareholder B Mississippi income 17,093
Shareholder C Mississippi income 17,093
Shareholder D Mississippi income 17,093
Shareholder E Mississippi income 23,760
Shareholder F resident income 62,400
Schedule K income for each of the shareholders B, C, and D
is determined by multiplying the Composite Filing MS Net
Taxable Income and the ratio of the respective shareholders
ownership percentage to the total ownership percentage of
composite filers ($51,280.00 * 20% / 60%). Income
attributable to composite filers is reported on form 84-131
schedule K but will not be reported on a K-1 since the income
is part of the composite filing.
Shareholder E Schedule K-1:
Schedule K income for shareholder E, a nonresident non-
composite filer, is determined by multiplying Mississippi Net
Income and the shareholder’s ownership or profits percentage.
Any net operating loss carryover would be applied at the
shareholder level in a nonresident return filing:
23
Ordinary Income
(Includes adjustment for add back of intangible exp.)
23,200
Net Income from rental real estate activities
400
Interest Income
(Includes adjustments of exempt income from treasury sec.)
640
Net 1231 gain
920
Section 179 expense
(1,400)
The rental real estate income is classified as non-business in
nature. The Mississippi allocable portion is $2,000.00 of which
shareholder E received 20% or $400.00.
Shareholder F Schedule K-1:
Schedule K income for shareholder F, a resident of this state,
is determined by multiplying Total Net Income for state
purposes and the shareholder’s ownership or profit
percentage.
Ordinary Income 58,000
(Includes adjustment for add back of intangible exp.)
Net Income from rental real estate activities 4,000
Interest Income 1,600
(Includes adjustments of exempt income from treasury sec.)
Net 1231 gain 2,300
Section 179 expense (3,500)
The rental real estate income is classified as non-business in
nature. The Mississippi allocable portion is $2,000.00 of which
shareholder E received 20% or $400.00.
Schedule K income for shareholder F, a resident of this state,
is determined by multiplying Total Net Income for state
purposes and the shareholder’s ownership or profit percentage.
24
Example 2:
Green Acre, Inc. is a multistate foreign S corporation doing
business in Mississippi. A, B, and C are nonresident
shareholders of the corporation with a 20%, 30%, and 50%
ownership/profits interest respectively (no special allocations
exist).
For tax year 2020 A, B, and C were included in a composite
return filing in which the composite Mississippi net taxable
income (after the 10% exemption deduction) is $30,000.00 with
a corresponding tax liability of $1,260.00.
On June 30 of 2021, A sold ½ of his interest to D a nonresident
shareholder and ¼ of his interest to shareholder B. For the tax
year ended 2021, D elected to be included in the composite
return filing. A, B, and C were already bound by a prior year
election to be included in the composite. For tax year 2021, the
composite Mississippi taxable income/loss was ($40,000.00).
The amount attributable to each shareholder was determined
as follows:
Shareholder
Ownership %
Holding Period
(No. of days/365 days)
Annualized
Ownership %
Composite Loss
Attributed Loss
A
20.0000%
181/365
9.9178%
($40,000.00)
($3,967.12)
A
5.0000%
184/365
2.5205%
($40,000.00)
($1,008.21)
B
30.0000%
365/365
30.0000%
($40,000.00)
($12,000.00)
B
5.0000%
184/365
2.5205%
($40,000.00)
($1,008.21)
C
50.0000%
365/365
50.0000%
($40,000.00)
($20,000.00)
D
10.0000%
184/365
5.0411%
($40,000.00)
($2,016.46)
Composite Group
100%
($40,000)
Shareholder
Prior Yr. Inc.
Current Year
Loss (2021)
Offset Against
2020 Income
Loss
Carryforward
A
$6,000.00
($4,975.33)
($4,975.33)
$0.00
B
$9,000.00
($13,008.21)
($9,000.00)
($4,008.21)
C
$15,000.00
($20,000.00)
($15,000.00)
($5,000.00)
D
$0.00
($2,016.46)
$0.00
($2,016.46)
Composite Group $30,000.00 ($40,000.00) ($28,975.33) ($11,024.67)
25
DISTRICT OFFICES
Gulf Coast District Service Office
1141 Bayview Ave., Ste. 400
Biloxi, MS 39530-1601
Ph: (228) 436-0554 Fax: (228) 436-0964
Hattiesburg District Service Office
P.O. Box 1709, Hattiesburg, MS 39403-1709
17 JM Tatum Industrial Dr, Ste. 2
Hattiesburg, MS 39401
Ph: (601) 545-1261 Fax: (601) 584-4051
Jackson District Service Office
P.O. Box 1033, Jackson, MS 39215-1033
500 Clinton Center Drive, Clinton, MS 39056
Ph: (601) 923-7300 Fax: (601) 923-7318
Meridian District Service Office
P.O. Box 5794, Meridian, MS 39302
900A Hwy. 19 South Meridian, MS 39301
Ph: (601) 483-2273 Fax: (601) 693-2473
Hernando District Service Office
2631 McIngvale Road, Ste. 116
Hernando, MS 38632
Ph: (662) 449-5150 Fax: (662) 449-5163
26
APPENDIX
COUNTY CODES
COUNTY
CODE
COUNTY
CODE
COUNTY
CODE
Adams
01
Itawamba
29
Pike
57
Alcorn
02
Jackson
30
Pontotoc
58
Amite
03
Jasper
31
Prentiss
59
Attala
04
Jefferson
32
Quitman
60
Benton
05
Jefferson-Davis
33
Rankin
61
Bolivar
06
Jones
34
Scott
62
Calhoun
07
Kemper
35
Sharkey
63
Carroll
08
Lafayette
36
Simpson
64
Chickasaw
09
Lamar
37
Smith
65
Choctaw
10
Lauderdale
38
Stone
66
Claiborne
11
Lawrence
39
Sunflower
67
Clarke
12
Leake
40
Tallahatchie
68
Clay
13
Lee
41
Tate
69
Coahoma
14
Leflore
42
Tippah
70
Copiah
15
Lincoln
43
Tishomingo
71
Covington
16
Lowndes
44
Tunica
72
Desoto
17
Madison
45
Union
73
Forrest
18
Marion
46
Walthall
74
Franklin
19
Marshall
47
Warren
75
George
20
Monroe
48
Washington
76
Greene
21
Montgomery
49
Wayne
77
Grenada
22
Neshoba
50
Webster
78
Hancock
23
Newton
51
Wilkinson
79
Harrison
24
Noxubee
52
Winston
80
Hinds
25
Oktibbeha
53
Yalobusha
81
Holmes
26
Panola
54
Yazoo
82
Humphreys
27
Pearl River
55
Out-of-State
83
Issaquena
28
Perry
56
27
TAX CREDIT CODES
CODE CREDIT CODE CREDIT
02*
Premium Retaliatory
23
Manufacturing Investment Tax Credit
03* Finance Company Privilege
24 Alternative Energy Jobs
05 Jobs Tax
25 Child Adoption
06 National or Regional Headquarters 26 Historic Structure Rehabilitation (Attach Statement)
07 Research and Development Skills
Check if requesting rebate in lieu of 10-year carryforward
08 Employer Child / Dependent Care 27* Long Term Care
09 Basic Skills Training (repealed 07/01/16) 28 New Markets
10 Reforestation
29 Biomass Energy Investment
11* Gambling License Fee
30 Wildlife Land Use
12* Financial Institution Jobs
31 Prekindergarten Credit
13 Mississippi Revenue Bond Service
32 Headquarters Relocation Credit
14 Ad Valorem Inventory
33 Veteran Employee Credit (repealed 1/01/18)
15 Export Port Charges 34 Charitable Contribution Credit
16 Insurance Guaranty 35 Foster Care Charitable Credit
17 Import Credit
36 Business Contributions to Eligible Charitable Organizations
18 Land Donation
37
Endowment Fund Charitable Credit
19 Broadband Technology
38 Inland Water Transportation
21 Brownfield Credit
50* Bank Share
22 Airport Cargo Charges
*Carryover not available
