The following is intended to provide general information concerning frequently asked questions about taxes administered by the Mississippi Department of Revenue. It is an informal interpretation of the tax law and is not intended to serve as a rule, regulation, declaratory opinion, or letter ruling. Legislation, regulations, court decisions, notices, and announcements could affect the accuracy of this information. Please refer to the Mississippi Code Annotated and the Mississippi Administrative Code for the most current version of the law and administrative procedures.
Who is required to file a corporate tax return?All corporations, associations, or entities doing business, earning income, or existing in Mississippi are required to file a corporate income and franchise tax return. Every corporation, domesticated or qualified to do business in Mississippi must file a return even if the corporation is inactive or not engaged in business.
What is franchise tax?
A franchise tax is imposed on corporations for the privilege of doing business in the State of Mississippi. Franchise tax is due annually as long as the corporation remains incorporated, domesticated, or continues to do business in Mississippi.
What is the minimum franchise tax due?
The minimum franchise tax due is $25.00.
I am not a franchise. Why do I have to file a franchise tax return?
Franchise tax is not based on whether or not a corporation is a franchise; it is a business tax imposed on every corporation for the privilege of doing business in Mississippi.
How do I compute the franchise tax due?
For tax years beginning on or after January 1, 2021, but before January 1, 2022, Franchise tax is computed at $1.75 per $1,000 (or fraction thereof ) of the value of the capital employed, in excess of $100,000 or the assessed property values in this state, whichever is greater. In no case shall the franchise tax computed be less than $25.
For tax years beginning on or after January 1, 2022, but before January 1, 2023, Franchise tax is computed at $1.50 per $1,000 (or fraction thereof ) of the value of the capital employed, in excess of $100,000 or the assessed property values in this state, whichever is greater. In no case shall the franchise tax computed be less than $25.
For tax years beginning on or after January 1, 2023, but before January 1, 2024, Franchise tax is computed at $1.25 per $1,000 (or fraction thereof ) of the value of the capital employed, in excess of $100,000 or the assessed property values in this state, whichever is greater. In no case shall the franchise tax computed be less than $25.
What is the date of the balance sheet I should use to compute my franchise tax return?
The corporation must use the ending year balance sheet to compute franchise taxes as of the accounting year end for the corporation.
How do I compute the income tax due?
Mississippi has a graduated income tax rate and is computed as follows:
0% on the first $5,000 of taxable income.
4% on the next $5,000 of taxable income.
5% on all taxable income over $10,000.
Does Mississippi have a minimum corporate income tax?
No, Mississippi does not have a minimum corporate income tax.
Does Mississippi require estimated tax payments?
Yes, every corporation and pass-through-entity (PTE) with an annual income tax liability in excess of $200.00 is required to make estimated tax payments. Payments should be made separately for each entity.
Does Mississippi offer the option to submit estimated payments electronically?
Yes, estimated payments can be submitted through Taxpayer Access Point "TAP".
What are interest and penalty charges?
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 the rate of ½% per month. The penalty imposed for failure to pay the tax when due is ½% per month not to exceed 25% in the aggregate.
Late or Non-Filer : Penalties are also 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. Such failure to file a return penalty shall not be less than $100 for income tax.
How does a company register to file Mississippi corporate income and franchise taxes?
You can register online through TAP or call 601-923-7700 to request a paper application.
Do I need to apply for a corporate identification number?
The Department of Revenue assigns account numbers to all tax accounts. When registering for a tax account, you will be asked to provide your federal employment identification number (“FEIN”) as identifying information.
Does Mississippi offer the option to submit returns and payments electronically?
Yes, returns and payments may be submitted electronically through an e-file software provider or preparer. Return, billing, audit and estimate payments can be made online through TAP as well.
What form of payment does the Mississippi Department of Revenue accept?
The Mississippi Department of Revenue accepts the following types of payments :
Where do I mail my corporate income and franchise tax return?
Department of Revenue
Jackson, MS 39225-3050
What is the due date for corporate income and franchise tax returns and pass-through tax returns?
The C Corporation income and franchise tax return is due on or before the 15th day of the 4th month following the close of the taxable year. PTE returns are due on or before the 15th day of the 3rd month following the close of the taxable year. Mississippi will follow federal return filing and extended filing due dates.
What are the requirements for filing an extension?
Taxpayers requesting an extension of time must remit the tax due with the proper Mississippi Application for Extension on or before the due date of the return to receive an automatic extension of time to file their tax returns. The authorized extension of time to file does not extend the time for payment of the income or franchise tax due. The federal extension will be accepted in lieu of the Mississippi extension if no tax liability exists on the due date of the return.
Who can discuss a corporate tax question with a Mississippi Department of Revenue representative?
General tax questions that do not address confidential tax information filed with the Mississippi Department of Revenue may be discussed with anyone. However, confidential tax information such as payments received, returns, adjustments, and extensions filed, can only be discussed with an officer of the company, the preparer, or a person who has a Mississippi Power of Attorney on file with the Department.
My corporation is incorporated in another state. Am I required to register with the Mississippi Secretary of State?
For information contact the Mississippi Secretary of State at 601-359-1633 or visit www.sos.ms.gov.
What are the steps for a corporation that is no longer doing business in Mississippi and wants to withdraw from the State?
If the corporation is registered with the Mississippi Secretary of State, then the taxpayer should withdraw or dissolve the corporation through the Secretary of State. To complete the withdrawal process, a final return must be filed with the Mississippi Department of Revenue. The taxpayer must ensure that the corporation does not have any Mississippi assets in order for the final return to be valid.
What forms are needed to amend a corporate tax return?
A complete amended return must be filed using the same forms as originally filed. The amended return check box must be checked on the form. Also, any documentation supporting the adjustments must be included with the amended return.
What is the statute of limitations for filing an amended return?
A taxpayer may amend a return filed at any time within three (3) years from the due date, or if an extension of time to file was granted, three (3) years from the extended due date.
Can I obtain a letter of “good standing”?
To obtain a Certificate of Good Standing, you would need to contact the Secretary of State’s office at (601) 359-1633. The Department of Revenue does not issue letters of good standing.
My corporation has no activity or assets, do I have to file a tax return?
Yes, every corporation domesticated or qualified to do business in Mississippi must file a return even though the corporation is inactive or does not have any Mississippi assets. A corporation remains subject to the filing requirements until such time as the corporation is officially dissolved or withdrawn through the Secretary of State.
I closed my business, should I notify the Department of Revenue?
Yes,a final return must be filed with the Mississippi Department of Revenue.
How do I file a final return?
The “Final Return” check box must be checked on the face of the corporate return filed.
What is the Department of Revenue’s position regarding nexus in Mississippi?
For Mississippi income tax purposes, nexus is defined as the operation of any enterprise or activity in Mississippi for financial profit or economic gain. For a list of examples of what constitutes nexus, see Mississippi Income Tax Regulation Title 35 Part III Subpart 08 Chapter 06. The Department has a nexus questionnaire that may be requested to determine nexus in the state.
Does having an employee in Mississippi create nexus for a company based in another State?
Yes, having an employee in Mississippi creates nexus.
What is a Mississippi combined income tax return and what are the requirements to file on a combined basis?
A Mississippi combined income tax return includes two (2) or more members of an affiliated group of corporations that are taxable in Mississippi and where one or more member(s) of the combined group is taxable in another state. While each member will compute its Mississippi taxable income (or loss) on a separate basis, the net business income (or loss) so computed for each member shall be combined to determine the net business income (or loss) of the affiliated group of corporations.
Can a combined group determine its franchise tax on a combined basis?
No, Mississippi law does not authorize combined reporting for franchise tax; therefore, separate returns are required of all subsidiary corporations qualified to do business in Mississippi or which are, in fact, doing business in Mississippi. The reporting corporation must file a return that includes its franchise tax and the combined group income (or loss). However, the reporting company in a combined group can make a payment toward the members’ franchise tax liability using the Mississippi Application for Extension Form 83-180. When making electronic payments through TAP, the payment must be made separately for each company.
For apportionment purposes, does Mississippi have a “throwback” rule?
Yes, if a state does not require a corporation to file an income tax return then those sales generated in that state's jurisdiction must be included in the Mississippi numerator of the sales factor.
What should I do if I receive a failure to file a corporate return notice?
If a return was filed, send a copy of the return and if tax paid, a copy of the front and back of the cancelled check along with and a copy of the failure to file notice to P.O. Box 1033, Jackson, MS 39215-1033. If a return was not filed, then submit return and payment (if applicable) to P.O. Box 23191, Jackson, MS 39225-3191.
Where and when do I file my corporation’s annual report?
The annual report is filed with the Mississippi Secretary of State’s office and is due by April 15th. Payments can be received electronically or mailed to: Mississippi Secretary of State; Business Service; 125 S. Congress Street, Jackson Ms 39201. For more information, please contact the Mississippi Secretary of State’s office at (601) 359-1633.
My corporation has been suspended by the Secretary of State. What steps must I take to have my corporation reinstated?
In order for a company to be reinstated, all corporate tax returns, outstanding tax liabilities, penalties, and interest must be filed and paid for all tax types with the Mississippi Department of Revenue. A tax clearance letter must also be requested and submitted to the Secretary of State in order to be reinstated. A tax clearance letter can be requested through TAP or through mail by an officer or authorized representative.
What is the basis for suspension?
Mississippi law requires the Department of Revenue to notify the Secretary of State when a taxable entity fails to pay and/or file any Franchise Tax return.
How do I file if my corporation is a Limited Liability Company (LLC)?
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 pass-through entity 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.
How do I file if my corporation is an S Corporation?
S Corporations file as a pass-through entity (PTE) for Mississippi purposes. The income tax is filed and paid by the shareholder on their Mississippi individual income tax return. However, a non-resident with no other interest in Mississippi may elect to file a PTE composite return; as a result, the income will be taxed and paid at the entity level. Once the election to file a composite return is made, the taxpayer must continue to file in this manner. All S Corporations are subject to franchise tax which is taxed and paid at the entity level.
If I am filing an amended Mississippi return to carryback a Mississippi net operating loss (“NOL”), what documentation should I include?
In making a claim for a NOL deduction, the taxpayer must file with its amended tax return a concise statement setting forth all material and pertinent facts related to the amended return; including Form 83-155 – Mississippi Corporate NOL and Capital Loss Worksheet. If more than one NOL is being utilized, the worksheet must be submitted for each loss year individually.
What do I need to provide to the Mississippi Department of Revenue if I claimed non-business or wholly passive investment income (non-Mississippi source income)?
For non-business income, F orm 83-150 must be attached to the Mississippi return stating the nature and/or source of the non-business income or loss. A statement must be included to outline the reasons that the income, loss, expenses, or deductions is being allocated. Wholly passive investment income from outside of Mississippi will be considered only with an attached detailed explanation.
What information must I provide to the Mississippi Department of Revenue if I am filing an amended return due to an Internal Revenue Service (“IRS”) audit or an amended Federal return?
If you are filing an amended return due to an IRS audit, the Revenue Agent Report (RAR) must be included with the Mississippi amended return. There is no penalty charged on the additional balance of tax due if the amended return is filed within 30 days of closing with the IRS. If you are amending your state return as a result of an amended federal return, the amended federal 1120-X must be filed with the Mississippi amended return. If the taxpayer files consolidated for federal purposes, a proforma amended federal return should be filed, as well as, the amended consolidated federal return. Furthermore, a complete amended return must be filed using the same forms as originally filed. Any other documentation supporting the adjustments must also be included with the amended return.
Did Mississippi adopt the Internal Revenue Service’s claim of right doctrine?
No, Mississippi did not adopt the IRS’s claim or right doctrine.
How are Qualified Subchapter S Subsidiaries (QSSS) treated for Mississippi income and franchise taxes purposes?
A federal election to be treated as a QSSS is considered an election for Mississippi purposes,and as such, the QSSS will be treated the same for state income and franchise tax purposes. The reporting company must file a corporate tax return on behalf of the QSSS.
Does Mississippi require bonus depreciation to be added back to taxable income?
Mississippi does not recognize the federal deduction allowed for qualified depreciable property acquired and placed in service during the tax year; therefore, the bonus depreciation deduction must be added back to Mississippi taxable income.
If I carried back a net operating loss two years for federal purposes, am I required to carryback the net operating loss two years for Mississippi purposes?
No, on Mississippi Form 83-155, the taxpayer is required to carryback the Mississippi net operating loss (NOL) two (2) years regardless of the federal election; however, a state election can be made to forego the carryback and to carryforward the NOL for state purposes. Once this election is made it cannot be revoked.
Will Mississippi follow the federal provision on NOL as amended under the Tax Cuts Act (TCJA)?
Mississippi has its own provision for NOLs and will not follow the federal provisions. For further information on the TCJA, see the Tax Effects From The Tax Cuts and Jobs Act Notice 80-19-001 dated January 28,2019 on the website.
Will Mississippi follow the IRS relating to paid preparer signature?
Yes, Mississippi will follow the IRS electronic paid preparer signature requirements.
If a company has to file a short period return for Federal purposes, does a short period return have to be filed for Mississippi?
Yes, the state return filing period must be the same as the return period filed for federal purposes.
What U.S. Government interest is deductible?
Interest on the obligations of the United States, its instrumentalities, its possessions or upon securities issued under authority of an act of Congress is wholly exempt from tax. The term "obligations of the United States" means any United States Government obligation used to finance the national debt, e. g. U.S. Treasury Securities such as notes, bonds or certificates, U.S. Treasury bills or other instruments acknowledged by the U.S. Secretary of Treasury as an obligation of the United States.
What types of taxes have to be added to federal income?
The following types of taxes must be added back to federal taxable income for Mississippi purposes: federal and state (excluding Mississippi) income taxes; any taxes based on or measured by net income; estate and inheritance taxes; gift taxes; and cigar and cigarette taxes, gasoline taxes, and sales and use taxes if not included in business gross income, or if not incurred as an item of expense in a trade or business.
Has Mississippi adopted the Uniform Division of Income for Tax Purposes Act (UDIPTA)?
No, Mississippi has not adopted UDIPTA.
Does Mississippi follow the Multistate Tax Commission regulations and policies?
No, although Mississippi is an associate member of the Multistate Tax Commission, Mississippi did not enact the Multistate Tax Compact into our State laws.
How do I obtain more information on business credits?
For more information on available incentives and credits, see the Mississippi Tax Incentives, Exemptions and Credits Booklet which can be found under the “Publications” tab and by clicking on the “Tax Incentives” link.
Does Mississippi allow federal income tax as a business expense deduction?
No, Mississippi does not allow federal income tax as a business expense deduction.
What are the filing requirements for a corporation operating in Mississippi as a partner in a partnership?
Every partnership, domestic or foreign, deriving income from property owned within the state of Mississippi, or business, trade, profession or occupation, carried on within the state shall make a return for each taxable year. The individual partners are subject to tax upon their distributive share of the partnership net income (loss). The partnership net income (loss) shall be computed in the same manner and on the same basis as the net income (loss) of an individual. Deductions for contributions or gifts are allowed to the partners on their individual return.
How does my nonprofit organization obtain tax exempt status?
Tax exempt status, i.e. 501 (c) (3), is obtained through the IRS.