Mississippi Code 1972 (2023) › Title 27 - TAXATION AND FINANCE (§§ 27-1-1 — 27-117-15) › Chapter 7 - INCOME TAX AND WITHHOLDING (§§ 27-7-1 — 27-7-NEW-002) › Article 1 - INCOME TAX (§§ 27-7-1 — 27-7-109) › Section 27-7-26 - Election by partnership, S corporation or similar pass-through entity to be taxed as electing pass-through entity

(1)
(a)
For calendar year 2022, and for each calendar year thereafter, any partnership, S corporation or similar pass-through entity may elect to be taxed as an electing pass-through entity and pay the tax imposed under this chapter at the entity level. For the purposes of this section, the term "electing pass-through entity" means a partnership, S corporation or similar pass-through entity that has made an election pursuant to this section.
(b)
A partnership, S corporation or similar pass-through entity desiring to be taxed as an electing pass-through entity shall submit the appropriate form to the department at any time during the tax year for which the entity elects to be taxed as an electing pass-through entity, or by the due date of the return for that tax year, or by the date such return is filed, whichever is latest. This election shall be binding for that taxable year and all taxable years thereafter and shall not be revoked unless the electing pass-through entity submits the appropriate form to the department at any time during a subsequent taxable year for which the entity elects to no longer be taxed as an electing pass-through entity, or by the due date of the return for that tax year, or by the date such return is filed, whichever is latest. Both the election to become an electing pass-through entity and the revocation of that election shall be accomplished by a vote satisfying such threshold required for taking official action as may be specified within the entity's governing documents, within the time prescribed in this subsection. If the entity's governing documents do not contain any such provisions governing the approval of official actions, such election shall be accomplished by a vote by or written consent of the owners, members, partners or shareholders holding greater than fifty percent (50%) of the voting control of the entity, and also, if the entity has a governing body, by a vote by or written consent of the members of the governing body, within the time prescribed in this subsection.
(c)
Each owner, member, partner or shareholder of an electing pass-through entity shall report his or her pro rata or distributive share of the income of the electing pass-through entity, and such share shall be used in computing the taxpayer's gross income tax liability. Each owner, member, partner or shareholder of an electing pass-through entity shall be allowed a credit against the taxes imposed under this chapter in an amount equal to his or her pro rata or distributive share of tax paid by the electing pass-through entity with respect to the corresponding taxable year. Any additional income tax credits generated by the electing pass-through entity shall pass through to the owners, members, partners or shareholders on a pro-rata basis and may be claimed on the returns of those taxpayers. In the event an owner's, member's, partner's or shareholder's aggregate credits shall exceed his or her income tax liability, such excess shall be carried forward as an overpayment or refunded at the election of such person. Any carryforward limitations applicable to credits generated by the electing pass-through entity, other than the credit provided by this section for income taxes paid by the electing pass-through entity, shall apply at the owner, member, partner or shareholder level.
(2)
The adjusted basis of the owners, members or partners of an electing pass-through entity in their ownership interests in the electing pass-through entity shall be calculated without regard to the election under this section.
Amended by Laws, 2023, ch. 440, HB 1668,§ 1, eff. 1/1/2023, and applicable to any income tax returns the original due date of which are on or after such date.
Added by Laws, 2022, ch. 416, HB 1691,§ 1, eff. 1/1/2022.