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 27-7-37 - Corporate returns

(1)
Every corporation subject to taxation shall make a separate return, stating specifically the items of its gross income and the deductions and credits allowed by this article. The return shall be signed by either the president, vice president, secretary or treasurer.
(2)
(a)
(i)
Two (2) or more members of an affiliated group of corporations, each taxable in Mississippi, may elect to file a combined income tax return. Corporations electing to file combined returns under this section shall determine the Mississippi net business income (or loss) on an individual corporate member basis as required in Section
27-7-23
and, if applicable, Sections
27-7-24
,
27-7-24.1
,
27-7-24.3
,
27-7-24.5
and
27-7-24.7
. The Mississippi net business income (or loss) so computed for each individual member shall be combined to determine the Mississippi net business income (or loss) of the combined group of affiliated corporations. To the amount so determined shall be added nonbusiness income of the combined members directly allocable to Mississippi to determine Mississippi taxable income.
(ii)
The commissioner may require a corporation taxable under this article that is affiliated with one or more corporations that are not taxable under this article to file a combined return with the affiliated corporation or corporations if he establishes by preponderance of the evidence that the intercompany transactions of such taxable corporation have resulted in the shifting of taxable income from itself to another member or members of its affiliated group not subject to tax under this article. Also, the commissioner may require a group of affiliated corporations taxable under this article to file a combined return if he establishes by preponderance of the evidence that the intercompany transactions of such corporations have resulted in the shifting of taxable income between members of the included affiliated group. In the event that such a combined return is required, the net income or loss of each member of the group required to be combined, shall be combined pursuant to regulations prescribed by the commissioner to determine the total combined taxable income and the Mississippi taxable income of the group. The tax imposed by this article shall be computed and assessed upon the Mississippi taxable income of the combined group which shall be treated as the taxpayer.
(iii)
The commissioner shall not require the filing of a combined return pursuant to the authority granted under subparagraph (ii) of this paragraph until regulations shall have been enacted specifying the criteria and circumstances that form the basis for meeting the preponderance of the evidence standard required to support a conclusion that intercompany transactions of such taxable corporation have resulted in the improper shifting of taxable income from a taxpayer to another member or members of its affiliated group not subject to tax under this article, or that the intercompany transactions of such corporations have resulted in the improper shifting of taxable income between members of the included affiliated group.
(iv)
The commissioner shall be prohibited from assessing any penalties related to a deficiency arising from the exercise of the authority granted under subparagraph (ii) of this paragraph unless the commissioner shall establish by preponderance of the evidence that the taxpayer's filing method was without reasonable basis or the intercompany transactions at issue lacked any material nontax business purpose.
(b)
The privilege to file combined returns shall be limited to members of an affiliated group of corporations which are subject to taxation under the provisions of this article. The privilege of making a combined return may be exercised only if all corporations subject to taxation under this article which were members of the affiliated group at any time during the taxable year consent to a combined return prior to the last day prescribed by law for the filing of such return. The making of a combined return shall be considered as such consent. In the case of a taxable corporation which is a member of the affiliated group for a fractional part of the year, the combined return shall include the income of such corporation for such part of the year as it is a member of the affiliated group.
(c)
The commissioner shall prescribe such regulations as he may deem necessary in order that the tax liability of any affiliated group of corporations making a combined return and of each corporation in the group, both during and after the period of affiliation, may be returned, determined, computed, assessed, collected and adjusted, in such manner as clearly to reflect the income tax liability and the various factors necessary for the determination of such liability, and in order to prevent avoidance of such tax liability.
(d)
As used in this article, the term "affiliated group" means one or more corporations connected through stock ownership with a common parent corporation where at least eighty percent (80%) of the voting power of all classes of stock and at least eighty percent (80%) of each class of the nonvoting stock of each of the member corporations, except the common parent corporation, is owned directly by one or more of the other member corporations; and the common parent corporation owns directly stock possessing at least eighty percent (80%) of the voting power of all classes of stock and at least eighty percent (80%) of each class of the nonvoting stock of at least one (1) of the other member corporations. As used in this subsection, the term "stock" does not include nonvoting stock which is limited and preferred as to dividends.
(e)
If a corporation elects or is required to file returns on a combined basis, all subsequent returns shall be made upon the same basis unless permission to change the basis is granted by the commissioner, or unless the commissioner requires a change in the basis.
(3)
If any foreign corporation has no office or place of business in this state but has an agent in this state, the returns shall be made by the agent.
(4)
In the case of a receiver, trustee in bankruptcy, or assignees operating the property or business of a corporation, such receiver, trustee or assignee shall make returns for such corporation in the same manner and form as corporations are required to make returns; and any tax due on the basis of such returns shall be collected in the same manner as if collected from the corporation of whose business or property they have custody or control.
(5)
A corporation required to include the activity of a disregarded entity for federal income tax purposes shall do likewise for the purpose of computing income for this state.
(6)
An out-of-state business as defined in Section
27-113-5
shall be exempt from the requirements of this section to the extent provided for in Section
27-113-7
.
Codes, 1942, § 9220-19; Laws, 1934, ch. 120; Laws, 1952, ch. 402, § 18; Laws, 1978, ch. 410, § 2; Laws, 1981, ch. 406, § 1; Laws, 1996, ch. 441, § 70; Laws, 2004, ch. 371, § 1; Laws, 2008, ch. 433, § 3, eff. 7/1/2008.
Amended by Laws, 2015, ch. 420, SB 2762, 7, eff. 3/30/2015.
Amended by Laws, 2014, ch. 476, HB 799, 3, eff. 1/1/2015.