Mississippi Code 1972 (2023) › Title 27 - TAXATION AND FINANCE (§§ 27-1-1 — 27-117-15) › Chapter 65 - SALES TAX (§§ 27-65-1 — 27-65-243) › IN GENERAL (§§ 27-65-1 — 27-65-111) › Section 27-65-21 - Contracting, etc

(1)
(a)
(i)
Upon every person engaging or continuing in this state in the business of contracting or performing a contract or engaging in any of the activities, or similar activities, listed below for a price, commission, fee or wage, there is hereby levied, assessed and shall be collected a tax equal to three and one-half percent (3-1/2%) of the total contract price or compensation received, including all charges related to the contract such as finance charges and late charges, from constructing, building, erecting, repairing, grading, excavating, drilling, exploring, testing or adding to any building, highway, street, sidewalk, bridge, culvert, sewer, irrigation or water system, drainage or dredging system, levee or levee system or any part thereof, railway, reservoir, dam, power plant, electrical system, air-conditioning system, heating system, transmission line, pipeline, tower, dock, storage tank, wharf, excavation, grading, water well, any other improvement or structure or any part thereof when the compensation received exceeds Ten Thousand Dollars ($10,000.00). Such activities shall not include constructing, repairing or adding to property which retains its identity as personal property. The tax imposed in this section is levied upon the prime contractor and shall be paid by him.
(ii)
Amounts included in the contract price or compensation received representing the sale of manufacturing or processing machinery for a manufacturer or custom processor shall be taxed at the rate of one and one-half percent (1-1/2%) in lieu of the three and one-half percent (3-1/2%).
(b)
The following shall be excluded from the tax levied by this section:
(i)
The contract price or compensation received for constructing, building, erecting, repairing or adding to any building, electrical system, air-conditioning system, heating system or any other improvement or structure which is used for or primarily in connection with a residence or dwelling place for human beings. Such residences shall include homes, mobile homes, summer cottages, fishing and hunting camp buildings and similar buildings, but shall not include apartment buildings, condominiums, hotels, motels, hospitals, nursing or retirement homes, tourist cottages or other commercial establishments.
(ii)
The portion of the total contract price attributable to design or engineering services if:
1.
The total contract price for the project exceeds the sum of One Hundred Million Dollars ($100,000,000.00); or
2.
The engineering services are performed by a professional engineer as defined in Section
73-13-3
, who is the general or prime contractor.
(iii)
The contract price or compensation received to restore, repair or replace a utility distribution or transmission system that has been damaged due to ice storm, hurricane, flood, tornado, wind, earthquake or other natural disaster if such restoration, repair or replacement is performed by the entity providing the service at its cost.
(iv)
The contract price or compensation received for constructing, building, erecting, repairing or adding to any building, facility or structure located at any refinery as defined in Section
27-65-24
.
(c)
Sales of materials and services for use in the activities hereby excluded from taxes imposed by this section, except services used in activities excluded pursuant to paragraph (b)(iii) of this subsection, shall be subject to taxes imposed by other sections in this chapter.
(2)
[Deleted]
(3)
When the work to be performed under any contract is sublet by the prime contractor to different persons, or in separate contracts to the same persons, each such subcontractor performing any part of said work shall be liable for the amount of the tax which accrues on account of the work performed by such person when the tax heretofore imposed has not been paid upon the whole contract by the prime contractor.
When a person engaged in any business on which a tax is levied in Section
27-65-23
, also qualifies as a contractor, and contracts with the owner of any project to perform any services in excess of Ten Thousand Dollars ($10,000.00) herein taxed, such person shall pay the tax imposed by this section in lieu of the tax imposed by Section
27-65-23
.
Any person entering into any contract over Seventy-five Thousand Dollars ($75,000.00) as defined in this section shall, before beginning the performance of such contract or contracts, either pay the contractors' tax in advance, together with any use taxes due under Section
27-67-5
, or execute and file with the commissioner a good and valid bond in a surety company authorized to do business in this state, or with sufficient sureties to be approved by the commissioner conditioned that all taxes which may accrue to the State of Mississippi under this chapter, or under Section
27-67-5
and Section
27-7-5
, will be paid when due. Such bonds shall be either (a) "job bonds" which guarantee payment when due of the aforesaid taxes resulting from performance of a specified job or activity regardless of date of completion; or (b) "blanket bonds" which guarantee payment when due of the aforesaid taxes resulting from performance of all jobs or activities taxable under this section begun during the period specified therein, regardless of date of completion. The payments of the taxes due or the execution and filing of a surety bond shall be a condition precedent to the commencing work on any contract taxed hereunder. Provided, that when any bond is filed in lieu of the prepayment of the tax under this section, that the tax shall be payable monthly on the amount received during the previous month, and any use taxes due shall be payable on or before the twentieth day of the month following the month in which the property is brought into Mississippi.
Any person failing either to execute any bond herein provided, or to pay the taxes in advance, before beginning the performance of any contract shall be denied the right to perform such contract until he complies with such requirements, and the commissioner is hereby authorized to proceed either under Section
27-65-59
, under Section
27-65-61
or by injunction to prevent any activity in the performance of such contract until either a satisfactory bond is executed and filed, or all taxes are paid in advance, and a temporary injunction enjoining the execution of such contract shall be granted without notice by any judge or chancellor now authorized by law to grant injunctions.
Any person liable for a tax under this section may apply for and obtain a material purchase certificate from the commissioner which may entitle the holder to purchase materials and services that are to become a component part of the structure to be erected or repaired with no tax due. Provided, that the contractor applying for the contractor's material purchase certificate shall furnish the Department of Revenue a list of all work sublet to others, indicating the amount of work to be performed, and the names and addresses of each subcontractor.
Codes, 1942, § 10110; Laws, 1934, ch. 119; Laws, 1936, ch. 158; Laws, 1942, ch. 122; Laws, 1944, ch. 129, § 3; Laws, 1950, ch. 530, § 2; Laws, 1955, Ex Sess, ch. 109, § 11; Laws, 1956, ch. 420, § 1; Laws, 1958, ch. 574, § 8; Laws, 1962, ch. 598, §§ 1, 3; Laws, 1964, ch. 532, § 2; Laws, 1968, ch. 588, § 5; Laws, 1982, ch. 442, § 1; Laws, 1984, ch. 458, § 1; Laws, 1985, ch. 351, § 3; Laws, 1987, ch. 432; Laws, 1996, ch. 503, § 2; Laws, 1997, ch. 320, § 1; Laws, 2005, ch. 434, § 1; Laws, 2007, ch. 442, § 1; Laws, 2010, ch. 449, § 3; Laws, 2011, ch. 452, § 2, eff. 7/1/2011.
Amended by Laws, 2024, ch. 482, HB 1764,§ 2, eff. 7/1/2024.
Amended by Laws, 2015, ch. 440, SB 2832, 1, eff. 7/1/2015.
Amended by Laws, 2014, ch. 472, HB 260, 2, eff. 7/1/2014.