reglab/statecodes huggingface dataset:
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 01 - Liquidations and Distributions › Section 35-3-08-01-103 - Stock Sale Treated as Asset Sale

Current through June 25, 2024
Section
					 27-7-9(j)4
					 requires a corporation or other entity involved in restructuring, reorganizing,
					 distributing assets or profits or changing ownership that results in
					 adjustments to its asset basis to report any gain in that year on any such
					 transaction when the transaction involves assets owned or used in this state. A
					 corporation that transfers Mississippi assets to a subsidiary corporation in
					 exchange for stock of such subsidiary and within two years of such transfer
					 sells stock shall recognize such sale of stock of such subsidiary as a sale of
					 Mississippi assets. If the sale of such stock occurs after such two year period
					 but results in avoidance of Mississippi tax then the sale will be treated as a
					 sale of Mississippi assets. Otherwise, a sale of stock will be subject to other
					 provisions of the Mississippi law.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 01 - Liquidations and Distributions › Section 35-3-08-01-104 - Liquidation of a Subsidiary Into a Parent

Current through June 25, 2024
1. Section
				  27-7-9(j)1
				  provides that no gain shall be recognized if a subsidiary liquidates into a
				  parent and the parent carries the assets at the same bases as were carried on
				  the books of the subsidiary. The non-recognition of gain in this section refers
				  to any gain on distribution by the subsidiary. Therefore, there would be no
				  gain by the subsidiary.
2. Section
				  27-7-9(l)
				  requires shareholders to recognize gain on the redemption of stock including
				  partial and complete liquidations, subject to subsection j(1). The parent is
				  required to record the assets of a subsection j(1) liquidation at the same
				  basis that the subsidiary had prior to liquidation. Subsection j(1) would defer
				  any gain on the difference between the fair market value of the assets and the
				  basis which the parent used to record the assets on its books (carryover
				  basis). Any gain on the difference between the basis of the stock of the
				  subsidiary and the basis of the assets from the subsidiary would be recognized
				  and reported by the parent.
3. If
				  the basis in the stock exceeds the basis in assets, a loss may not be
				  recognized, but the basis in the assets may be increased to equal the basis in
				  the stock.
4. Under no
				  circumstances is a gain on a liquidation, transfer of assets, distribution of
				  assets or a reorganization forgiven.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 01 - Liquidations and Distributions › Section 35-3-08-01-105 - Spin-Offs

Current through June 25, 2024
1. A Section 355 Distribution is a
				  distribution of voting stock (at least 80% of voting stock) to the shareholder
				  corporation of the distributing parent corporation (i.e. a spin-off). To
				  qualify under Section 355, the corporation must have been engaged in active
				  business for five years preceding the spin-off and there must be a continuing
				  active business after spin-off. The transaction cannot be used principally as a
				  device for the distribution of earnings and profits. There must be a germane
				  business reason beyond the avoidance of tax for the distribution.
2. Section
				  27-7-9(j)3
				  provides that no gain shall be recognized on a distribution to a stockholder of
				  a corporation if such gain would not be recognized to such stockholder for
				  Federal income tax purposes under the provisions of Section 355 of the Federal
				  Internal Revenue Code. The shareholder would take the same basis as the basis
				  of the distributing corporation prior to distribution, plus any gain recognized
				  and reported by the distributing corporation.
3. The distributing corporation in a 355
				  Distribution must report the gain on the distribution. The gain would be the
				  difference between the fair market value of the stock and the basis of the
				  stock immediately prior to any adjustment in contemplation of distribution of
				  the stock. Corporations with one hundred percent (100%) of their income
				  reportable to Mississippi should report the gain in full to Mississippi.
				  Multistate corporations would determine their gain according to the method of
				  reporting the dividend income from such subsidiary to Mississippi. For example:
				  A multistate corporation which has a unitary subsidiary that would apportion
				  dividends from this subsidiary to Mississippi would also apportion the gain on
				  the distribution to Mississippi. Allocated dividends would require allocation
				  of gain from the stock of the subsidiary.
4. A corporation which makes a 355
				  Distribution and is included in a combined return for Mississippi, as provided
				  by Section
				  27-7-37 of the
				  Mississippi Code, would also be required to report the gain on distribution
				  whether or not the parent's shareholder is a part of the combined group before
				  or after the distribution.
5. No
				  credit is allowed to the shareholder corporation receiving the distribution
				  unless the shareholder must report the gain for Federal purposes. If the
				  shareholder is required to report the gain for Federal purposes, the same
				  requirement would exist for Mississippi purposes.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 01 - Liquidations and Distributions › Section 35-3-08-01-106 - Collapsible Corporations

Current through June 25, 2024
The entire gain from: (1) the actual sale or exchange of
					 stock of a collapsible corporation, (2) amounts distributed in complete or
					 partial liquidation of a collapsible corporation which are treated as payment
					 in exchange for stock, and (3) a distribution made by a collapsible
					 corporation, which is treated in the same manner as a gain from the sale or
					 exchange of property, shall be considered as gain from the sale or exchange of
					 property and such gain shall be treated as ordinary income.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 01 - Liquidations and Distributions › Section 35-3-08-01-107 - Partial liquidation defined

Current through June 25, 2024
A distribution is treated as in partial liquidation of a
					 corporation if:
1. The distribution is
				  one of a series of distributions in redemption of all the stock of the
				  corporation pursuant to a plan of complete liquidation, or
2. The distribution is:
a. not essentially equivalent to a
				  dividend,
b. in redemption of a
				  part of the stock of the corporation pursuant to a plan, and
c. occurs within the taxable year in which
				  the plan is adopted or within the succeeding taxable income.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 02 - Reorganizations › Section 35-3-08-02-100

Current through June 25, 2024
The Commissioner will follow Federal Rules, Regulations,
					 and Revenue Procedures relating to Reorganizations as are not deemed contrary
					 to the context and intent of Mississippi Law.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-100 - Definitions

Current through June 25, 2024
As they pertain to this regulation:
1. "Small business corporation" or "S
				  corporation" means a domestic corporation which is not an ineligible
				  corporation and does not: a. have more than 35 shareholders, b. have as a
				  shareholder a person who is not an individual, other than an estate and certain
				  trusts, c. have a nonresident alien as a shareholder, and d. have more than one
				  (1) class of stock.
2. "Electing
				  small business corporation" means with respect to any taxable year, a small
				  business corporation for which an election under section 1362 (a), I. R. C., is
				  in effect for such year.
3. For
				  purposes of this regulation, the term "domestic corporation" means a
				  corporation created or organized in the United States or under the law of the
				  United States or of any State or Territory.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-101 - Conformity with Internal Revenue Code

Current through June 25, 2024
The provisions of section 1361 et seq. (S corporation) of
					 the Internal Revenue Code with respect to definitions, elections,
					 qualifications, special rules, etc., not in direct conflict with the provisions
					 of the Mississippi Income Tax Law of 1952, as amended, shall have full effect
					 and force as to the administration of this regulation.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-102 - Election by S corporation › Section 35-3-08-03-102.01

Current through June 25, 2024
Termination of an election for Federal purposes shall
						automatically terminate the election for Mississippi
						purposes.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-103 - Corporation undistributed taxable income taxed to shareholders

Current through June 25, 2024
1. Inclusion in gross income. Each person who
				  is a shareholder during the year of an electing S corporation shall include in
				  his gross income, for his taxable year in which or with which the taxable year
				  of the corporation ends, the pro rata amount he would have received as income
				  (or deduction) by the corporation as determined below.
2. Determination of amount included by
				  shareholder. A shareholder's pro rata share of an S corporation item of income
				  (or deduction) is generally determined by:
a.
				  assigning an equal portion of each day of the corporation's taxable year (1/365
				  except for a leap year or a short taxable year),
b. allocating that daily portion pro rata
				  among the shares outstanding on each such day, and
c. totaling the shareholder's daily portion
				  of the item as determined under (a) and (b) above.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-104 - Net Operating losses involving S corporations

Current through June 25, 2024
1. Deduction not allowed to corporation. An S
				  corporation is not allowed a deduction for a net operating loss. The net
				  operating loss is passed through to the shareholders subject to the following
				  restrictions.
2. Limitation on
				  deduction for shareholders.
a. The amount of
				  the net operating loss of the S corporation for any taxable year which may be
				  deducted by any shareholder shall not exceed the sum of:
i. The adjusted basis of the shareholder's
				  stock in the S corporation, and
ii.
				  The adjusted basis of any indebtedness of the corporation to the shareholder.
iii. If a shareholder's pro rata
				  share of the corporation's net operating loss exceeds the limitation imposed,
				  such excess is allowable as a net operating loss carryover or carryback as
				  allowed under Section
				  27-7-17.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-105 - Special rules application to capital gains

Current through June 25, 2024
Mississippi Law does not conform with Federal Law with
					 respect to the tax treatment of capital gains, therefore, the amount includable
					 by a shareholder in gross income from an S corporation during any taxable year
					 of such corporation shall be treated as ordinary income.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-106 - Adjustments to the basis of stock of, and indebtedness owing shareholders

Current through June 25, 2024
1.
Increase in basis of
				  stock
. The basis of shareholder's stock in an S corporation is
				  increased by the amount required to be included in the gross income of such
				  shareholder, but only to the extent to which such amount is actually included
				  in his gross income on his income tax return, increased or decreased by any
				  adjustment of such amount in any redetermination of the shareholder's tax
				  liability. This increase in basis will affect only those shares of stock of the
				  S corporation which the shareholder owned at the end of the corporation's
				  taxable year and is apportioned in equal amounts to each share. The increase is
				  effective as of such last day, and survives a termination of the corporation's
				  election.
2.
Reduction
				  in basis of stock
. The basis of a shareholder's stock in an S
				  corporation is reduced by an amount equal to his portion of the corporation's
				  net operating loss for any taxable year attributable to such stock. However,
				  the basis of such stock is not to be reduced below zero.
3.
Reduction in basis of
				  indebtedness
. The basis of any indebtedness of an S corporation to
				  a shareholder is reduced by an amount equal to the shareholder's portion of the
				  corporation's net operating loss for the taxable year, but only to the extent
				  that such amount exceeds the basis of the shareholder's stock in the
				  corporation. Thus, the amount of the shareholder's portion of the net operating
				  loss is first applied in reduction of the basis of his stock in accordance with
				  the rules of subparagraph (2) above, and only the remainder, if any, reduces
				  the basis of the indebtedness.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-107 - Special rules

Current through June 25, 2024
The Commissioner will follow the provisions of Section
					 1371, IRC, and Regulations thereunder, with respect to the special rules
					 applicable to earnings and profits of S corporations.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-108 - Special tax (Federal) on S corporations › Section 35-3-08-03-108.01

Current through June 25, 2024
Mississippi Law does not have a special tax on passive
						investment income, therefore, the pass-through income to shareholders shall not
						be reduced by the amount assessed at the federal level, and will not follow the
						provisions of Section 1375 in this respect.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-109 - Liability of corporation

Current through June 25, 2024
If any of the shareholders of the S corporation are
					 nonresidents of the State of Mississippi, the corporation shall be subject to
					 Mississippi income tax on the part of the corporate income allocable to the
					 share of stock owned by the nonresident shareholders unless the corporation
					 files with its Mississippi return for the taxable year an agreement executed by
					 each nonresident shareholder wherein said shareholder agrees to pay Mississippi
					 income tax on his proportionate part of the corporation's Mississippi taxable
					 income. Nonresident agreements shall be executed by completing Form 62-381.
					 Failure to secure an agreement from nonresident shareholders for the taxable
					 year or failure of the nonresident shareholder to file a timely return and pay
					 the tax when due, even in cases where Form 62-381 is executed, shall render the
					 S corporation liable for the tax due.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-110 - Liability of shareholders › Section 35-3-08-03-110.01

Current through June 25, 2024
If the corporation's taxable income is from sources withi
						n and without Mississippi and would have been apportioned or allocated partly
						within and partly without Mississippi by the corporation, only that part of
						taxable income of the corporation assignable to Mississippi shall be considered
						in reporting distribut ions to nonresidents.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-111 - Resident shareholders in nonresident (foreign) S corporation › Section 35-3-08-03-111.01

Current through June 25, 2024
If the foreign state in which the taxable income of an S
						corporation is earned or realized has not, for the corporation's taxable year,
						adopted the Federal tax treatment of an S corporation, the Mississippi
						resident's pro rata share of taxable income (or loss) of the S corporation
						shall be excluded from the gross income of the Mississippi resident. In such
						case, the Mississippi resident must report only dividends or other income
						actually distributed to such resident by the corporation in the taxable year of
						the resident.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.01

Current through June 25, 2024
An S corporation is allowed to file a composite return on
						behalf of its shareholders in very limited circumstances. A composite return is
						a return in which an S corporation pays the income tax due for some, or all, of
						its shareholders. The only shareholders who are eligible to be included in the
						composite return are nonresident shareholders without any activity in
						Mississippi other than that from the S corporation.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.02

Current through June 25, 2024
Resident shareholders and nonresident shareholders with
						other activity in Mississippi cannot be included in a composite return. Each of
						these shareholders must file his own return.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.03

Current through June 25, 2024
If a composite return is filed, the S corporation return
						is completed like any other S corporation return, but an additional schedule is
						attached listing the shareholder's identification or social security number and
						the shareholder's distribution that is to be included in the composite return.
						The S corporation then pays the tax on this income at the regular corporate
						rate. If the S corporation wants a deduction for the individual's personal
						exemptions and standard deductions, then instead of paying tax on the corporate
						return, the composite return income is reported on one nonresident individual
						return under the S corporations name and identification number. On this return,
						the corporation is allowed to deduct 10% of the adjusted gross income of the
						nonresident individuals reported on this return up to a maximum of $5,000 per
						composite return.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.04

Current through June 25, 2024
Once an S corporation begins filing a composite return,
						it must continue unless permission to change is granted in writing by the
						Commissioner.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.05

Current through June 25, 2024
An S corporation is not relieved from the payment of
						franchise tax. Schedules in Form 62-300 relating to such levy must be completed
						and made a part of the return. The franchise tax, plus any penalty, interest,
						or applicable income tax, are due and payable in full by the original due date
						of the return.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 03 - Election of Certain Small Business Corporations-(S Corporations) › Section 35-3-08-03-112 - Filing requirements › Section 35-3-08-03-112.06

Current through June 25, 2024
An income tax credit allowed to an S corporation may be
						passed on to the shareholders but may only be used to offset and reduce tax on
						income of the S corporation allocated to the shareholders. The shareholders are
						not allowed to receive a greater benefit than the corporation would have
						received, if the corporation were taxable.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 04 - Charitable Contributions-Corporation › Section 35-3-08-04-100

Current through June 25, 2024
The deduction by a corporation in any taxable year for
					 charitable contributions is limited to twenty percent (20%) of its taxable
					 income for the year, computed without regard to the deduction for charitable
					 contributions. Mississippi Law does not conform with Federal Law relative to
					 the percentage limitation on contributions by corporations, or with the
					 definition of a charitable contribution by a corporation. A deduction, subject
					 to the limitation, is allowed only with respect to contributions to
					 corporations, organizations, associations or institutions, including community
					 chest funds, foundations and trusts created solely and exclusively for
					 religious, charitable, scientific or educational purposes, or for the
					 prevention of cruelty to children or animals, no part of the net earnings of
					 which inure to the benefit of any private stockholder or
					 individual.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 05 - Foreign Sales Corporations (FSC's) › Section 35-3-08-05-100

Current through June 25, 2024
Mississippi does not follow Federal Law or Regulations as
					 they relate to Foreign Sales Corporations except as noted below. For
					 Mississippi purposes an FSC is treated as a normal corporation. Any sale to an
					 FSC must be at arms-length. Any expense reimbursement must be reasonable based
					 on the service performed or the expense incurred by the FSC.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 05 - Foreign Sales Corporations (FSC's) › Section 35-3-08-05-101

Current through June 25, 2024
Instead of adjusting all transactions to an arms-length
					 basis, the Commissioner may allow the FSC to consolidate with the parent or
					 other corporation if the result clearly reflects Mississippi income. This will
					 be decided on a case by case and a year to year basis.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 05 - Foreign Sales Corporations (FSC's) › Section 35-3-08-05-102

Current through June 25, 2024
Because of the two preceding paragraphs, dividends paid by
					 the FSC to the parent will not be included in apportionable income of the
					 parent.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 05 - Foreign Sales Corporations (FSC's) › Section 35-3-08-05-103

Current through June 25, 2024
Mississippi does follow Federal tax treatment in
					 connection with non-recognition of gain on the transfer of assets from a
					 Domestic International Sales Corporation (DISC) to a Foreign Sales Corporation
					 (FSC).
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-201 - Corporations Required to File › Section 35-3-08-06-201.01 - Every domestic corporation (those chartered in Mississippi) is subject to the income tax levy and is required to file annual income tax returns unless such corporations is specifically exempt from tax within the purview of Code Section

Current through June 25, 2024
Every domestic corporation (those chartered in
						Mississippi) is subject to the income tax levy and is required to file annual
						income tax returns unless such corporations is specifically exempt from tax
						within the purview of Code Section
						27-7-29.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-201 - Corporations Required to File › Section 35-3-08-06-201.02

Current through June 25, 2024
Every foreign corporation (those chartered outside
						Mississippi) which has obtained a certificate of authority from the Secretary
						of State to do business in Mississippi, or which is in fact doing business, as
						defined, in Mississippi, regardless of qualifications, is subject to the income
						tax levy and is required to file annual income tax returns unless corporation
						is specifically exempt from tax within the purview of Code Section
						27-7-29.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-201 - Corporations Required to File › Section 35-3-08-06-201.03

Current through June 25, 2024
All corporations subject to the filing requirements of
						the paragraphs above must file an income tax return for each year including a
						tax year or years in which the corporation was inactive, did not earn any net
						income, or operated a part of the year. An annual return must be filed until
						the corporation, foreign or domestic, is legally withdrawn or
						dissolved.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-202 - Definitions

Current through June 25, 2024
202.01 Commercial Domicile. "Commercial
				  domicile" means the principal place from which the trade or business of the
				  taxpayer is directed or managed.
202.02
Taxpayer
.
				  "Taxpayer" means any individual, partnership, corporation, association, trust
				  or estate, whose income is, in whole or in part, subject to a tax imposed by
				  the Mississippi Income Tax Law of 1952, as amended, being Section
				  27-7-1 et
				  seq., Mississippi Code of 1972, or any such person who is subject to the filing
				  requirements of this Regulation.
202.03
Apportionment
. "Apportionment" refers to the division
				  of business income between states by the use of a formula containing
				  apportionment factors.
202.04
Allocation
. "Allocation" refers to the assignment of
				  income to a particular state.
202.05
Business
				  Activity
. "Business activity" refers to the transactions and
				  activity occurring in the regular course of a particular trade or business of a
				  taxpayer.
202.06
Taxable In Another State
. The term "taxable in another
				  state", for the purposes of this Regulation, shall mean that the taxpayer is
				  subject to net income tax or any tax measured by net income; or the other state
				  has jurisdiction to subject the taxpayer for tax measured by net income
				  regardless of whether, in fact, that state exercises such jurisdiction. The
				  definition for "subject to" income tax in another state will be determined by
				  using the definition for "doing business" defined above and in section 203
				  below and in the following paragraph.
1. A
				  taxpayer is "subject to" one of the taxes specified in the paragraph above only
				  if it carries on business activities in another state. If the taxpayer
				  voluntarily files and pays one or more of such taxes when not required to do so
				  by the laws of that state or pays a minimum tax or fee for qualification,
				  organization, or for the privilege of doing business in that state, but does
				  not actually engage in business activities in that state, or does actually
				  engage in some activity, not sufficient for nexus, and the minimum tax or fees
				  bears no relation to the corporation's activities within such state, the
				  taxpayer is not "subject to" one of the specified taxes and is therefore not
				  "taxable" in another state.
2.
				  Jurisdiction to tax is not present when the state is prohibited from imposing
				  the tax by reason of the provisions of Public Law 86-272,15 U.S.C.A. Sections
				  381 - 385.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-203 - Nexus › Section 35-3-08-06-203.01 - Doing Business. For Mississippi income tax purposes, the term "doing business" means the operation of any enterprise or activity in Mississippi for financial profit or economic gain. For the purposes of this regulation, the terms "doing business" and "nexus" have the same meaning. Doing Business includes, but is not limited to, the following

Current through June 25, 2024
1. The regular
					 maintenance of an office or other place of business in Mississippi.
2. The regular maintenance in Mississippi of
					 an inventory of merchandise or material for sale, distribution or manufacture,
					 regardless of whether kept on the premises of the taxpayer, in a public or
					 rented warehouse, or otherwise.
3.
					 The selling or distributing of merchandise to customers in Mississippi directly
					 from a company-owned or operated vehicle when title to the merchandise is
					 transferred from the seller or distributor to the customer at the time of the
					 sale or distribution.
4. The
					 regular rendering of a service to clients or customers in Mississippi by agents
					 or employees of a foreign corporation.
5. The owning, renting, or operating of
					 business or income-producing property, real or personal, in
					 Mississippi.
6. The performing of
					 contracts, prime or sublet work, for the construction, repair or renovation of
					 real or personal property.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-203 - Nexus › Section 35-3-08-06-203.02

Current through June 25, 2024
A corporation doing business in Mississippi is subject to
						income tax even if its only operations in this state are a part of its
						interstate business. A foreign corporation whose only activity in this state is
						the solicitation of sales by either resident or nonresident salesmen is not
						required to file income tax returns. However, if a corporation maintains an
						office or other place of business in Mississippi, or if it owns
						income-producing property in this state, or is otherwise qualified to do
						business, or is otherwise certified to do business in Mississippi by the
						Mississippi Insurance commission, or in fact is doing business in Mississippi
						with respect to other activities, it is subject to tax and the requirements of
						filing returns.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-203 - Nexus › Section 35-3-08-06-203.03

Current through June 25, 2024
This regulation intends to adopt a narrow interpretation
						of the immunity afforded by Public Law 86-272, which grants a limited immunity
						to a multistate company from taxation by a state if the company's activity is
						limited to the solicitation of orders for the sale of tangible personal
						property in interstate commerce.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-203 - Nexus › Section 35-3-08-06-203.04

Current through June 25, 2024
Only the sale of tangible personal property is afforded
						immunity under Public Law 86-272; therefore, the selling or providing of
						services, and the selling, leasing, renting, licensing or other disposition of
						real estate, personal property intangibles, or any other type of personal
						property are not immune from taxation by reasons of P. L.
						86-272.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-203 - Nexus › Section 35-3-08-06-203.05

Current through June 25, 2024
For the in-state activity to be immune, it must be
						limited solely to solicitation (except for that activity conducted by
						independent contractors in subsection 203.05 paragraph 3 below). If there is
						any other activity unrelated to solicitation, the immunity shall be lost.
						Examples of activities presently treated (unless otherwise stated as an
						exception or addition) as either non-immune or immune are as follows:
1. Non-immune Activities: The following
					 in-state activities will cause otherwise immune sales to lose their immunity:
a. Making repairs or providing
					 maintenance.
b. Collecting
					 delinquent accounts.
c.
					 Investigating credit worthiness.
d.
					 Installation or supervision of installation.
e. Conducting training courses, seminars or
					 lectures.
f. Providing engineering
					 functions.
g. Handling customer
					 complaints.
h. Approving or
					 accepting orders.
i. Repossessing
					 property.
j. Securing deposits on
					 sales.
k. Picking up or replacing
					 damaged or returned property.
l.
					 Hiring, training, or supervising personnel.
m. Providing shipping information and
					 coordinating deliveries.
n.
					 Maintaining sample or display room in excess of two weeks (14 days)
during the tax year.
o. Carrying samples for sale, exchange or
					 distribution in any manner for consideration or other value.
p. Owning, leasing, maintaining or otherwise
					 using any of the following facilities or property in-state:
i. Repair shop.
ii. Parts department.
iii. Purchasing office.
iv. Employment office.
v. Warehouse.
vi. Meeting place for directors, officers or
					 employees.
vii. Stock of
					 goods.
viii. Telephone answering
					 service.
ix. Mobile stores, i.e.,
					 trucks with driver salesmen.
x.
					 Real property or fixtures of any kind.
q. Consigning tangible personal property to
					 any person, including an independent contractor.
r. Maintaining, by either an in-state or an
					 out-of-state resident employee, of an office or place of business (in-home or
					 otherwise).
s. Conducting any
					 activity in addition to those described in paragraph II below which is not an
					 integral part of the solicitation of orders.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-301 › Section 35-3-08-06-301.02

Current through June 25, 2024
The classification of income into categories customarily
						used, such as manufacturing income, compensation for services, sales income,
						interest, dividends, rents, royalties, gains, operating income, non-operating
						income, etc., does not determine whether income is business or non-business
						income.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-301 › Section 35-3-08-06-301.03

Current through June 25, 2024
Some of any type or class and from any source is business
						income if it arises from transactions and activities occurring in the regular
						course of a trade or business.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-301 › Section 35-3-08-06-301.04

Current through June 25, 2024
Transactions between affiliated taxpayers, groups, or
						parties shall be calculated on an arms-length basis. Transactions determined
						not to be at fair market value may be recomputed on review of such transactions
						or the Commissioner may prescribe an alternate method of reporting by the
						taxpayer.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-302 - Allocation or Apportionment › Section 35-3-08-06-302.01 - The following are general rules for determining whether specific income is business or non-business income

Current through June 25, 2024
1. RENTS FROM REAL
					 AND TANGIBLE PERSONAL PROPERTY. Rental income from real and tangible property
					 is business income if the income producing property is used by the taxpayer's
					 trade or business. If rental income is from an asset which is purely an
					 investment, then it is non-business.
2. GAINS OR LOSSES FROM SALES OF ASSETS. Gain
					 or loss from the sale, exchange or other disposition of real, tangible, or
					 intangible personal property constitutes business income if the property while
					 owned by taxpayer was used in the taxpayer's trade or business, or was used to
					 produce business income, regardless of whether the asset has actually produced
					 income. However, if such property was utilized for the production of
					 non-business income, the gain or loss will constitute non-business
					 income.
3. INTEREST. Interest
					 income is business income where the intangible, with respect to which the
					 interest was received, arises out of or was created in the regular course of
					 the taxpayer's trade or business operations or where the purpose for acquiring
					 and holding the intangible is related to or incidental to such trade or
					 business operations. Business income shall not, however, include interest
					 income on loans to subsidiaries or affiliates which are not organized under the
					 laws either of the United States, or any state, district, territory or
					 possession thereof.
4. FOREIGN
					 SOURCE INTEREST.
a. Interest that is derived
					 from a source outside of the United States, or any state, district, territory
					 or possession of the United States is non-business interest.
b. In general, all other interest is business
					 income. A partial listing for illustrative purposes of interest that is
					 considered to be business income is interest on accounts receivable,
					 certificates of deposit, money market accounts, tax refunds, and municipal
					 obligations. Municipal obligations of the state of Mississippi are
					 exempt.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.01

Current through June 25, 2024
Non-business net rents and royalties from tangible
						personal property are allocable to this state: (i) if and to the extent that
						the property is utilized in this state, or (ii) in their entirety if the
						taxpayer's commercial domicile is in this state and the taxpayer is not
						organized under the laws of or taxable in the state in which the property is
						utilized.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.02

Current through June 25, 2024
The extent of utilization of tangible personal property
						in a state is determined by multiplying the rents and royalties by a fraction,
						the numerator of which is the number of days of physical location of the
						property in this state during the rental or royalty period in the taxable year
						and the denominator of which is the number of days of physical location of the
						property everywhere during all rental or royalty periods in the taxable
						year.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.03

Current through June 25, 2024
CAPITAL GAINS AND LOSSES. Non-business capital gains and
						losses from sales of real property are allocable to the state where the
						property is located.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.04

Current through June 25, 2024
PROPERTY. Capital gains and losses from sales of tangible
						personal property are allocable to this state if the property had a situs in
						this state at the time of sale, or the taxpayer's commercial domicile is in
						this state and the taxpayer is not taxable in the state in which the property
						had a situs.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.05

Current through June 25, 2024
INTANGIBLE PROPERTY. Non-business capital gains and
						losses from sales of intangible personal property are allocable to this state,
						if the taxpayer's commercial domicile is in this state and the intangible has
						not acquired a commercial, business or actual situs in another state, or the
						taxpayer's commercial domicile is not in this state, but the intangible has
						acquired a commercial, business or actual situs in this
						state.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.06

Current through June 25, 2024
INTEREST AND DIVIDENDS. Non-business interest and
						dividends are allocable of the state of commercial domicile.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-303 - Allocation of Non-Business Income › Section 35-3-08-06-303.07 - PATENTS AND COPYRIGHTS

Current through June 25, 2024
1. Patent and
					 copyright royalties are allocable to this state if and to the extent that the
					 patent or copyright is utilized by the payer in this state, or if to the extent
					 that the patent or copyright is utilized by the taxpayer in a state in which
					 the taxpayer is not taxable and taxpayer's commercial domicile is in this
					 state.
2. A patent is utilized in a
					 state to the extent that it is employed in production, fabrication,
					 manufacturing, or other processing in the state or to the extent that a
					 patented product is produced in the state.
3. A copyright is utilized in a state to the
					 extent that printing or other publication originates in the state.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-304 - Consistency and Uniformity in Reporting

Current through June 25, 2024
In filing returns with this state, if the taxpayer departs
					 from or modifies the manner in which income has been classified as business
					 income or non-business income in returns for prior years, the taxpayer shall
					 disclose in the return for the current year the nature and extent of the
					 modification.
Mississippi Administrative Code › Title 35 - Department of Revenue › Part 3 - Income and Franchise › Subpart 08 - Corporations › Chapter 06 - Multistate Taxation › Section 35-3-08-06-401 - Basis of Filing › Section 35-3-08-06-401.01

Current through June 25, 2024
TOTAL ASSIGNMENT OF INCOME. If the business activity of a
						taxpayer occurs within this state, and if by reason of such business activity
						the taxpayer is not taxable in another state, the total net income (or loss) of
						the taxpayer shall be assigned to Mississippi.